1.1 	A bill for an act
1.2 	relating to retirement; financial solvency measures for the Minnesota State 
1.3 	Retirement System, St. Paul Teachers Retirement Fund Association, and 
1.4 	Teachers Retirement Association; increasing certain contribution rates; reducing 
1.5 	certain postretirement adjustment increase rates; revising certain postretirement 
1.6 	adjustment provisions; extending the amortization target date for the Teachers 
1.7 	Retirement Association; amending Minnesota Statutes 2014, sections 352.04, 
1.8 	subdivisions 2, 3, by adding a subdivision; 354.42, subdivision 3; 354A.12, 
1.9 	subdivision 2a; Minnesota Statutes 2015 Supplement, sections 354A.29, 
1.10 	subdivision 7; 356.215, subdivisions 8, 11; 356.415, subdivisions 1a, 1d, 1e, 1f; 
1.11 	repealing Minnesota Statutes 2015 Supplement, sections 354A.29, subdivisions 
1.12 	8, 9; 356.415, subdivision 1.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2014, section 352.04, subdivision 2, is amended to read:
1.15 		Subd. 2.Employee contributions. (a) The employee contribution to the fund must 
1.16 	be equal to the following percent of salary:

1.17 | | ~~from July 1, 2010, to June 30, 2014~~ | ~~5~~
1.18

1.19

from July 1, 2014, ~~and thereafter~~ to June 30, 
2017

5.5

1.20 | | from July 1, 2017, and thereafter | 6
1.21 	(b) These contributions must be made by deduction from salary as provided in 
1.22 	subdivision 4.

1.23 	EFFECTIVE DATE. This section is effective June 30, 2016.

1.24 	Sec. 2. Minnesota Statutes 2014, section 352.04, subdivision 3, is amended to read:
1.25 		Subd. 3.Employer contributions. The employer contribution to the fund must be 
1.26 	equal to the following percent of salary:

2.1 | | ~~from July 1, 2010, to June 30, 2014~~ | ~~5~~
2.2

2.3

from July 1, 2014, ~~and thereafter~~ to June 30, 
2017

5.5

2.4 | | from July 1, 2017, and thereafter | 6

2.5 	EFFECTIVE DATE. This section is effective June 30, 2016.

2.6 	Sec. 3. Minnesota Statutes 2014, section 352.04, is amended by adding a subdivision 
2.7 	to read:
2.8 		Subd. 3a.Additional employer contribution; expiration. (a) Effective July 1, 
2.9 	2017, an additional employer contribution to the general state employees retirement fund 
2.10 	of the Minnesota State Retirement System must be made equal to one percent of salary.
2.11 	(b) This subdivision expires effective the first day of the fiscal year immediately 
2.12 	following the fiscal year in which the market value of the assets of the general state 
2.13 	employees retirement plan of the Minnesota State Retirement System equals or exceeds 
2.14 	the actuarial accrued liability of the plan as determined by the actuarial valuation prepared 
2.15 	under section 356.215 by the approved actuary retained under section 356.214.

2.16 	EFFECTIVE DATE. This section is effective June 30, 2016.

2.17 	Sec. 4. Minnesota Statutes 2014, section 354.42, subdivision 3, is amended to read:
2.18 		Subd. 3.Employer. (a) The regular employer contribution to the fund by Special 
2.19 	School District No. 1, Minneapolis, is an amount equal to the applicable following 
2.20 	percentage of salary of each coordinated member and the applicable percentage of salary 
2.21 	of each basic member specified in paragraph (c).
2.22 	The additional employer contribution to the fund by Special School District No. 1, 
2.23 	Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a 
2.24 	coordinated member or who is a basic member.
2.25 	(b) The regular employer contribution to the fund by Independent School District 
2.26 	No. 709, Duluth, is an amount equal to the applicable percentage of salary of each old law 
2.27 	or new law coordinated member specified for the coordinated program in paragraph (c).
2.28 	(c) The employer contribution to the fund for every other employer is an amount 
2.29 	equal to the applicable following percentage of the salary of each coordinated member and 
2.30 	the applicable following percentage of the salary of each basic member:

