1.1 	A bill for an act
1.2 	relating to retirement; making administrative changes to the Minnesota State 
1.3 	Retirement System, Teachers Retirement Association, Public Employees 
1.4 	Retirement Association, and St. Paul Teachers Retirement Fund Association; 
1.5 	clarifying refund repayment procedures; modifying the criteria for appointing 
1.6 	an executive director; clarifying combined service annuity augmentation rates; 
1.7 	revising appeal procedures; clarifying coverage for charter school administrators; 
1.8 	modifying the criteria for appointing an executive director; increasing the length 
1.9 	of allowable service credit purchase periods; establishing new procedures 
1.10 	for disability applications due to private disability insurance requirements; 
1.11 	clarifying death and disability benefit payment provisions; modifying the annual 
1.12 	benefit limitations provision for federal tax code compliance; authorizing the 
1.13 	executive director to correct operational and other errors under IRS correction 
1.14 	procedures; clarifying certain service and salary credit purchases; clarifying 
1.15 	the offset for benefits received for certain refund payments; clarifying police 
1.16 	and fire plan coverage for certain Hennepin Healthcare System supervisors; 
1.17 	requiring termination from all public service for combined service annuity 
1.18 	eligibility; modifying various economic actuarial assumptions; amending 
1.19 	Minnesota Statutes 2014, sections 3A.03, subdivision 3; 16A.14, subdivision 2a; 
1.20 	352.03, subdivisions 5, 6; 353.32, subdivision 1; 353.34, subdivision 2; 354.05, 
1.21 	subdivision 2, by adding a subdivision; 354.06, subdivisions 2, 2a; 354.095; 
1.22 	354.45, by adding a subdivision; 354.46, subdivision 6; 354.48, subdivision 
1.23 	1; 354.52, subdivisions 4, 6; 354A.093, subdivision 4; 354A.38, as amended; 
1.24 	356.30, subdivision 1; 356.635, by adding subdivisions; 356.96, subdivisions 
1.25 	1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 423A.02, subdivision 3; Minnesota 
1.26 	Statutes 2015 Supplement, sections 3A.03, subdivision 2; 352.23; 352B.11, 
1.27 	subdivision 4; 352D.05, subdivision 4; 353.0162; 353.64, subdivision 10; 
1.28 	354.44, subdivision 9; 354A.093, subdivision 6; 354A.096; 356.215, subdivision 
1.29 	8; 356.50, subdivision 2; 356.551, subdivision 2; 356.635, subdivision 10; 
1.30 	490.124, subdivision 12; repealing Minnesota Statutes 2014, sections 353.0161, 
1.31 	subdivision 1; 356.611, subdivisions 3, 3a, 4, 5; 356.96, subdivisions 14, 15; 
1.32 	Minnesota Statutes 2015 Supplement, section 353.0161, subdivisions 2, 3.
1.33 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.1 	ARTICLE 1
2.2 	MINNESOTA STATE RETIREMENT SYSTEM

2.3 	Section 1. Minnesota Statutes 2015 Supplement, section 3A.03, subdivision 2, is 
2.4 	amended to read:
2.5 		Subd. 2.Refund.  (a) A former member who has made contributions under 
2.6 	subdivision 1 and who is no longer a member of the legislature is entitled to receive, upon 
2.7 	written application to the executive director on a form prescribed by the executive director, 
2.8 	a refund from the general fund of all contributions credited to the member's account with 
2.9 	interest computed as provided in section 352.22, subdivision 2.
2.10 	(b) The refund of contributions as provided in paragraph (a) terminates all rights of a 
2.11 	former member of the legislature and the survivors of the former member under this chapter.
2.12 	(c) If the former member of the legislature again becomes a member of the legislature 
2.13 	after having taken a refund as provided in paragraph (a), the member is a member of the 
2.14 	unclassified employees retirement program of the Minnesota State Retirement System.
2.15 	(d) However, the member may reinstate the rights and credit for service previously 
2.16 	forfeited under this chapter if the member repays all refunds taken, plus interest at the 
2.17 	rate of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually 
2.18 	from the date on which the refund was taken to the date on which the refund is repaid. 
2.19 	Repayment must be made as provided in section 352.23, paragraph (d).
2.20 	(e) No person may be required to apply for or to accept a refund.

2.21 	EFFECTIVE DATE. This section is effective July 1, 2016.

2.22 	Sec. 2. Minnesota Statutes 2014, section 3A.03, subdivision 3, is amended to read:
2.23 		Subd. 3.Legislators retirement fund. (a) The legislators retirement fund, a special 
2.24 	retirement fund, is created within the state treasury. The legislators retirement fund must 
2.25 	be credited with any investment proceeds on the assets of the retirement fund.
2.26 	(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated 
2.27 	from the legislators retirement fund.
2.28 	(c) The legislators retirement fund may receive transfers of general fund proceeds.

2.29 	EFFECTIVE DATE. This section is effective July 1, 2016.

2.30 	Sec. 3. Minnesota Statutes 2014, section 16A.14, subdivision 2a, is amended to read:
2.31 		Subd. 2a.Exceptions. The allotment and encumbrance system does not apply to:
2.32 	(1) appropriations for the courts or the legislature;
3.1 	(2) payment of unemployment benefits.; and
3.2 	(3) transactions within the defined contribution funds administered by the Minnesota 
3.3 	State Retirement System.

3.4 	EFFECTIVE DATE. This section is effective July 1, 2016.

3.5 	Sec. 4. Minnesota Statutes 2014, section 352.03, subdivision 5, is amended to read:
3.6 		Subd. 5.Executive director;, deputy director, and assistant director. (a) The 
3.7 	board shall appoint an executive director, in this chapter called the director, of the 
3.8 	system must be appointed by the board on the basis of fitness education, experience in 
3.9 	the retirement field, and leadership ability to manage and lead system staff, and ability 
3.10 	to assist the board in setting a vision for the system. The director must have had at 
3.11 	least five years' experience on the administrative staff of a major retirement system in 
3.12 	either an executive level management position or in a position with responsibility for the 
3.13 	governance, management, or administration of a retirement plan.
3.14 	(b) The executive director, deputy director,  and assistant director must be in the 
3.15 	unclassified service but appointees may be selected from civil service lists if desired. The 
3.16 	salary of the executive director must be as provided by section 15A.0815. The salary of 
3.17 	the deputy director and assistant director must be set in accordance with section 43A.18, 
3.18 	subdivision 3.

3.19 	EFFECTIVE DATE. This section is effective July 1, 2016.

3.20 	Sec. 5. Minnesota Statutes 2014, section 352.03, subdivision 6, is amended to read:
3.21 		Subd. 6.Duties and powers of executive director. The management of the system 
3.22 	is vested in the director, who is the executive and administrative head of the system. The 
3.23 	director may appoint a deputy director and an assistant director with the approval of the 
3.24 	board. The director shall be advisor to the board on matters pertaining to the system and 
3.25 	shall also act as the secretary of the board. The director shall:
3.26 	(1) attend meetings of the board;
3.27 	(2) prepare and recommend to the board appropriate rules to carry out this chapter;
3.28 	(3) establish and maintain an adequate system of records and accounts following 
3.29 	recognized accounting principles and controls;
3.30 	(4) designate an assistant director with the approval of the board;
3.31 	(5)(4) appoint any employees, both permanent and temporary, that are necessary to 
3.32 	carry out the provisions of this chapter;
4.1 	(6)(5) organize the work of the system as the director deems necessary to fulfill the 
4.2 	functions of the system, and define the duties of its employees and delegate to them any 
4.3 	powers or duties, subject to the control of the director and under conditions the director 
4.4 	may prescribe. Appointments to exercise delegated power must be by written order and 
4.5 	shall be filed with the secretary of state;
4.6 	(7)(6) with the advice and consent of the board, contract for the services of an 
4.7 	approved actuary, professional management services, and any other consulting services as 
4.8 	necessary and fix the compensation for those services. The contracts are not subject to 
4.9 	competitive bidding under chapter 16C. Any approved actuary retained by the executive 
4.10 	director shall function as the actuarial advisor of the board and the executive director, and 
4.11 	may perform actuarial valuations and experience studies to supplement those performed 
4.12 	by the actuary retained under section 356.214. Any supplemental actuarial valuations or 
4.13 	experience studies shall be filed with the executive director of the Legislative Commission 
4.14 	on Pensions and Retirement. Professional management services may not be contracted for 
4.15 	more often than once in six years. Copies of professional management survey reports must 
4.16 	be transmitted to the secretary of the senate, the chief clerk of the house of representatives, 
4.17 	and the Legislative Reference Library as provided by section 3.195, and to the executive 
4.18 	director of the commission at the time as reports are furnished to the board. Only 
4.19 	management firms experienced in conducting management surveys of federal, state, or 
4.20 	local public retirement systems are qualified to contract with the director;
4.21 	(8)(7) with the advice and consent of the board provide in-service training for the 
4.22 	employees of the system;
4.23 	(9)(8) make refunds of accumulated contributions to former state employees and 
4.24 	to the designated beneficiary, surviving spouse, legal representative, or next of kin of 
4.25 	deceased state employees or deceased former state employees, as provided in this chapter;
4.26 	(10)(9) determine the amount of the annuities and disability benefits of employees 
4.27 	covered by the system and authorize payment of the annuities and benefits beginning as 
4.28 	of the dates on which the annuities and benefits begin to accrue, in accordance with the 
4.29 	provisions of this chapter;
4.30 	(11)(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating 
4.31 	expenses of the system;
4.32 	(12)(11) certify funds available for investment to the State Board of Investment;
4.33 	(13)(12) with the advice and approval of the board request the State Board of 
4.34 	Investment to sell securities when the director determines that funds are needed for the 
4.35 	system;
5.1 	(14)(13) prepare and submit to the board and the legislature an annual financial 
5.2 	report covering the operation of the system, as required by section 356.20;
5.3 	(15)(14) prepare and submit biennial and annual budgets to the board and with 
5.4 	the approval of the board submit the budgets to the Department of Management and 
5.5 	Budget; and
5.6 	(16)(15) with the approval of the board, perform other duties required to administer 
5.7 	the retirement and other provisions of this chapter and to do its business.

5.8 	EFFECTIVE DATE. This section is effective July 1, 2016.

5.9 	Sec. 6. Minnesota Statutes 2015 Supplement, section 352.23, is amended to read:
5.10 	352.23 TERMINATION OF RIGHTS; REPAYMENT OF REFUND.
5.11 	(a) When any employee accepts a refund as provided in section 352.22, all existing 
5.12 	allowable service credits and all rights and benefits to which the employee was entitled 
5.13 	before accepting the refund terminate.
5.14 	(b) Terminated service credits and rights must not again be restored until the former 
5.15 	employee acquires at least six months of allowable service credit after taking the last 
5.16 	refund. In that event, the employee may repayand repays all refunds previously taken 
5.17 	from the retirement fund with interest as provided in paragraph (d).
5.18 	(c) Repayment of refunds entitles the employee only to credit for service covered 
5.19 	by (1) salary deductions; (2) payments previously made in lieu of salary deductions as 
5.20 	permitted under law in effect when the payment in lieu of deductions was made; (3) 
5.21 	payments made to obtain credit for service as permitted by laws in effect when payment was 
5.22 	made; and (4) allowable service previously credited while receiving temporary workers' 
5.23 	compensation as provided in section 352.01, subdivision 11, paragraph (a), clause (3).
5.24 	(d) Payments under this section for repayment of refunds are to be paid with interest 
5.25 	at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter compounded 
5.26 	annually from the date the refund was taken until the date the refund is repaid. They 
5.27 	Repayment may be paid in a lump sum or by payroll deduction in the manner provided in 
5.28 	section 352.04. Payment may be made in partial payments consistent with section 356.44 
5.29 	during employment or  in a lump sum up to six months after termination from service.