2.31 | | Period | Coordinated Member | | Basic Member
2.32 | | ~~from July 1, 2013, until June 30, 2014~~ | | ~~7 percent~~ | | ~~11 percent~~
3.1

3.2

after June 30, 2014, through June 30, 
2017

7.5 percent

11.5 percent

3.3 | | after June 30, 2017 | | 8.5 percent | | 11.5 percent
3.4 	(d) When an employer contribution rate changes for a fiscal year, the new 
3.5 	contribution rate is effective for the entire salary paid for each employer unit with the 
3.6 	first payroll cycle reported.
3.7 	(e) After June 30, 2015, if a contribution rate revision is made under subdivisions 
3.8 	4a, 4b, and 4c, the employer contributions under paragraphs (a), (b), and (c) must be 
3.9 	adjusted accordingly.
3.10 	(f) Effective July 1, 2017, the employer shall make the regular employer contributions 
3.11 	specified in paragraph (c) on behalf of any retired member of the Teachers Retirement 
3.12 	Association who resumes teaching in any employer unit to which this chapter applies.

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

3.14 	Sec. 5. Minnesota Statutes 2014, section 354A.12, subdivision 2a, is amended to read:
3.15 		Subd. 2a.Employer regular and additional contributions. (a) The employing 
3.16 	units shall make the following employer contributions to the teachers retirement fund 
3.17 	association:
3.18 	(1) for any coordinated member of the St. Paul Teachers Retirement Fund 
3.19 	Association, the employing unit shall make a regular employer contribution to the 
3.20 	retirement fund association in an amount equal to the designated percentage of the salary 
3.21 	of the coordinated member as provided below:

3.22 | | after June 30, 2014 | 5.5 percent
3.23 | | after June 30, 2015 | 6 percent
3.24 | | after June 30, 2016 | 6.25 percent
3.25 | | after June 30, 2017 | ~~6.5~~7.5 percent
3.26 | | after June 30, 2018 | 8.0 percent
3.27 	(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the 
3.28 	employing unit shall make a regular employer contribution to the respective retirement 
3.29 	fund in an amount according to the schedule below:

3.30 | | after June 30, 2014 | 9 percent of salary
3.31 | | after June 30, 2015 | 9.5 percent of salary
3.32 | | after June 30, 2016 | 9.75 percent of salary
3.33 | | after June 30, 2017 | ~~10~~11 percent of salary
3.34 | | after June 30, 2018 | 11.5 percent of salary
4.1 	(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the 
4.2 	employing unit shall make an additional employer contribution to the respective fund in 
4.3 	an amount equal to 3.64 percent of the salary of the basic member;
4.4 	(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association, 
4.5 	the employing unit shall make an additional employer contribution to the respective fund 
4.6 	in an amount equal to 3.84 percent of the coordinated member's salary.
4.7 	(b) The regular and additional employer contributions must be remitted directly to 
4.8 	the St. Paul Teachers Retirement Fund Association at least once each month. Delinquent 
4.9 	amounts are payable with interest under the procedure in subdivision 1a.
4.10 	(c) Payments of regular and additional employer contributions for school district 
4.11 	or technical college employees who are paid from normal operating funds must be made 
4.12 	from the appropriate fund of the district or technical college.
4.13 	(d) When an employer contribution rate changes for a fiscal year, the new 
4.14 	contribution rate is effective for the entire salary paid by the employer with the first 
4.15 	payroll cycle reported.

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

4.17 	Sec. 6. Minnesota Statutes 2015 Supplement, section 354A.29, subdivision 7, is 
4.18 	amended to read:
4.19 		Subd. 7.Eligibility for ~~payment~~and calculation of postretirement adjustments.
 4.20 	(a) Annually, after June 30, the board of trustees of the St. Paul Teachers Retirement 
4.21 	Fund Association must determine the amount of any postretirement adjustment using the 
4.22 	procedures in this subdivision ~~and subdivision 8 or 9, whichever is applicable~~.
4.23 	(b) On January 1, each person who has been receiving an annuity or benefit under 
4.24 	the articles of incorporation, the bylaws, or this chapter, whose effective date of benefit 
4.25 	commencement occurred on or before July 1 of the immediately preceding calendar year 
4.26 	~~immediately before the adjustment~~, is eligible to receive a postretirement increase ~~as~~ 
4.27 	~~specified in subdivision 8 or 9~~ as determined under paragraph (c), clause (1) or (2), 
4.28 	whichever applies.
4.29 	(c) The amount provided for under this subdivision is the full postretirement increase 
4.30 	to be applied as a permanent increase to the regular payment of each eligible member.
4.31 	(1) A one percent postretirement increase shall apply for any eligible member 
4.32 	whose effective date of benefit commencement occurred on or before January 1 of the 
4.33 	immediately preceding calendar year.
5.1 	(2) A one-half of one percent postretirement increase shall apply for any eligible 
5.2 	member whose effective date of benefit commencement occurred after January 1 of the 
5.3 	immediately preceding calendar year.