5.30 	EFFECTIVE DATE. This section is effective July 1, 2016.

5.31 	Sec. 7. Minnesota Statutes 2015 Supplement, section 352B.11, subdivision 4, is 
5.32 	amended to read:
6.1 		Subd. 4.Reentry into state service. When a former member, who has become 
6.2 	separated from state service that entitled the member to membership and has received 
6.3 	a refund of retirement payments, reenters the state service in a position that entitles 
6.4 	the member to membership, that member shall receive credit for the period of prior 
6.5 	allowable state service if the member repays into the fund the amount of the refund, plus 
6.6 	interest on it at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter 
6.7 	compounded annually, at any time before subsequent retirement. Repayment may be 
6.8 	made in installments or in a lump sum. Repayment must be made as provided in section 
6.9 	352.23, paragraph (d).

6.10 	EFFECTIVE DATE. This section is effective July 1, 2016.

6.11 	Sec. 8. Minnesota Statutes 2015 Supplement, section 352D.05, subdivision 4, is 
6.12 	amended to read:
6.13 		Subd. 4.Repayment of refund. (a) A participant in the unclassified program may 
6.14 	repay regular refunds taken under section 352.22, as provided in section 352.23.
6.15 	(b) A participant in the unclassified program or an employee covered by the general 
6.16 	employees retirement plan who has withdrawn the value of the total shares may repay 
6.17 	the refund taken and thereupon restore the service credit, rights and benefits forfeited by 
6.18 	paying into the fund the amount refunded plus interest at the rate of 8.5 percent until June 
6.19 	30, 2015, and eight percent thereafter compounded annually from the date that the refund 
6.20 	was taken until the date that the refund is repaid. If the participant had withdrawn only the 
6.21 	employee shares as permitted under prior laws, repayment must be pro rata.
6.22 	(c) Except as provided in section 356.441, the repayment of a refund under this 
6.23 	section must be made in a lump sum. Repayment must be made as provided in section 
6.24 	352.23, paragraph (d).

6.25 	EFFECTIVE DATE. This section is effective July 1, 2016.

6.26 	Sec. 9. Minnesota Statutes 2015 Supplement, section 490.124, subdivision 12, is 
6.27 	amended to read:
6.28 		Subd. 12.Refund.  (a) A person who ceases to be a judge is entitled to a refund 
6.29 	in an amount that is equal to all of the member's employee contributions to the judges' 
6.30 	retirement fund plus interest computed under section 352.22, subdivision 2.
6.31 	(b) A refund of contributions under paragraph (a) terminates all service credits and 
6.32 	all rights and benefits of the judge and the judge's survivors under this chapter.
7.1 	(c) A person who becomes a judge again after taking a refund under paragraph (a) 
7.2 	may reinstate the previously terminated allowable service credit, rights, and benefits by 
7.3 	repaying the total amount of the previously received refund. The refund repayment must 
7.4 	include interest on the total amount previously received at the annual rate of 8.5 percent 
7.5 	until June 30, 2015, and eight percent thereafter, compounded annually, from the date on 
7.6 	which the refund was received until the date on which the refund is repaid. Repayment 
7.7 	must be made as provided in section 352.23, paragraph (d).

7.8 	EFFECTIVE DATE. This section is effective July 1, 2016.

7.9 	ARTICLE 2
7.10 	TEACHERS RETIREMENT ASSOCIATION

7.11 	Section 1. Minnesota Statutes 2014, section 354.05, subdivision 2, is amended to read:
7.12 		Subd. 2.Teacher. (a) "Teacher" means:
7.13 	(1) a person who renders service as a teacher, supervisor, principal, superintendent, 
7.14 	librarian, nurse, counselor, social worker, therapist, or psychologist in:
7.15 	(i) a public school of the state other than in Independent School District No. 625 or 
7.16 	in Independent School District No. 709, or in any;
7.17 	(ii) a charter school, irrespective of the location of the school, or in any; or
7.18 	(iii) a charitable, penal, or correctional institutionsinstitution of a governmental 
7.19 	subdivision, or ; 
7.20 	(2) a person who is engaged in educational administration in connection with the 
7.21 	state public school system, whether the position be a public office or anas employment;
7.22 	(3) a person who renders service as a charter school director or chief administrative 
7.23 	officer, provided, however, that if the charter school director or chief administrative officer 
7.24 	is covered by the Public Employees Retirement Association general employees retirement 
7.25 	plan on July 1, 2016, the charter school director or chief administrative officer shall 
7.26 	continue to be covered by that plan and not by the Teachers Retirement Association;
7.27 	(2) (4) an employee of the Teachers Retirement Association;
7.28 	(3) (5) a person who renders teaching service on a part-time basis and who also 
7.29 	renders other services for a single employing unit where the teaching service comprises at 
7.30 	least 50 percent of the combined employment salary is a member of the association for 
7.31 	all services with the single employing unit or, if less than 50 percent of the combined 
7.32 	employment salary, the executive director determines all of the combined service is 
7.33 	covered by the association; or
8.1 	(4) (6) a person who is not covered by the plans established under chapter 352D, 
8.2 	354A, or 354B and who is employed by the Board of Trustees of the Minnesota State 
8.3 	Colleges and Universities system in an unclassified position as:
8.4 	(i) a president, vice-president, or dean;
8.5 	(ii) a manager or a professional in an academic or an academic support program 
8.6 	other than specified in item (i);
8.7 	(iii) an administrative or a service support faculty position; or
8.8 	(iv) a teacher or a research assistant.
8.9 	(b) "Teacher" does not mean:
8.10 	(1) a person who works for a school or institution as an independent contractor as 
8.11 	defined by the Internal Revenue Service;
8.12 	(2) a person who renders part-time teaching service or who is a customized trainer 
8.13 	as defined by the Minnesota State Colleges and Universities system if (i) the service is 
8.14 	incidental to the regular nonteaching occupation of the person; and (ii) the employer 
8.15 	stipulates annually in advance that the part-time teaching service or customized training 
8.16 	service will not exceed 300 hours in a fiscal year and retains the stipulation in its records; 
8.17 	and (iii) the part-time teaching service or customized training service actually does not 
8.18 	exceed 300 hours in a fiscal year;
8.19 	(3) a person exempt from licensure under section 122A.30;
8.20 	(4)(2) annuitants of the teachers retirement plan who are employed after retirement 
8.21 	by an employing unit that participates in the teachers retirement plan during the course of 
8.22 	that reemployment;
8.23 	(5)(3) a person who is employed by the University of Minnesota;
8.24 	(6)(4) a member or an officer of any general governing or managing board or body 
8.25 	of an employing unit that participates in the teachers retirement plan; or
8.26 	(7)(5) a person employed by Independent School District No. 625 or Independent 
8.27 	School District No. 709 as a teacher as defined in section 354A.011, subdivision 27.

8.28 	EFFECTIVE DATE. This section is effective July 1, 2016.

8.29 	Sec. 2. Minnesota Statutes 2014, section 354.05, is amended by adding a subdivision 
8.30 	to read:
8.31 		Subd. 17a.Former spouse. "Former spouse" means a person who is no longer a 
8.32 	spouse of a member due to dissolution of the marriage, legal separation, or annulment.

8.33 	EFFECTIVE DATE. This section is effective July 1, 2016.

9.1 	Sec. 3. Minnesota Statutes 2014, section 354.06, subdivision 2, is amended to read:
9.2 		Subd. 2.President; executive director. The board shall annually elect one of 
9.3 	its members as president. It shall elect an executive director, whose salary shall be as 
9.4 	provided by section 15A.0815. The salary of the assistant executive director who shall be 
9.5 	in the unclassified service, shall be set in accordance with section 43A.18, subdivision 3. 
9.6 	The executive director shall serve during the pleasure of the board and be the executive 
9.7 	officer of the board, with such duties as the board shall prescribe. The board shall employ 
9.8 	all other clerks and employees necessary to properly administer the association. The 
9.9 	cost and expense of administering the provisions of this chapter shall be paid by the 
9.10 	association. The board shall appoint an executive director shall be appointed by the 
9.11 	board on the basis of fitness education, experience in the retirement field and leadership, 
9.12 	ability to manage and lead system staff, and ability to assist the board in setting a vision 
9.13 	for the system. The executive director shall have had at least five years of experience 
9.14 	on the administrative staff of a major retirement system in either an executive-level 
9.15 	management position or in a position with responsibility for the governance, management, 
9.16 	or administration of a retirement plan.

9.17 	EFFECTIVE DATE. This section is effective July 1, 2016.

9.18 	Sec. 4. Minnesota Statutes 2014, section 354.06, subdivision 2a, is amended to read:
9.19 		Subd. 2a.Duties of executive director. The management of the association is 
9.20 	vested in the executive director who shall be the executive and administrative head of 
9.21 	the association. The executive director shall act as advisor to the board on all matters 
9.22 	pertaining to the association and shall also act as the secretary of the board. The executive 
9.23 	director shall:
9.24 	(1) attend all meetings of the board;
9.25 	(2) prepare and recommend to the board appropriate rules to carry out the provisions 
9.26 	of this chapter;
9.27 	(3) establish and maintain an adequate system of records and accounts following 
9.28 	recognized accounting principles and controls;
9.29 	(4) designate, as necessary, a deputy executive director and an assistant executive 
9.30 	director in the unclassified service, as defined in section 43A.08, whose salaries shall 
9.31 	be set in accordance with section 43A.18, subdivision 3, and two assistant executive 
9.32 	directors in the classified service, as defined in section 43A.07, with the approval of the 
9.33 	board, and appoint such employees, both permanent and temporary, as are necessary to 
9.34 	carry out the provisions of this chapter;
10.1 	(5) organize the work of the association as the director deems necessary to fulfill the 
10.2 	functions of the association, and define the duties of its employees and delegate to them 
10.3 	any powers or duties, subject to the director's control and under such conditions as the 
10.4 	director may prescribe;
10.5 	(6) with the approval of the board, contract and set the compensation for the services 
10.6 	of an approved actuary, professional management services, and any other consulting 
10.7 	services. These contracts are not subject to the competitive bidding procedure prescribed 
10.8 	by chapter 16C. An approved actuary retained by the executive director shall function as 
10.9 	the actuarial advisor of the board and the executive director and may perform actuarial 
10.10 	valuations and experience studies to supplement those performed by the actuary retained 
10.11 	under section 356.214. Any supplemental actuarial valuations or experience studies shall 
10.12 	be filed with the executive director of the Legislative Commission on Pensions and 
10.13 	Retirement. Copies of professional management survey reports must be transmitted to the 
10.14 	secretary of the senate, the chief clerk of the house of representatives, and the Legislative 
10.15 	Reference Library as provided by section 3.195, and to the executive director of the 
10.16 	commission at the same time as reports are furnished to the board. Only management 
10.17 	firms experienced in conducting management surveys of federal, state, or local public 
10.18 	retirement systems are qualified to contract with the executive director;
10.19 	(7) with the approval of the board, provide in-service training for the employees 
10.20 	of the association;
10.21 	(8) make refunds of accumulated contributions to former members and to the 
10.22 	designated beneficiary, surviving spouse, legal representative, or next of kin of deceased 
10.23 	members or deceased former members, under this chapter;
10.24 	(9) determine the amount of the annuities and disability benefits of members covered 
10.25 	by the association and authorize payment of the annuities and benefits beginning as of the 
10.26 	dates on which the annuities and benefits begin to accrue, under this chapter;
10.27 	(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating 
10.28 	expenses of the association;
10.29 	(11) prepare and submit to the board and the legislature an annual financial report 
10.30 	covering the operation of the association, as required by section 356.20;
10.31 	(12) certify funds available for investment to the State Board of Investment;
10.32 	(13) with the advice and approval of the board, request the State Board of Investment 
10.33 	to sell securities on determining that funds are needed for the purposes of the association;
10.34 	(14) prepare and submit biennial and annual budgets to the board and with the 
10.35 	approval of the board submit those budgets to the Department of Management and 
10.36 	Budget; and
11.1 	(15) with the approval of the board, perform such other duties as may be required for 
11.2 	the administration of the association and the other provisions of this chapter and for the 
11.3 	transaction of its business. The executive director may:
11.4 	(i) reduce all or part of the accrued interest and fines payable by an employing 
11.5 	unit for reporting requirements under section 354.52, based on an evaluation of any 
11.6 	extenuating circumstances of the employing unit;
11.7 	(ii) assign association employees to conduct field audits of an employing unit to 
11.8 	ensure compliance with the provisions of this chapter; and
11.9 	(iii) recover overpayments, if not repaid to the association, by suspending or reducing 
11.10 	the payment of a retirement annuity, refund, disability benefit, survivor benefit, or optional 
11.11 	annuity under this chapter until the overpayment, plus interest, has been recovered.

11.12 	EFFECTIVE DATE. This section is effective July 1, 2016.

11.13 	Sec. 5. Minnesota Statutes 2014, section 354.095, is amended to read:
11.14 	354.095 MEDICAL LEAVE.
11.15 	(a) Upon granting a medical leave, an employing unit must certify the leave to the 
11.16 	association on a form specified by the executive director. A member of the association 
11.17 	who is on an authorized medical leave of absence is entitled to receive allowable service 
11.18 	credit, not to exceed one year five years, for the period of leave, upon making the 
11.19 	prescribed payment to the fund under section 354.72. A member may not receive more 
11.20 	than one year of allowable service credit during any fiscal year by making payment under 
11.21 	this section. A member may not receive disability benefits under section 354.48 and 
11.22 	receive allowable service credit under this section for the same period of time. 
11.23 	(b) The executive director shall reject an application for disability benefits under 
11.24 	section 354.48 if the member is applying only because an employer-sponsored provider of 
11.25 	private disability insurance benefits requires such an application and the member would 
11.26 	not have applied for disability benefits in the absence of such requirement. The member 
11.27 	shall submit a copy of the disability insurance policy that requires an application for 
11.28 	disability benefits from the plan if the member wishes to assert that the application is only 
11.29 	being submitted because of the disability insurance policy requirement. 
11.30 	(c) Notwithstanding the provisions of any agreement to the contrary, employee 
11.31 	and employer contributions may not be made to receive allowable service credit under 
11.32 	this section if the member does not retain the right to full reinstatement both during and 
11.33 	at the end of the medical leave.

11.34 	EFFECTIVE DATE. This section is effective July 1, 2016.

12.1 	Sec. 6. Minnesota Statutes 2015 Supplement, section 354.44, subdivision 9, is 
12.2 	amended to read:
12.3 		Subd. 9.Determining applicable law. A former teacher who returns to covered 
12.4 	service following a termination and who is not receiving a retirement annuity under this 
12.5 	section must have earned at least 85 daysone-half year of credited service following the 
12.6 	return to covered service to be eligible for improved benefits resulting from any law 
12.7 	change enacted subsequent to that termination.

12.8 	EFFECTIVE DATE. This section is effective July 1, 2016.

12.9 	Sec. 7. Minnesota Statutes 2014, section 354.45, is amended by adding a subdivision 
12.10 	to read:
12.11 		Subd. 3.Payment upon death of former spouse. Upon the death of the former 
12.12 	spouse to whom payments are to be made before the end of the specified payment period, 
12.13 	payments shall be made according to the terms of a beneficiary form completed by the 
12.14 	former spouse or, if no beneficiary form, to the estate of the former spouse.

12.15 	EFFECTIVE DATE. This section is effective July 1, 2016.

12.16 	Sec. 8. Minnesota Statutes 2014, section 354.46, subdivision 6, is amended to read:
12.17 		Subd. 6.Application. (a) A beneficiary designation and an application for benefits 
12.18 	under this section must be in writing on a form prescribed by the executive director.
12.19 	(b) Sections 354.55, subdivision 11, and 354.60 apply to a deferred annuity payable 
12.20 	under this section.
12.21 	(c) Unless otherwise specified, the annuity must be computed under section 354.44, 
12.22 	subdivision 2 or 6, whichever is applicable.
12.23 	(d) Each designated beneficiary eligible for a lifetime benefit under this subdivision 
12.24 	may apply for an annuity any time after the member's death. The benefit may not begin to 
12.25 	accrue more than six months before the date the application is filed with the executive 
12.26 	director and may not accrue before the member's death.

12.27 	EFFECTIVE DATE. This section is effective July 1, 2016.

12.28 	Sec. 9. Minnesota Statutes 2014, section 354.48, subdivision 1, is amended to read:
12.29 		Subdivision 1.Age, service and salary requirements. A member who is totally and 
12.30 	permanently disabled, who has not reached the normal retirement age as defined in section 
12.31 	354.05, subdivision 38,  and who has at least three years of credited allowable service at the 
12.32 	time that the total and permanent disability begins is entitled to a disability benefit based 
13.1 	on this allowable service in an amount provided in subdivision 3. If the disabled member's 
13.2 	teaching service has terminated at any time, at least two of the required three years of 
13.3 	allowable service must have been rendered after last becoming a member. Any member 
13.4 	whose average salary is less than $75 per month is not entitled to disability benefits.

13.5 	EFFECTIVE DATE. This section is effective July 1, 2016.

13.6 	Sec. 10. Minnesota Statutes 2014, section 354.52, subdivision 4, is amended to read:
13.7 		Subd. 4.Reporting and remittance requirements. An employer shall remit all 
13.8 	amounts due to the association and furnish a statement indicating the amount due and 
13.9 	transmitted with any other information required by the executive director. If an amount 
13.10 	due is not received by the association within 14 calendar days of the payroll warrant, 
13.11 	the amount accrues interest at an annual rate of 8.5 percent compounded annually from 
13.12 	the due date until the amount is received by the association. All amounts due and other 
13.13 	employer obligations not remitted within 60 days of notification by the association must 
13.14 	may be certified to the commissioner of management and budget who shall deduct the 
13.15 	amount from any state aid or appropriation amount applicable to the employing unit.

13.16 	EFFECTIVE DATE. This section is effective July 1, 2016.

13.17 	Sec. 11. Minnesota Statutes 2014, section 423A.02, subdivision 3, is amended to read:
13.18 		Subd. 3.Reallocation of amortization state aid. (a) Seventy percent of the 
13.19 	difference between $5,720,000 and the current year amortization aid distributed under 
13.20 	subdivision 1 that is not distributed for any reason to a municipality must be distributed 
13.21 	by the commissioner of revenue according to this paragraph. The commissioner shall 
13.22 	distribute 60 percent of the amounts derived under this paragraph to the Teachers 
13.23 	Retirement Association, and 40 percent to the St. Paul Teachers Retirement Fund 
13.24 	Association to fund the unfunded actuarial accrued liabilities of the respective funds. 
13.25 	These payments must be made on July 15 each fiscal year. If the St. Paul Teachers 
13.26 	Retirement Fund Association or the Duluth Teachers Retirement Fund Association 
13.27 	becomes fully funded, the association's eligibility for its portion of this aid ceases. 
13.28 	Amounts remaining in the undistributed balance account at the end of the biennium if aid 
13.29 	eligibility ceases cancel to the general fund.
13.30 	(b) In order to receive amortization aid under paragraph (a), before June 30 annually 
13.31 	Independent School District No. 625, St. Paul, must make an additional contribution of 
13.32 	$800,000 each year to the St. Paul Teachers Retirement Fund Association.
14.1 	(c) Thirty percent of the difference between $5,720,000 and the current year 
14.2 	amortization aid under subdivision 1 that is not distributed for any reason to a municipality 
14.3 	must be distributed under section 69.021, subdivision 7, paragraph (d), as additional 
14.4 	funding to support a minimum fire state aid amount for volunteer firefighter relief 
14.5 	associations.

14.6 	EFFECTIVE DATE. This section is effective July 1, 2016.

14.7 	ARTICLE 3
14.8 	PUBLIC EMPLOYEES RETIREMENT ASSOCIATION

14.9 	Section 1. Minnesota Statutes 2015 Supplement, section 353.0162, is amended to read:
14.10 	353.0162 REDUCED SALARY PERIODS SALARY CREDIT PURCHASE 
14.11 	FOR PERIODS OF REDUCED SALARY.
14.12 	(a) A member may purchase additionaldifferential salary credit, as described in 
14.13 	paragraph (c), for a period specified in this section paragraph (b).
14.14 	(b) The applicable period is a period during which the member is receiving ano or 
14.15 	reduced salary from the employer while the member is:
14.16 	(1) receiving temporary workers' compensation payments related to the member's 
14.17 	service to the public employer;
14.18 	(2) on an authorized leave of absence, except that if the authorized leave of absence 
14.19 	exceeds 12 months, the period of leave for which differential salary credit may be 
14.20 	purchased is limited to 12 months; or
14.21 	(3) on an authorized partial paid leave of absence as a result of a budgetary or salary 
14.22 	savings program offered or mandated by a governmental subdivision, if certified to the 
14.23 	executive director by the governmental subdivision.
14.24 	(c) The Differential salary amountcredit is the difference between the average 
14.25 	monthly salary received by the member during thea period of reduced salary under 
14.26 	this sectionspecified in paragraph (b) and the average monthly salary of the member, 
14.27 	excluding overtime, on which contributions to the applicable plan werewould have 
14.28 	been made during the period of the last six months of covered employment occurring 
14.29 	immediately before the period of reduced salary, applied tobased on the member's normal 
14.30 	employment period, measured in hours or otherwise, as applicable, and rate of pay.
14.31 	(d) To receive eligibledifferential salary credit, the member shall pay the plan, by 
14.32 	delivering payment to the executive director, an amount equal to:
15.1 	(1) the applicable employee contribution rate under section 353.27, subdivision 
15.2 	2; 353.65, subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the 
15.3 	differential salary amount;
15.4 	(2) plus an employer equivalent payment equal to the applicable employer 
15.5 	contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, 
15.6 	subdivision 2, as applicable, multiplied by the differential salary amount;
15.7 	(3) plus, if applicable, an equivalent employer additional amount equal to the 
15.8 	additional employer contribution rate in section 353.27, subdivision 3a, multiplied by the 
15.9 	differential salary amount.
15.10 	(e) The employer, by appropriate action of its governing body and documented in its 
15.11 	official records, may pay the employer equivalent contributions and, as applicable, the 
15.12 	equivalent employer additional contributions on behalf of the member.
15.13 	(f) Payment under this section must include interest on the contribution amount or 
15.14 	amounts, whichever applies, at an 8.5 percent annual rate until June 30, 2015, and at an 
15.15 	eight percent annual rate thereafter, prorated for applicable months from the date on which 
15.16 	the period of reduced salary specified under this sectionin paragraph (b) terminates to the 
15.17 	date on which the payment or payments are received by the executive director. Payment 
15.18 	under this section must be completed withinby the earlierearliest of:
15.19 	(1) 30 days fromafter termination of public service by the employee under section 
15.20 	353.01, subdivision 11a, or ;
15.21 	(2) one year after the termination of the period specified in paragraph (b), as further 
15.22 	restricted under this section; or
15.23 	(3) 30 days after the commencement of a disability benefit.
15.24 	(g) The period for which additional allowable salary credit may be purchased is 
15.25 	limited to the period during which the person receives temporary workers' compensation 
15.26 	payments or for those business years in which the governmental subdivision offers or 
15.27 	mandates a budget or salary savings program, as certified to the executive director by a 
15.28 	resolution of the governing body of the governmental subdivision. For an authorized leave 
15.29 	of absence, the period for which allowable salary credit may be purchased may not exceed 
15.30 	12 months of authorized leave.
15.31 	(h) To purchase(g) If the member has purchased 12 months of differential salary 
15.32 	credit for a subsequent period of temporary workers' compensation benefits or subsequent 
15.33 	authorized medical leave of absence, the member must return to public service and render 
15.34 	a minimum of three months of allowable service to purchase differential salary credit for 
15.35 	a subsequent leave of absence.