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

5.5 	Sec. 7. Minnesota Statutes 2015 Supplement, section 356.215, subdivision 8, is 
5.6 	amended to read:
5.7 		Subd. 8.Interest and salary assumptions. (a) The actuarial valuation must use the 
5.8 	applicable following interest assumption:
5.9 	(1) select and ultimate interest rate assumption

5.10

5.11

plan

ultimate interest 
rate assumption

5.12 | teachers retirement plan | 8.5% |
5.13 	The select preretirement interest rate assumption for the period through June 30, 
5.14 	2017, is eight percent.
5.15 	(2) single rate interest rate assumption

5.16

5.17

plan

interest rate 
assumption

5.18 | general state employees retirement plan | 8% |
5.19 | correctional state employees retirement plan | 8 |
5.20 | State Patrol retirement plan | 8 |
5.21
5.22

5.23

legislators retirement plan, and for the 
constitutional officers calculation of total plan 
liabilities

0

5.24 | judges retirement plan | 8 |
5.25 | general public employees retirement plan | 8 |
5.26 | public employees police and fire retirement plan | 8 |
5.27

5.28

local government correctional service retirement 
plan

8

5.29 | St. Paul teachers retirement plan | 8 |
5.30 | Bloomington Fire Department Relief Association | 6 |
5.31

5.32

local monthly benefit volunteer firefighter relief 
associations

5

5.33

5.34

monthly benefit retirement plans in the statewide 
volunteer firefighter retirement plan

6

5.35 	(b)(1) If funding stability has been attained, the valuation of each public pension 
5.36 	and retirement plan enumerated in section 356.20, subdivision 2, clauses (2), (4), (8), 
5.37 	(11), and (13), must use a postretirement adjustment rate actuarial assumption equal to 
5.38 	the postretirement adjustment rate specified in section ~~354A.27, subdivision 7; 354A.29,~~ 
5.39 	~~subdivision 9; or~~356.415, subdivision ~~1~~ 1b, 1c, 1e, or 1f, whichever applies.
6.1 	(2) If funding stability has not been attained, the valuation of each public pension 
6.2 	and retirement plan enumerated in section 356.20, subdivision 2, clauses (2), (4), (8), (11), 
6.3 	and (13), must use a select postretirement adjustment rate actuarial assumption equal to 
6.4 	the postretirement adjustment rate specified in section ~~354A.27, subdivision 6a; 354A.29,~~ 
6.5 	~~subdivision 8; or~~356.415, subdivision ~~1a,~~ 1b, 1c, ~~1d,~~ 1e, or 1f, whichever applies, for a 
6.6 	period ending when the approved actuary estimates that the plan will attain the defined 
6.7 	funding stability measure, and thereafter an ultimate postretirement adjustment rate 
6.8 	actuarial assumption equal to the postretirement adjustment rate under section ~~354A.27,~~ 
6.9 	~~subdivision 7; 354A.29, subdivision 9; or~~356.415, subdivision ~~1~~ 1b, 1c, 1e, or 1f, for the 
6.10 	applicable period or periods beginning when funding stability is projected to be attained.
6.11 	(3) The valuation of each public pension and retirement plan enumerated in section 
6.12 	356.20, subdivision 2, clauses (1), (3), (5), and (12), must use a postretirement adjustment 
6.13 	rate actuarial assumption equal to the postretirement adjustment rate specified in section 
6.14 	354A.29 or 356.415, subdivision 1a or 1d, whichever applies.
6.15 	(c) The actuarial valuation must use the applicable following single rate future salary 
6.16 	increase assumption, the applicable following modified single rate future salary increase 
6.17 	assumption, or the applicable following graded rate future salary increase assumption:
6.18 	(1) single rate future salary increase assumption