15.36 	EFFECTIVE DATE. This section is effective July 1, 2016.

16.1 	Sec. 2. Minnesota Statutes 2014, section 353.32, subdivision 1, is amended to read:
16.2 		Subdivision 1.Before retirement. If a member or former member who terminated 
16.3 	public service dies before retirement or before receiving any retirement annuity and no 
16.4 	other payment of any kind is or may become payable to any person, a refund is payable to 
16.5 	the designated beneficiary or, if there be none, to the surviving spouse, or, if none, to the 
16.6 	legal representative of the decedent's estate. The refund must be in an amount equal to 
16.7 	accumulated deductions, less the sum of any disability or survivor benefits that have been 
16.8 	paid by the fund, plus annual compound interest thereon at the rate specified in section 
16.9 	353.34, subdivision 2, and less the sum of any disability or survivor benefits, if any, that 
16.10 	may have been paid by the fund; provided that a survivor who has a right to benefits under 
16.11 	section 353.31 may waive such benefits in writing, except such benefits for a dependent 
16.12 	child under the age of 18 years may only be waived under an order of the district court.

16.13 	EFFECTIVE DATE. This section is effective July 1, 2016.

16.14 	Sec. 3. Minnesota Statutes 2014, section 353.34, subdivision 2, is amended to read:
16.15 		Subd. 2.Refund with interest. (a) Except as provided in subdivision 1, any person 
16.16 	who ceases to be a public employee is entitled to receive a refund in an amount equal 
16.17 	to accumulated deductions with, less the sum of any disability benefits that have been 
16.18 	paid by the fund, plus annual compound interest to the first day of the month in which 
16.19 	the refund is processed.
16.20 	(b) For a person who ceases to be a public employee before July 1, 2011, the refund 
16.21 	interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after 
16.22 	June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the 
16.23 	refund interest is at the rate of four percent.
16.24 	(c) If a person repays a refund and subsequently applies for another refund, the 
16.25 	repayment amount, including interest, is added to the fiscal year balance in which the 
16.26 	repayment was made.
16.27 	(d) If the refund payable to a member is based on employee deductions that are 
16.28 	determined to be invalid under section 353.27, subdivision 7, the interest payable on the 
16.29 	invalid employee deductions is four percent.

16.30 	EFFECTIVE DATE. This section is effective July 1, 2016.

16.31 	Sec. 4. Minnesota Statutes 2015 Supplement, section 353.64, subdivision 10, is 
16.32 	amended to read:
17.1 		Subd. 10.Pension coverage for Hennepin Healthcare System, Inc.; paramedics 
17.2 	and emergency medical technicians. An employee of Hennepin Healthcare System, 
17.3 	Inc. is a member of the public employees police and fire retirement plan under sections 
17.4 	353.63 to 353.68 if the person is:
17.5 	(1) certified as a paramedic or emergency medical technician by the state under 
17.6 	section 144E.28, subdivision 4;
17.7 	(2) employed full time by Hennepin County as:
17.8 	(i) a paramedic or;
17.9 	(ii) an emergency medical technician by Hennepin County; or
17.10 	(iii) a supervisor or manager of paramedics or emergency medical technicians; and
17.11 	(3) not eligible for coverage under the agreement signed between the state and the 
17.12 	secretary of the federal Department of Health and Human Services making the provisions 
17.13 	of the federal Old Age, Survivors, and Disability Insurance Act applicable to paramedics 
17.14 	and emergency medical technicians because the person's position is excluded after that 
17.15 	date from application under United States Code, title 42, sections 418(d)(5)(A) and 
17.16 	418(d)(8)(D), and section 355.07.
17.17 	Hennepin Healthcare System, Inc. shall deduct the employee contribution from 
17.18 	the salary of each full-time paramedic and emergency medical technician it employs as 
17.19 	required by section 353.65, subdivision 2, shall make the employer contribution for each 
17.20 	full-time paramedic and emergency medical technician it employs as required by section 
17.21 	353.65, subdivision 3, and shall meet the employer recording and reporting requirements 
17.22 	in section 353.65, subdivision 4.

17.23 	EFFECTIVE DATE. This section is effective July 1, 2016.

17.24 	Sec. 5.  REPEALER.
 17.25 	(a) Minnesota Statutes 2014, section 353.0161, subdivision 1, is repealed.
17.26 	(b) Minnesota Statutes 2015 Supplement, section 353.0161, subdivisions 2 and 
17.27 	3, are repealed.

17.28 	EFFECTIVE DATE. This section is effective July 1, 2016.

17.29 	ARTICLE 4
17.30 	ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION

17.31 	Section 1. Minnesota Statutes 2014, section 354A.093, subdivision 4, is amended to 
17.32 	read:
18.1 		Subd. 4.Eligible payment period. (a) To receive service credit under this section, 
18.2 	the contributions specified in this section must be transmitted to the applicable first class 
18.3 	citySt. Paul Teachers Retirement Fund Association during the period which begins with 
18.4 	the date the individual returns to teaching service and which has a duration of three times 
18.5 	the length of the uniformed service period, but not to exceed five years.
18.6 	(b) Notwithstanding paragraph (a), if the payment period determined under 
18.7 	paragraph (a) is less than one year, the contributions required under this section to receive 
18.8 	service credit may be made within one year from the discharge date.

18.9 	EFFECTIVE DATE. This section is effective July 1, 2016.

18.10 	Sec. 2. Minnesota Statutes 2015 Supplement, section 354A.093, subdivision 6, is 
18.11 	amended to read:
18.12 		Subd. 6.Interest requirements. The employer shall pay interest on all equivalent 
18.13 	employee and employer contribution amounts payable under this section. Interest must 
18.14 	be computed at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter 
18.15 	compounded annually from the end of each fiscal year of the leave or break in service to the 
18.16 	end of the month in which payment is received at the annual compound rate of 8.5 percent 
18.17 	for any period, or portion thereof, through June 30, 2015, and eight percent thereafter.

18.18 	EFFECTIVE DATE. This section is effective July 1, 2016.

18.19 	Sec. 3. Minnesota Statutes 2015 Supplement, section 354A.096, is amended to read:
18.20 	354A.096 MEDICAL LEAVE.
18.21 	Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund 
18.22 	Association who is on an authorized medical leave of absence and subsequently returns to 
18.23 	teaching service is entitled to receive allowable service credit, not to exceed one year, for 
18.24 	the period of leave, upon making the prescribed payment to the fund. This payment must 
18.25 	include the required employee and employer contributions at the rates specified in section 
18.26 	354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly 
18.27 	salary rate on the date the leave of absence commenced plus annual interest compounded 
18.28 	annually from the end of the fiscal year during which the leave terminates to the end of 
18.29 	the month during which payment is made at the rate of 8.5 percent untilfor any period, 
18.30 	or portion thereof, through June 30, 2015, and eight percent thereafter per year from the 
18.31 	end of the fiscal year during which the leave terminates to the end of the month during 
18.32 	which payment is made. The member must pay the total amount required unless the 
18.33 	employing unit, at its option, pays the employer contributions. The total amount required 
19.1 	must be paid by the end of the fiscal year following the fiscal year in which the leave of 
19.2 	absence terminated or before the member retires, whichever is earlier. Payment must be 
19.3 	accompanied by a copy of the resolution or action of the employing authority granting the 
19.4 	leave and the employing authority, upon granting the leave, must certify the leave to the 
19.5 	association in a manner specified by the executive director. A member may not receive 
19.6 	more than one year of allowable service credit during any fiscal year by making payment 
19.7 	under this section. A member may not receive disability benefits under section 354A.36 
19.8 	and receive allowable service credit under this section for the same period of time.

19.9 	EFFECTIVE DATE. This section is effective July 1, 2016.

19.10 	Sec. 4. Minnesota Statutes 2014, section 354A.38, as amended by Laws 2015, chapter 
19.11 	68, article 2, section 15, is amended to read:
19.12 	354A.38 EFFECT OF REFUND; REPAYMENT OF REFUND.
19.13 		Subdivision 1.Effect of refund; termination of service credit. If a coordinated 
19.14 	member or former coordinated member applies for and acceptsis issued a refund pursuant 
19.15 	to section 354A.37, all allowable service which was credited to the member or former 
19.16 	member shall be terminated.
19.17 		Subd. 2.Repayment of refund. A coordinated member with at least two years of 
19.18 	allowable service credited subsequent to the member's last application for and acceptance 
19.19 	payment of a refund pursuant to section 354A.37 shall be entitled to repay the refund. The 
19.20 	amount of the refund repayment shall be calculated pursuant to subdivision 3. If the 
19.21 	member has previously applied for and acceptedtaken more than one refund, and the 
19.22 	previous refund orall refunds have not beenmust be repaid pro rata, then the member 
19.23 	shall be entitled only to repay all outstanding refunds and shall not be entitled to repay 
19.24 	only the most recent refund.
19.25 		Subd. 3.Computation of refund repayment amount. If the coordinated member 
19.26 	elects to repay a refund under subdivision 2, the repayment to the fund must be in an 
19.27 	amount equal to the refunds the member has acceptedbeen issued plus interest at the rate 
19.28 	of 8.5 percent until June 30, 2015, and eight percent thereafter compounded annually 
19.29 	from the date that the refund was acceptedissued to the date that the refund is repaid at a 
19.30 	rate of 8.5 percent for any period, or portion thereof, through June 30, 2015, and eight 
19.31 	percent thereafter.

19.32 	EFFECTIVE DATE. This section is effective July 1, 2016.

20.1 	ARTICLE 5
20.2 	RETIREMENT SYSTEMS GENERALLY

20.3 	Section 1. Minnesota Statutes 2014, section 354.52, subdivision 6, is amended to read:
20.4 		Subd. 6.Noncompliance consequences. (a) An employing unit that does not 
20.5 	comply with the reporting requirements under subdivision 2a, 4a, 4b, or 4d, clause (1), 
20.6 	must pay a fine of $5 per calendar day until the association receives the required data.
20.7 	(b) If the annual base salary required to be reported under subdivision 4d has not 
20.8 	been settled or determined as of June 16, the fine commences if the annual base salary has 
20.9 	not been reported to the association within 14 days following the settlement date.

20.10 	EFFECTIVE DATE. This section is effective July 1, 2016.

20.11 	Sec. 2. Minnesota Statutes 2014, section 356.30, subdivision 1, is amended to read:
20.12 		Subdivision 1.Eligibility; computation of annuity. (a) Notwithstanding any 
20.13 	provisions of the laws governing the retirement plans enumerated in subdivision 3, a 
20.14 	person who has met the qualifications of paragraph (b) may elect to receive:
20.15 	(1) a retirement annuity from each enumerated retirement plan in which the person 
20.16 	has at least one-half year of allowable service, based on the allowable service in each plan, 
20.17 	and subject to the provisions of paragraph (c).; and
20.18 	(2) augmentation of a deferred annuity calculated at the appropriate rate under the 
20.19 	laws governing the applicable enumerated retirement plan.
20.20 	(b) A person may receive, upon retirement, a retirement annuity from each 
20.21 	enumerated retirement plan in which the person has at least one-half year of allowable 
20.22 	service annuities as described in paragraph (a), clause (1), and augmentation of aany 
20.23 	deferred annuity calculated at the appropriate rate under the laws governing each public 
20.24 	pension plan or fund named in subdivision 3, based on the date of the person's initial 
20.25 	entry into public employment from the date the person terminated all public serviceas 
20.26 	described in paragraph (a), clause (2), if:
20.27 	(1) the person has allowable service in any two or more of the enumerated plans;
20.28 	(2) the person has sufficient allowable service in total that equals or exceeds the 
20.29 	applicable service credit vesting requirement of the retirement plan with the longest 
20.30 	applicable service credit vesting requirement; and
20.31 	(3) the person has not begun to receive an annuity from any enumerated plan or the 
20.32 	person has made application for benefits from each applicable plan before terminating all 
20.33 	public service; and
21.1 	(4) the effective dates of the retirement annuity with each plan under which the 
21.2 	person chooses to receive an annuity are within a one-year period.
21.3 	(c) The retirement annuity from each plan must be based upon the allowable service, 
21.4 	accrual rates, and average salary in the applicable plan except as further specified or 
21.5 	modified in the following clauses:
21.6 	(1) the laws governing annuities must be the law in effect on the date of termination 
21.7 	from the last period of public service under a covered retirement plan with which the person 
21.8 	earned a minimum of one-half year of allowable service credit during that employment;
21.9 	(2) the "average salary" on which the annuity from each covered plan in which 
21.10 	the employee has credit in a formula plan must be based on the employee's highest five 
21.11 	successive years of covered salary during the entire service in covered plans;
21.12 	(3) the accrual rates to be used by each plan must be those percentages prescribed by 
21.13 	each plan's formula as continued for the respective years of allowable service from one 
21.14 	plan to the next, recognizing all previous allowable service with the other covered plans;
21.15 	(4) the allowable service in all the plans must be combined in determining eligibility 
21.16 	for and the application of each plan's provisions in respect to reduction in the annuity 
21.17 	amount for retirement prior to normal retirement age; and
21.18 	(5) the annuity amount payable for any allowable service under a nonformula plan 
21.19 	of a covered plan must not be affected, but such service and covered salary must be used 
21.20 	in the above calculation.
21.21 	(d) This section does not apply to any person whose final termination from the last 
21.22 	public service under a covered plan was before May 1, 1975.
21.23 	(e) For the purpose of computing annuities under this section, the accrual rates 
21.24 	used by any covered plan, except the public employees police and fire plan, the judges 
21.25 	retirement fund, and the State Patrol retirement plan, must not exceed 2.7 percent per year 
21.26 	of service for any year of service or fraction thereof. The formula percentage used by the 
21.27 	judges retirement fund must not exceed 3.2 percent per year of service for any year of 
21.28 	service or fraction thereof. The accrual rate used by the public employees police and fire 
21.29 	plan and the State Patrol retirement plan must not exceed 3.0 percent per year of service 
21.30 	for any year of service or fraction thereof. The accrual rate or rates used by the legislators 
21.31 	retirement plan must not exceed 2.5 percent, but this limit does not apply to the adjustment 
21.32 	provided under section 3A.02, subdivision 1, paragraph (c).
21.33 	(f) Any period of time for which a person has credit in more than one of the covered 
21.34 	plans must be used only once for the purpose of determining total allowable service.
21.35 	(g) If the period of duplicated service credit is more than one-half year, or the person 
21.36 	has credit for more than one-half year, with each of the plans, each plan must apply its 
22.1 	formula to a prorated service credit for the period of duplicated service based on a fraction 
22.2 	of the salary on which deductions were paid to that fund for the period divided by the total 
22.3 	salary on which deductions were paid to all plans for the period.
22.4 	(h) If the period of duplicated service credit is less than one-half year, or when 
22.5 	added to other service credit with that plan is less than one-half year, the service credit 
22.6 	must be ignored and a refund of contributions made to the person in accord with that 
22.7 	plan's refund provisions.

22.8 	EFFECTIVE DATE. This section is effective July 1, 2016.

22.9 	Sec. 3. Minnesota Statutes 2015 Supplement, section 356.50, subdivision 2, is 
22.10 	amended to read:
22.11 		Subd. 2.Service credit procedure.  (a) To obtain the public pension plan 
22.12 	allowable service credit, the eligible person under subdivision 1 shall pay the required 
22.13 	member contribution amount. The required member contribution amount is the member 
22.14 	contribution rate or rates in effect for the pension plan during the period of service covered 
22.15 	by the back pay award, applied to the unpaid gross salary amounts of the back pay award 
22.16 	including unemployment insurance, workers' compensation, or wages from other sources 
22.17 	which reduced the back award. No contributions may be made under this clause for 
22.18 	compensation covered by a public pension plan listed in section 356.30, subdivision 3, 
22.19 	for employment during the removal period. The person shall pay the required member 
22.20 	contribution amount within 60 days of the date of receipt of the back pay award or within 
22.21 	60 days of a billing from the retirement fund, whichever is later.
22.22 	(b) The public employer who wrongfully discharged the public employee must pay 
22.23 	an employer contribution on the back pay award. The employer contribution must be 
22.24 	based on the employer contribution rate or rates in effect for the pension plan during the 
22.25 	period of service covered by the back pay award, applied to the salary amount on which 
22.26 	the member contribution amount was determined under paragraph (a). The employer must 
22.27 	pay the interest on both the required member and employer contribution amount must be 
22.28 	paid by the employeramounts from the date the contribution amount would have been paid 
22.29 	to the date of actual payment at the annual compound rate of 8.5 percent for any period 
22.30 	for the Teachers Retirement Association and 8.5 percent untilfor any period, or portion 
22.31 	thereof, through June 30, 2015, and eight percent thereafter, for any other retirement plan 
22.32 	listed in section 356.30, subdivision 3, per year, expressed monthly, between the date the 
22.33 	contribution amount would have been paid to the date of actual payment. The employer 
22.34 	payment must be made within 30 days of the payment under paragraph (a).

23.1 	EFFECTIVE DATE. This section is effective July 1, 2016.

23.2 	Sec. 4. Minnesota Statutes 2015 Supplement, section 356.551, subdivision 2, is 
23.3 	amended to read:
23.4 		Subd. 2.Determination. (a) Unless the minimum purchase amount set forth in 
23.5 	paragraph (c) applies, the prior service credit purchase amount is an amount equal to the 
23.6 	actuarial present value, on the date of payment, as calculated by the chief administrative 
23.7 	officer of the pension plan and reviewed by the actuary retained under section 356.214, 
23.8 	of the amount of the additional retirement annuity obtained by the acquisition of the 
23.9 	additional service credit in this section.
23.10 	(b) Calculation of this amount must be made using the preretirement interest rate 
23.11 	applicable to the public pension plan specified in section 356.215, subdivision 8, and 
23.12 	the mortality table adopted for the public pension plan. The calculation must assume 
23.13 	continuous future service in the public pension plan until, and retirement at, the age at 
23.14 	which the minimum requirements of the fund for normal retirement or retirement with an 
23.15 	annuity unreduced for retirement at an early age, including section 356.30, are met with 
23.16 	the additional service credit purchased. The calculation must also assume a full-time 
23.17 	equivalent salary, or actual salary, whichever is greater, and a future salary history that 
23.18 	includes annual salary increases at the applicable salary increase rate for the plan specified 
23.19 	in section 356.215, subdivision 4d 8.
23.20 	(c) The prior service credit purchase amount may not be less than the amount 
23.21 	determined by applying, for each year or fraction of a year being purchased, the sum of the 
23.22 	employee contribution rate, the employer contribution rate, and the additional employer 
23.23 	contribution rate, if any, applicable during that period, to the person's annual salary during 
23.24 	that period, or fractional portion of a year's salary, if applicable, plus interest at the annual 
23.25 	rate of 8.5 percentuntil June 30, 2015, and eight percent thereafter compounded annually 
23.26 	from the end of the year in which contributions would otherwise have been made to 
23.27 	the date on which the payment is received at the rate of 8.5 percent for any period for 
23.28 	the Teachers Retirement Association and 8.5 percent for any period, or portion thereof, 
23.29 	through June 30, 2015, and eight percent thereafter, for any other retirement plan listed 
23.30 	in section 356.30, subdivision 3.
23.31 	(d) Unless otherwise provided by statutes governing a specific plan, payment must 
23.32 	be made in one lump sum within one year of the prior service credit authorization or prior 
23.33 	to the member's effective date of retirement, whichever is earlier. Payment of the amount 
23.34 	calculated under this section must be made by the applicable eligible person.
24.1 	(e) However, the current employer or the prior employer may, at its discretion, pay 
24.2 	all or any portion of the payment amount that exceeds an amount equal to the employee 
24.3 	contribution rates in effect during the period or periods of prior service applied to the 
24.4 	actual salary rates in effect during the period or periods of prior service, plus interest at the 
24.5 	rate of 8.5 percent a year compounded annually from the date on which the contributions 
24.6 	would otherwise have been made to the date on which the payment is made at the rate of 
24.7 	8.5 percent for any period for the Teachers Retirement Association and 8.5 percent for any 
24.8 	period, or portion thereof, through June 30, 2015, and eight percent thereafter, for any other 
24.9 	retirement plan listed in section 356.30, subdivision 3. If the employer agrees to payments 
24.10 	under this subdivision, the purchaser must make the employee payments required under 
24.11 	this subdivision within 90 days of the prior service credit authorization. If that employee 
24.12 	payment is made, the employer payment under this subdivision must be remitted to the 
24.13 	chief administrative officer of the public pension plan within 60 days of receipt by the 
24.14 	chief administrative officer of the employee payments specified under this subdivision.

24.15 	EFFECTIVE DATE. This section is effective July 1, 2016.

24.16 	Sec. 5. Minnesota Statutes 2014, section 356.635, is amended by adding a subdivision 
24.17 	to read:
24.18 		Subd. 9a.Definitions. (a) The following definitions apply for purposes of this 
24.19 	subdivision and subdivisions 10 to 12.
24.20 	(b) "Annual addition" means the sum for the limitation year of all pretax and after-tax 
24.21 	contributions made by the member or the member's employer and credited to an account 
24.22 	in the name of the member in any defined contribution plan maintained by the employer.
24.23 	(c) "Compensation" means the compensation actually paid or made available to 
24.24 	a member for any limitation year, including all items of remuneration described in 
24.25 	Code of Federal Regulations, title 26, section 1.415(c)-2(b), and excluding all items of 
24.26 	remuneration described in Code of Federal Regulations, title 26, section 1.415(c)-2(c). 
24.27 	Compensation for pension plan purposes for any limitation year shall not exceed the 
24.28 	applicable federal compensation limit described in section 356.611, subdivision 2.
24.29 	(d) "Limitation year" means the calendar year or fiscal year, whichever is applicable 
24.30 	to the particular pension plan.
24.31 	(e) "Maximum permissible benefit" means an annual benefit of $160,000, 
24.32 	automatically adjusted under section 415(d) of the Internal Revenue Code for each 
24.33 	limitation year ending after December 31, 2001, payable in the form of a single life 
24.34 	annuity. The new limitation shall apply to limitation years ending with or within the 
24.35 	calendar year of the date of the adjustment, but a member's benefits shall not reflect the 
25.1 	adjusted limit prior to January 1 of that calendar year. The maximum permissible benefit 
25.2 	amount shall be further adjusted as follows:
25.3 	(1) if the member has less than ten years of participation, the maximum permissible 
25.4 	benefit shall be multiplied by a fraction, the numerator of which is the number of years (or 
25.5 	part thereof, but not less than one year) of participation in the plan, and the denominator of 
25.6 	which is ten;
25.7 	(2) if the annual benefit begins before the member has attained age 62, the 
25.8 	determination as to whether the maximum permissible benefit limit has been satisfied shall 
25.9 	be made, in accordance with regulations prescribed by the United States secretary of the 
25.10 	treasury, by reducing the limit so that the limit, as so reduced, equals an annual benefit, 
25.11 	beginning when the annual benefit actually begins, which is equivalent to a $160,000, as 
25.12 	adjusted, annual benefit beginning at age 62; and
25.13 	(3) if the annual benefit begins after the member has attained age 65, the 
25.14 	determination as to whether the maximum permissible benefit limit has been satisfied shall 
25.15 	be made, in accordance with regulations prescribed by the United States secretary of the 
25.16 	treasury, by increasing the limit so that the limit, as so increased, equals an annual benefit, 
25.17 	beginning when the annual benefit actually begins, which is equivalent to a $160,000, as 
25.18 	adjusted, annual benefit beginning at age 65.

25.19 	EFFECTIVE DATE. This section is effective July 1, 2016.

25.20 	Sec. 6. Minnesota Statutes 2015 Supplement, section 356.635, subdivision 10, is 
25.21 	amended to read:
25.22 		Subd. 10.Annual benefit limitations; defined benefit plans. (a) The annual benefit 
25.23 	payable to a member shall not exceed the maximum permissible benefit. If the benefit the 
25.24 	member would otherwise receive for a limitation year would result in the payment of an 
25.25 	annual benefit in excess of the maximum permissible benefit, the benefit shall be reduced 
25.26 	to the extent necessary so the benefit does not exceed the maximum permissible benefit.
25.27 	(b) For purposes of applying the limits of section 415(b) of the Internal Revenue 
25.28 	Code, a retirementlimitation in paragraph (a), an annual benefit that is payable in any 
25.29 	form other than a single life annuity and that is subject to section 417(e)(3) of the Internal 
25.30 	Revenue Code mustshall be adjusted to an actuarially equivalent single life annuity 
25.31 	that equals, if the annuity starting date is in a plan year beginning after 2005, the annual 
25.32 	amount of the single life annuity commencing at the same annuity starting date that has 
25.33 	the same actuarial present value as the participant'smember's form of benefit, using 
25.34 	whichever of the following produces the greatest annual amount:
26.1 	(1) the interest rate and the mortality table or other tabular factor specified in the 
26.2 	plan for adjusting benefits in the same form;
26.3 	(2) a 5.5 percent interest rate assumption and the applicable mortality table; or
26.4 	(3) the applicable interest rate under section 417(e)(3) of the Internal Revenue Code 
26.5 	and the applicable mortality table, divided by 1.05.
26.6 	(c) If a member participated in more than one pension plan in which the employer 
26.7 	participates, the benefits under each plan must be reduced proportionately to satisfy the 
26.8 	limitation in paragraph (a).

26.9 	EFFECTIVE DATE. This section is effective July 1, 2016.

26.10 	Sec. 7. Minnesota Statutes 2014, section 356.635, is amended by adding a subdivision 
26.11 	to read:
26.12 		Subd. 11.Annual addition limitation; defined contribution plans. The annual 
26.13 	additions by or on behalf of a member to a defined contribution plan for any limitation 
26.14 	year shall not exceed the lesser of (1) 100 percent of the member's compensation for 
26.15 	the limitation year or (2) the dollar limit in effect for the limitation year under section 
26.16 	415(c)(1)(A) of the Internal Revenue Code, as adjusted by the United States secretary of 
26.17 	the treasury under section 415(d)(1)(C) of the Internal Revenue Code.

26.18 	EFFECTIVE DATE. This section is effective July 1, 2016.

26.19 	Sec. 8. Minnesota Statutes 2014, section 356.635, is amended by adding a subdivision 
26.20 	to read:
26.21 		Subd. 12.Incorporation by reference. Any requirements of section 415(b) and (c) 
26.22 	of the Internal Revenue Code and related regulations and agency guidance not addressed 
26.23 	by subdivisions 10 and 11 shall be considered incorporated by reference, including 
26.24 	provisions applicable to qualified police and firefighters and to survivor and disability 
26.25 	benefits. Subdivisions 10 to 12 shall be interpreted in a manner that is consistent with the 
26.26 	requirements of section 415(b) and (c) of the Internal Revenue Code and the related 
26.27 	regulations.

26.28 	EFFECTIVE DATE. This section is effective July 1, 2016.

26.29 	Sec. 9. Minnesota Statutes 2014, section 356.635, is amended by adding a subdivision 
26.30 	to read:
26.31 		Subd. 13.Correction of errors. The executive director of each plan may correct an 
26.32 	operational, demographic, employer eligibility, or plan document error as the executive 
27.1 	director deems necessary or appropriate to preserve and protect the plan's tax qualification 
27.2 	under section 401(a) of the Internal Revenue Code, including as provided in the Internal 
27.3 	Revenue Service's Employee Plans Compliance Resolution System (EPCRS) or any 
27.4 	successor thereto. To the extent deemed necessary by the executive director to implement 
27.5 	correction, the executive director may:
27.6 	(1) make distributions;
27.7 	(2) transfer assets; or
27.8 	(3) recover an overpayment by reducing future benefit payments or designating 
27.9 	appropriate revenue or source of funding that will restore to the plan the amount of the 
27.10 	overpayment.

27.11 	EFFECTIVE DATE. This section is effective July 1, 2016.

27.12 	Sec. 10. Minnesota Statutes 2014, section 356.96, subdivision 1, is amended to read:
27.13 		Subdivision 1.Definitions. (a) Unless the language or context clearly indicates that 
27.14 	a different meaning is intended, for the purpose of this section, the terms in paragraphs 
27.15 	(b) to (e)this subdivision have the meanings given them.
27.16 	(b) "Chief administrative officer""Executive director" means the executive director 
27.17 	of a covered pension plan or the executive director's designee or representative.
27.18 	(c) "Covered pension plan" means a plan enumerated in section 356.20, subdivision 
27.19 	2, clauses (1) to (4), (8), and (11) to (14), but does not mean the deferred compensation 
27.20 	plan administered under sections 352.965 and 352.97 or to the postretirement health care 
27.21 	savings plan administered under section 352.98.
27.22 	(d) "Governing board" means the Board of Trustees of the Public Employees 
27.23 	Retirement Association, the Board of Trustees of the Teachers Retirement Association, or 
27.24 	the Board of Directors of the Minnesota State Retirement System.
27.25 	(e) "Person" includesmeans an active, retired, deferred, or nonvested inactive 
27.26 	participant in a covered pension plan or a beneficiary of a participant, or an individual 
27.27 	who has applied to be a participant or who is or may be a survivor of a participant, 
27.28 	or the representative of a state agency or other governmental unit that employs active 
27.29 	participants in a covered pension plan.
27.30 	(f) "Petitioner" means a person who has filed a petition for review of an executive 
27.31 	director's determination under this section.

27.32 	EFFECTIVE DATE. This section is effective July 1, 2016.

27.33 	Sec. 11. Minnesota Statutes 2014, section 356.96, subdivision 2, is amended to read:
28.1 		Subd. 2.Right to review appeal to executive director; determination. A 
28.2 	determination made by the chief administrative officerperson may appeal a decision by 
28.3 	the staff of a covered pension plan regarding athe person's eligibility, benefits, or other 
28.4 	rights under the plan with which the person does not agree to the executive director of 
28.5 	the plan. The appeal must be in writing and be delivered to the executive director. The 
28.6 	executive director may overturn, modify, or affirm the staff's decision. The executive 
28.7 	director's determination is subject to review under this section.

28.8 	EFFECTIVE DATE. This section is effective July 1, 2016.

28.9 	Sec. 12. Minnesota Statutes 2014, section 356.96, subdivision 3, is amended to read:
28.10 		Subd. 3.Notice of determination. If the applicable chief administrative officer 
28.11 	denies an application or a written request, modifies a benefit, or terminates a benefit 
28.12 	of a person claiming a right or potential rights under a covered pension plan, the chief 
28.13 	administrative officer shall notify that person through a written notice containing: The 
28.14 	executive director shall issue a written notice of determination to the person who files an 
28.15 	appeal under subdivision 2. The notice of determination must be delivered by certified 
28.16 	mail to the address to which the most recent benefit payment was sent or, if that address 
28.17 	is that of a financial institution, to the last known address of the person. The notice of 
28.18 	determination shall include the following:
28.19 	(1) a statement of the reasons for the determination;
28.20 	(2) a noticestatement that the person may petition the governing board of the 
28.21 	covered pension plan for a review of the determination and that a person's petition for 
28.22 	review must be filed in the administrative office of the covered pension plan withinno 
28.23 	later than 60 days of the receiptafter the date of the written notice of the determination;
28.24 	(3) a statement indicating that a failure to petition for review within 60 days 
28.25 	precludes the person from contesting in any otherfurther administrative or judicial 
28.26 	review or court procedure the issues determined by the chief administrative officer of the 
28.27 	executive director's determination;
28.28 	(4) a statement indicating that all relevant materials, documents, affidavits, and 
28.29 	other records that the person wishes to be reviewed in support of the petition and a list 
28.30 	of any witnesses who will testify before the governing board, along with a summary of 
28.31 	their testimony, must be filed with and received in the administrative office of the covered 
28.32 	pension plan at least 15 days before the date of the hearing under subdivision 10 or as 
28.33 	directed by the administrative law judge who conducts a fact-finding conference under 
28.34 	subdivision 7, paragraph (b), or a contested case hearing under subdivision 12, paragraph 
28.35 	(b); and
29.1 	(5) a summary of this section, including all filing requirements and deadlines.; and
29.2 	(6) the statement required under subdivision 4, paragraph (a), if applicable.

29.3 	EFFECTIVE DATE. This section is effective July 1, 2016.

29.4 	Sec. 13. Minnesota Statutes 2014, section 356.96, subdivision 4, is amended to read:
29.5 		Subd. 4.Termination of benefits. (a) If a covered pension plan decides tothe 
29.6 	executive director's determination will terminate a benefit that is being paid to a person, 
29.7 	before terminating the benefit, the chief administrative officer must, in addition to the 
29.8 	other procedures prescribed in this section, provide the individual with written notice of 
29.9 	the pending benefit termination by certified mail. The notice must explain the reason for 
29.10 	the pending benefit termination. The person must be given anthe notice of determination 
29.11 	must also state that the person has the opportunity to explain, in writing, in person, by 
29.12 	telephone, or by e-mail, the reasons that the benefit should not be terminated.
29.13 	(b) If the chief administrative officer is unable to contact the person andnotice of 
29.14 	determination is returned as undeliverable, and the person cannot be reached by any other 
29.15 	reasonable means of communication, and the executive director determines that a failure 
29.16 	to terminate the benefit will result in unauthorized payment by a covered pension plan, 
29.17 	the chief administrative officerexecutive director may terminate the benefit immediately 
29.18 	upon mailing a written notice containing the information required by subdivision 3 to the 
29.19 	address to which the most recent benefit payment was sent and, if that address is that of a 
29.20 	financial institution, to the last known address of the person.

29.21 	EFFECTIVE DATE. This section is effective July 1, 2016.

29.22 	Sec. 14. Minnesota Statutes 2014, section 356.96, subdivision 5, is amended to read:
29.23 		Subd. 5.Petition for review. (a) Upon receipt of the notice of determination 
29.24 	required in subdivision 3, a person who claims a right under subdivision 2 may petition 
29.25 	the governing board of the covered pension plan for a review of that decision by the 
29.26 	governing board of the covered pension plan the executive director's determination.
29.27 	(b) A petition under this section must be sent to the chief administrative officer 
29.28 	by mail and must be postmarkedThe petitioner must file the petition for review with 
29.29 	the administrative office of the covered pension plan no later than 60 days after the 
29.30 	person receiveddate of the notice of determination required by subdivision 3. Filing of 
29.31 	the petition is effective upon mailing or personal delivery. The petition must include 
29.32 	the person'spetitioner's statement of the reason or reasons that the person believes the 
29.33 	decision of the chief administrative officerdetermination of the executive director 
30.1 	should be reversed or modified. The petition may include all documentation and written 
30.2 	materials that the petitioner deems to be relevant. In developing a record for review by 
30.3 	the board when a decision is appealed, the chief administrative officer may direct that the 
30.4 	applicant participate in a fact-finding session conducted by an administrative law judge 
30.5 	assigned by the Office of Administrative Hearings and, as applicable, participate in a 
30.6 	vocational assessment conducted by a qualified rehabilitation counselor on contract with 
30.7 	the applicable retirement system.

30.8 	EFFECTIVE DATE. This section is effective July 1, 2016.

30.9 	Sec. 15. Minnesota Statutes 2014, section 356.96, subdivision 6, is amended to read:
30.10 		Subd. 6.Failure to petition. If a timely petition for review under subdivision 5 is 
30.11 	not filed with the chief administrative officer,office of the covered pension plan'splan, 
30.12 	the executive director's determination is final and is not subject to further administrative 
30.13 	or judicial review.

30.14 	EFFECTIVE DATE. This section is effective July 1, 2016.

30.15 	Sec. 16. Minnesota Statutes 2014, section 356.96, subdivision 7, is amended to read:
30.16 		Subd. 7.Notice of hearing; fact-finding; filing and timing requirements. (a) 
30.17 	After receiving a petition, the chief administrative officerexecutive director must schedule 
30.18 	a timelyhearing to review of the petition before the governing board of the covered 
30.19 	pension plan or the executive director may defer the scheduling of a hearing until after 
30.20 	a fact-finding conference under paragraph (b). The review must be scheduled to take 
30.21 	into consideration any necessary accommodations to allow the petitioner to participate 
30.22 	in the governing board's review.
30.23 	(b) The executive director may direct the petitioner to participate in a fact-finding 
30.24 	conference conducted by an administrative law judge assigned by the Office of 
30.25 	Administrative Hearings. The fact-finding conference is an informal proceeding not 
30.26 	subject to the provisions of Minnesota Rules, chapter 1400, except that part 1400.7300 
30.27 	shall govern the admissibility of evidence and part 1400.8603 shall govern how the 
30.28 	fact-finding conference is conducted. The administrative law judge must issue a report 
30.29 	and a recommendation to the governing board.
30.30 	(c) If the petitioner's claim relates to disability benefits, the executive director may 
30.31 	direct the petitioner to participate in a vocational assessment conducted by a qualified 
30.32 	rehabilitation counselor under contract with the covered pension plan. The counselor must 
30.33 	issue a report regarding the assessment to the governing board.
31.1 	(b)(d) Not less than 30 calendar days before the date scheduled for the hearing 
31.2 	datebefore the governing board, the chief administrative officerexecutive director must 
31.3 	provide by mail tonotify the petitioner an acknowledgment of the receipt of the person's 
31.4 	petition and a follow-up notice of the time and place of the meeting at which the governing 
31.5 	board is scheduled to consider the petition andconduct the hearing. If there has been 
31.6 	no fact-finding conference under paragraph (b), not less than 15 days before the date 
31.7 	scheduled for the hearing, the petitioner and the executive director must provide a copyto 
31.8 	the governing board and the other party copies of all relevant documents,documentary 
31.9 	evidence, summaries, and recommendations assembled by or on behalf of the plan 
31.10 	administration to be considered by the governing board that will be presented and a list of 
31.11 	witnesses who will testify, along with a summary of their testimony.
31.12 	(c) all documents and materials that the petitioner wishes to be part of the record 
31.13 	for review must be filed with the chief administrative officer and must be received in the 
31.14 	offices of the covered pension plan at least 15 days before the date of the meeting at 
31.15 	which the petition is scheduled to be heard.
31.16 	(d) A(e) The petitioner may request a continuancepostponement of athe date 
31.17 	scheduled for the hearing if the request is received by the chief administrative officer within 
31.18 	before the governing board within a reasonable time, but no later than ten calendar days of 
31.19 	before the scheduled hearing date of the applicable board meeting. The chief administrative 
31.20 	officer must reschedule the review within a reasonable time. only one continuance may be 
31.21 	granted to any petitioner. A petitioner shall be granted only one postponement unless the 
31.22 	applicable covered pension plan agrees to additional postponements.

31.23 	EFFECTIVE DATE. This section is effective July 1, 2016.

31.24 	Sec. 17. Minnesota Statutes 2014, section 356.96, subdivision 8, is amended to read:
31.25 		Subd. 8.Record for review. (a) All evidence, including all records, documents, and 
31.26 	affidavits in the possession of the covered pension plan of which the covered pension plan 
31.27 	desires to avail itself and be considered by the governing board, and all evidence which the 
31.28 	petitioner wishes to present to the governing board, including any evidence which would 
31.29 	otherwise be classified by law as "private," must be made part of the hearing record.
31.30 	(b) The chief administrative officerexecutive director must provide a copy of 
31.31 	the record to each member of the governing board at least sevenfive days before the 
31.32 	scheduled hearing date.
31.33 	(c) Any additional document, affidavit, or other relevant information that the 
31.34 	petitioner requests be part of the record may be admitted with the consent of the governing 
31.35 	board. If a fact-finding conference under subdivision 7, paragraph (b), is not conducted, 
32.1 	the record is limited to those materials provided to the petitioner in accordance with 
32.2 	subdivision 7, paragraph (d), those filed by the petitioner with the covered pension plan 
32.3 	in a timely manner in accordance with subdivision 7, paragraph (e), any vocational 
32.4 	assessment report under subdivision 7, paragraph (c), and any testimony at the hearing 
32.5 	before the governing board. Any additional evidence may be placed in the record pursuant 
32.6 	to subdivision 10, paragraph (b).
32.7 	(d) If a fact-finding conference under subdivision 7, paragraph (b), or a contested 
32.8 	case hearing under subdivision 12, paragraph (b), is conducted, the record before the 
32.9 	governing board must be limited to the following:
32.10 	(1) the record from the Office of Administrative Hearings;
32.11 	(2) seven-page submissions by the petitioner and a representative of the covered 
32.12 	pension plan commenting on the administrative law judge's recommendation; and
32.13 	(3) any vocational assessment report under subdivision 7, paragraph (c).

32.14 	EFFECTIVE DATE. This section is effective July 1, 2016.

32.15 	Sec. 18. Minnesota Statutes 2014, section 356.96, subdivision 9, is amended to read:
32.16 		Subd. 9.Amended determination. At any time before the hearing before the 
32.17 	governing board, for good cause shown and made part of the records of the plan, the chief 
32.18 	administrative officerexecutive director may reverse, alter, amend, or modify the prior 
32.19 	decision which is subject to review under this section by issuing an amended decision 
32.20 	determination to the petitioner. Upon doing so, the chief administrative officerexecutive 
32.21 	director may cancel the governing board's scheduled review of the person's petition and 
32.22 	shall so notify the petitioner.

32.23 	EFFECTIVE DATE. This section is effective July 1, 2016.

32.24 	Sec. 19. Minnesota Statutes 2014, section 356.96, subdivision 10, is amended to read:
32.25 		Subd. 10.Board hearing. (a) The governing board shall hold a timely hearing 
32.26 	on a petition for review as part of a regularly scheduled board meeting, or as part of 
32.27 	a special meeting if so scheduled. All governing board members who participate in the 
32.28 	decision-making process must be familiar with the record. The governing board shall 
32.29 	make its decision on a petition solely on the record as submitted and on the proceedings 
32.30 	of the hearing.
32.31 	(b) At the hearing, the petitioner, the petitioner's attorney representative, if any, and 
32.32 	the chief administrative officerexecutive director and a representative of the covered 
32.33 	pension plan who does not also serve as the governing board's legal advisor during the 
33.1 	board's decision-making process, may state and discuss with the governing board their 
33.2 	positions with respect to the petition. If no fact-finding conference under subdivision 
33.3 	7, paragraph (b), or contested case hearing under subdivision 12, paragraph (b), was 
33.4 	conducted, additional evidence may be received in the form of testimony from previously 
33.5 	disclosed witnesses. The governing board may allow further documentation to be placed 
33.6 	in the record at the board meeting only with the agreement of both the chief administrative 
33.7 	officerexecutive director and the petitioner. The chief administrative officerexecutive 
33.8 	director may not otherwise participate in the board's decision-making process.
33.9 	(b) When a petition presents a contested issue of law, an assistant attorney general 
33.10 	may participate and may argue on behalf of the legal position taken by the chief 
33.11 	administrative officer if that assistant attorney general does not also serve as the governing 
33.12 	board's legal advisor during the board's decision-making process.
33.13 	(c) A motion by a board member, supported by a summary of the relevant facts, 
33.14 	conclusions and reasons, as properly amended and approved by a majority of the 
33.15 	governing board, constitutes the board's final decision. A verbatim statement of the 
33.16 	board's final decision must be served upon the petitioner. If the decision is contrary to the 
33.17 	petitioner's desired outcome, the notice shall inform the petitioner of the appeal rights set 
33.18 	forth in subdivision 13.
33.19 	(d)(c) If a petitioner who received timely notice of a scheduled hearing fails to 
33.20 	appear, the governing board may nevertheless hear the petition and issue a decision.
33.21 	(d) The governing board's decision shall be made upon a motion by a board member 
33.22 	and approval by a majority of the governing board. The governing board must issue 
33.23 	its decision as a written order containing findings of fact, conclusions of law, and the 
33.24 	board's decision no later than 30 days after the hearing. If the decision is contrary to the 
33.25 	petitioner's desired outcome, the notice must inform the petitioner of the appeal rights set 
33.26 	forth in subdivision 13.

33.27 	EFFECTIVE DATE. This section is effective July 1, 2016.

33.28 	Sec. 20. Minnesota Statutes 2014, section 356.96, subdivision 11, is amended to read:
33.29 		Subd. 11.Disability medical issues. (a) If a person petitions the governing board 
33.30 	the petitioner seeks to reverse or modify a determination which foundby the executive 
33.31 	director that there exists nowas insufficient medical data supportingto support an 
33.32 	application for disability benefits, the governing board may reverse that determination 
33.33 	only if there is in fact medical evidence supporting the application. The governing board 
33.34 	has the discretion to resubmit a disability benefit application at any time to a medical 
34.1 	advisor for reconsideration, and the resubmission may include an instruction that further 
34.2 	medical examinations be obtained.
34.3 	(b) The governing board may make a determination contrary to the recommendation 
34.4 	of the medical advisor only if there is expert medical evidence in the record to support 
34.5 	its contrary decision. If there is no medical evidence contrary to the opinion of the 
34.6 	medical advisor in the record and the medical advisor attests that the decision was made in 
34.7 	accordance with the applicable disability standard, the board must follow the decision of 
34.8 	the medical advisor regarding the cause of the disability.
34.9 	(c) The obligation of the governing board to follow the decision of the medical 
34.10 	advisor under paragraph (b) does not apply to instances when the governing board makes 
34.11 	a determination different from the recommendation of the medical advisor on issues 
34.12 	that do not involve medical issues.

34.13 	EFFECTIVE DATE. This section is effective July 1, 2016.

34.14 	Sec. 21. Minnesota Statutes 2014, section 356.96, subdivision 12, is amended to read:
34.15 		Subd. 12.Referral for administrative hearing. (a) Notwithstanding any provision 
34.16 	of sections 14.03, 14.06, and 14.57 to 14.69 to the contrary, a challenge to a determination 
34.17 	of the chief administrative officer of a covered pension planA fact-finding conference 
34.18 	under subdivision 7, paragraph (b), must be conducted exclusively under the procedures 
34.19 	set forth in this section and is not as a contested case under chapter 14.
34.20 	(b) Notwithstanding the provisions of paragraph (a), A governing board, in its sole 
34.21 	discretion, may refer a petition brought under this section to the Office of Administrative 
34.22 	Hearings for a contested case hearing under sections 14.57 to 14.69.

34.23 	EFFECTIVE DATE. This section is effective July 1, 2016.

34.24 	Sec. 22. Minnesota Statutes 2014, section 356.96, subdivision 13, is amended to read:
34.25 		Subd. 13.Appeal of the governing board's decision; judicial review. WithinNo 
34.26 	later than 60 days ofafter the date of the mailing of the notice of the governing board's 
34.27 	decision, the petitioner may appeal the decision by filing a writ of certiorari with the 
34.28 	Court of Appeals under section 606.01 and Rule 115 of the Minnesota Rules of Civil 
34.29 	Appellate Procedure. Failure by a person to appeal to the Court of Appeals within the 
34.30 	60-day period precludes the person from later raising, in any subsequent administrative 
34.31 	hearing or court proceeding, those substantive and procedural issues that reasonably 
34.32 	should have been raised upon a timely appeal.

35.1 	Sec. 23.  REPEALER.
 35.2 	Minnesota Statutes 2014, sections 356.611, subdivisions 3, 3a, 4, and 5; and 356.96, 
35.3 	subdivisions 14 and 15, are repealed.

35.4 	EFFECTIVE DATE. This section is effective July 1, 2016.

35.5 	ARTICLE 6
35.6 	ACTUARIAL ASSUMPTIONS

35.7 	Section 1. Minnesota Statutes 2015 Supplement, section 356.215, subdivision 8, 
35.8 	is amended to read:
35.9 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use the 
35.10 	applicable following interest assumption:
35.11 	(1) select and ultimate interest rate assumption

35.12
35.13	plan
	ultimate interest 
rate assumption
		
35.14	teachers retirement plan
	8.5% 
		
35.15 	The select preretirement interest rate assumption for the period through June 30, 
35.16 	2017, is eight percent.
35.17 	(2) single rate interest rate assumption

35.18
35.19	plan
	interest rate 
assumption
		
35.20	general state employees retirement plan
	8%
		
35.21	correctional state employees retirement plan
	8
		
35.22	State Patrol retirement plan
	8
		
35.23
35.24
35.25	legislators retirement plan, and for the 
constitutional officers calculation of total plan 
liabilities
	0
		
35.26	judges retirement plan
	8
		
35.27	general public employees retirement plan
	8
		
35.28	public employees police and fire retirement plan
	8
		
35.29
35.30	local government correctional service retirement 
plan
	8
		
35.31	teachers retirement plan
	8
		
35.32	St. Paul teachers retirement plan
	8
		
35.33	Bloomington Fire Department Relief Association
	6
		
35.34
35.35	local monthly benefit volunteer firefighter relief 
associations
	5
		
35.36
35.37	monthly benefit retirement plans in the statewide 
volunteer firefighter retirement plan
	6
		
35.38 	(b)(1) If funding stability has been attained, the valuation must use a postretirement 
35.39 	adjustment rate actuarial assumption equal to the postretirement adjustment rate specified 
36.1 	in section 354A.27, subdivision 7;354A.29, subdivision 9;, or 356.415, subdivision 1, 
36.2 	whichever applies.
36.3 	(2) If funding stability has not been attained, the valuation must use a select 
36.4 	postretirement adjustment rate actuarial assumption equal to the postretirement adjustment 
36.5 	rate specified in section 354A.27, subdivision 6a;354A.29, subdivision 8;, or 356.415, 
36.6 	subdivision 1a, 1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the 
36.7 	approved actuary estimates that the plan will attain the defined funding stability measure, 
36.8 	and thereafter an ultimate postretirement adjustment rate actuarial assumption equal 
36.9 	to the postretirement adjustment rate under section 354A.27, subdivision 7;354A.29, 
36.10 	subdivision 9;, or 356.415, subdivision 1, for the applicable period or periods beginning 
36.11 	when funding stability is projected to be attained.
36.12 	(c) The actuarial valuation must use the applicable following single rate future salary 
36.13 	increase assumption, the applicable following modified single rate future salary increase 
36.14 	assumption, or the applicable following graded rate future salary increase assumption:
36.15 	(1) single rate future salary increase assumption

36.16	plan
	future salary increase assumption
	
36.17	legislators retirement plan
		5%
	
36.18	judges retirement plan 
		2.75
	
36.19
36.20	Bloomington Fire Department Relief 
Association
		4
	
36.21 	(2) age-related future salary increase age-related select and ultimate future salary 
36.22 	increase assumption or graded rate future salary increase assumption

36.23	plan
	future salary increase assumption
	
36.24	local government correctional service retirement plan
	assumption B
	
36.25	St. Paul teachers retirement plan
	assumption A
	
36.26 	For plans other than the St. Paul Teachers 
36.27 	Retirement plan and the local government 
36.28 	correctional service retirement plan, the 
36.29 	select calculation is: Fund Association, 
36.30 	during thea designated select period of 15 
36.31 	years, in addition to the age-based rates 
36.32 	shown below, a designated percentage rate 
36.33 	of 0.2 percent is multiplied by the result of 
36.34 	the designated integer15 minus T, where T 
36.35 	is the number of completed years of service, 
36.36 	and is added to the applicable future salary 
36.37 	increase assumption. The designated select 
37.1 	period is ten years and the designated integer 
37.2 	is ten for the local government correctional 
37.3 	service retirement plan and 15 for the St. 
37.4 	Paul Teachers Retirement Fund Association. 
37.5 	The designated percentage rate is 0.2 percent 
37.6 	for the St. Paul Teachers Retirement Fund 
37.7 	Association.
37.8 	The ultimate future salary increase assumption is:

37.9	age
	A
	B
		
37.10	16
	5.9% 
	8.75%
		
37.11	17
	5.9 
	8.75
		
37.12	18
	5.9 
	8.75
		
37.13	19
	5.9 
	8.75
		
37.14	20
	5.9 
	8.75
		
37.15	21
	5.9 
	8.5
		
37.16	22
	5.9 
	8.25
		
37.17	23
	5.85 
	8
		
37.18	24
	5.8 
	7.75
		
37.19	25
	5.75 
	7.5
		
37.20	26
	5.7 
	7.25
		
37.21	27
	5.65 
	7
		
37.22	28
	5.6 
	6.75
		
37.23	29
	5.55 
	6.5
		
37.24	30
	5.5 
	6.5
		
37.25	31
	5.45 
	6.25
		
37.26	32
	5.4 
	6.25
		
37.27	33
	5.35 
	6.25
		
37.28	34
	5.3 
	6
		
37.29	35
	5.25 
	6
		
37.30	36
	5.2 
	5.75
		
37.31	37
	5.15 
	5.75
		
37.32	38
	5.1 
	5.75
		
37.33	39
	5.05 
	5.5
		
37.34	40
	5 
	5.5
		
37.35	41
	4.95 
	5.5
		
37.36	42
	4.9 
	5.25
		
37.37	43
	4.85 
	5
		
37.38	44
	4.8 
	5
		
37.39	45
	4.75 
	4.75
		
37.40	46
	4.7 
	4.75
		
37.41	47
	4.65 
	4.75
		
37.42	48
	4.6 
	4.75
		
38.1	49
	4.55 
	4.75
		
38.2	50
	4.5 
	4.75
		
38.3	51
	4.45 
	4.75
		
38.4	52
	4.4 
	4.75
		
38.5	53
	4.35 
	4.75
		
38.6	54
	4.3 
	4.75
		
38.7	55
	4.25 
	4.5
		
38.8	56
	4.2 
	4.5
		
38.9	57
	4.15 
	4.25
		
38.10	58
	4.1 
	4
		
38.11	59
	4.05 
	4
		
38.12	60
	4 
	4
		
38.13	61
	4 
	4
		
38.14	62
	4 
	4
		
38.15	63
	4 
	4
		
38.16	64
	4 
	4
		
38.17	65
	4 
	3.75
		
38.18	66
	4 
	3.75
		
38.19	67
	4 
	3.75
		
38.20	68
	4 
	3.75
		
38.21	69
	4 
	3.75
		
38.22	70
	4 
	3.75
		
38.23 	(3) service-related ultimate future salary increase assumption

38.24
38.25	general state employees retirement plan of the 
Minnesota State Retirement System
	assumption A
	
38.26
38.27	general employees retirement plan of the Public 
Employees Retirement Association
	assumption B
	
38.28	Teachers Retirement Association
	assumption C
	
38.29	public employees police and fire retirement plan
	assumption D
	
38.30	State Patrol retirement plan
	assumption E
	
38.31
38.32	correctional state employees retirement plan of the 
Minnesota State Retirement System
	assumption F

38.33
38.34	service 
length
	A
	B
	C
	D
	E
	F
	
38.35
38.36	1
	10.2514%
	11.78 
11.5%
	12 9.5%
	12.75%
	7.75%
	5.75%
	
38.37	2
	7.85 11.5
	8.65 8.5
	9 9.5
	10.75
	7.25
	5.6
	
38.38	3
	6.65 6.25
	7.21 7
	8 7.75
	8.75
	6.75
	5.45
	
38.39	4
	5.95 5.5
	6.33 6
	7.5 7.25
	7.75
	6.5
	5.3
	
38.40	5
	5.45 5.25
	5.72 5.5
	7.25 7
	6.25
	6.25
	5.15
	
38.41	6
	5.05 5.15
	5.27 5.2
	7
	5.85
	6
	5
	
38.42	7
	4.75 5
	4.91 4.9
	6.85
	5.55
	5.75
	4.85
	
38.43	8
	4.45 4.75
	4.62 4.8
	6.7
	5.35
	5.6
	4.7
	
39.1	9
	4.25 4.5
	4.38 4.7
	6.55
	5.15
	5.45
	4.55
	
39.2	10
	4.15 4.25
	4.17 4.5
	6.4
	5.05
	5.3
	4.4
	
39.3	11
	3.95 4.2
	3.99 4.25
	6.25
	4.95
	5.15
	4.3
	
39.4	12
	3.85 4.15
	3.83 4.1
	6
	4.85
	5
	4.2
	
39.5	13
	3.75 4.1
	3.69 4
	5.75
	4.75
	4.85
	4.1
	
39.6	14
	3.55 4.05
	3.57 3.9
	5.5
	4.65
	4.7
	4
	
39.7	15
	3.45 4
	3.45 3.9
	5.25
	4.55
	4.55
	3.9
	
39.8	16
	3.35 3.95
	3.35 3.85
	5
	4.55
	4.4
	3.8
	
39.9	17
	3.25 3.9
	3.26 3.8
	4.75
	4.55
	4.25
	3.7
	
39.10	18
	3.25 3.85
	3.25 3.75
	4.5
	4.55
	4.1
	3.6
	
39.11	19
	3.25 3.8
	3.25 3.75
	4.25 4.3
	4.55
	3.95
	3.5
	
39.12	20
	3.25 3.75
	3.25 3.75
	4 4.2
	4.55
	3.8
	3.5
	
39.13	21
	3.25 3.7
	3.25 3.75
	3.9 4.1
	4.45
	3.75
	3.5
	
39.14	22
	3.25 3.65
	3.25 3.7
	3.8 4
	4.35
	3.75
	3.5
	
39.15	23
	3.25 3.6
	3.25 3.6
	3.7 3.9
	4.25
	3.75
	3.5
	
39.16	24
	3.25 3.55
	3.25 3.6
	3.6 3.8
	4.25
	3.75
	3.5
	
39.17	25
	3.25 3.5
	3.25 3.6
	3.5 3.7
	4.25
	3.75
	3.5
	
39.18	26
	3.25 3.5
	3.25 3.5
	3.5 3.6
	4.25
	3.75
	3.5
	
39.19	27
	3.25 3.5
	3.25 3.5
	3.5
	4.25
	3.75
	3.5
	
39.20	28
	3.25 3.5
	3.25 3.5
	3.5
	4.25
	3.75
	3.5
	
39.21	29
	3.25 3.5
	3.25 3.5
	3.5
	4.25
	3.75
	3.5
	
39.22	30 or more
	3.25 3.5
	3.25 3.5
	3.5
	4.25
	3.75
	3.5
	
39.23 	(d) The actuarial valuation must use the applicable following payroll growth 
39.24 	assumption for calculating the amortization requirement for the unfunded actuarial 
39.25 	accrued liability where the amortization retirement is calculated as a level percentage 
39.26 	of an increasing payroll:

39.27	plan
	payroll growth assumption
	
39.28
39.29	general state employees retirement plan of the 
Minnesota State Retirement System 
	3.5%
	
39.30	correctional state employees retirement plan 
	3.5
	
39.31	State Patrol retirement plan 
	3.5
	
39.32	judges retirement plan 
	2.75
	
39.33
39.34	general employees retirement plan of the Public 
Employees Retirement Association 
	3.5
	
39.35	public employees police and fire retirement plan 
	3.5
	
39.36	local government correctional service retirement plan 
	3.5
	
39.37	teachers retirement plan
	3.75 3.5
	
39.38	St. Paul teachers retirement plan
	4
	
39.39 	(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a 
39.40 	different salary assumption or a different payroll increase assumption:
39.41 	(1) has been proposed by the governing board of the applicable retirement plan;
40.1 	(2) is accompanied by the concurring recommendation of the actuary retained under 
40.2 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
40.3 	most recent actuarial valuation report if section 356.214 does not apply; and
40.4 	(3) has been approved or deemed approved under subdivision 18.

40.5 	EFFECTIVE DATE. This section is effective July 1, 2016, and applies to actuarial 
40.6 	valuations prepared on or after that date.