6.19 | plan | future salary increase assumption
6.20 | legislators retirement plan | | 5%
6.21 | judges retirement plan | | 2.75
6.22

6.23

Bloomington Fire Department Relief 
Association

4

6.24 	(2) age-related future salary increase age-related select and ultimate future salary 
6.25 	increase assumption or graded rate future salary increase assumption

6.26 | plan | future salary increase assumption
6.27 | local government correctional service retirement plan | assumption B
6.28 | St. Paul teachers retirement plan | assumption A
6.29 	For plans other than the St. Paul teachers 
6.30 	retirement plan and the local government 
6.31 	correctional service retirement plan, the 
6.32 	select calculation is: during the designated 
6.33 	select period, a designated percentage rate 
6.34 	is multiplied by the result of the designated 
6.35 	integer minus T, where T is the number of 
6.36 	completed years of service, and is added 
6.37 	to the applicable future salary increase 
7.1 	assumption. The designated select period 
7.2 	is ten years and the designated integer is 
7.3 	ten for the local government correctional 
7.4 	service retirement plan and 15 for the St. 
7.5 	Paul Teachers Retirement Fund Association. 
7.6 	The designated percentage rate is 0.2 percent 
7.7 	for the St. Paul Teachers Retirement Fund 
7.8 	Association.
7.9 	The ultimate future salary increase assumption is:

7.10 | age | A | B |
7.11 | 16 | 5.9% | 8.75% |
7.12 | 17 | 5.9 | 8.75 |
7.13 | 18 | 5.9 | 8.75 |
7.14 | 19 | 5.9 | 8.75 |
7.15 | 20 | 5.9 | 8.75 |
7.16 | 21 | 5.9 | 8.5 |
7.17 | 22 | 5.9 | 8.25 |
7.18 | 23 | 5.85 | 8 |
7.19 | 24 | 5.8 | 7.75 |
7.20 | 25 | 5.75 | 7.5 |
7.21 | 26 | 5.7 | 7.25 |
7.22 | 27 | 5.65 | 7 |
7.23 | 28 | 5.6 | 6.75 |
7.24 | 29 | 5.55 | 6.5 |
7.25 | 30 | 5.5 | 6.5 |
7.26 | 31 | 5.45 | 6.25 |
7.27 | 32 | 5.4 | 6.25 |
7.28 | 33 | 5.35 | 6.25 |
7.29 | 34 | 5.3 | 6 |
7.30 | 35 | 5.25 | 6 |
7.31 | 36 | 5.2 | 5.75 |
7.32 | 37 | 5.15 | 5.75 |
7.33 | 38 | 5.1 | 5.75 |
7.34 | 39 | 5.05 | 5.5 |
7.35 | 40 | 5 | 5.5 |
7.36 | 41 | 4.95 | 5.5 |
7.37 | 42 | 4.9 | 5.25 |
7.38 | 43 | 4.85 | 5 |
7.39 | 44 | 4.8 | 5 |
7.40 | 45 | 4.75 | 4.75 |
7.41 | 46 | 4.7 | 4.75 |
7.42 | 47 | 4.65 | 4.75 |
8.1 | 48 | 4.6 | 4.75 |
8.2 | 49 | 4.55 | 4.75 |
8.3 | 50 | 4.5 | 4.75 |
8.4 | 51 | 4.45 | 4.75 |
8.5 | 52 | 4.4 | 4.75 |
8.6 | 53 | 4.35 | 4.75 |
8.7 | 54 | 4.3 | 4.75 |
8.8 | 55 | 4.25 | 4.5 |
8.9 | 56 | 4.2 | 4.5 |
8.10 | 57 | 4.15 | 4.25 |
8.11 | 58 | 4.1 | 4 |
8.12 | 59 | 4.05 | 4 |
8.13 | 60 | 4 | 4 |
8.14 | 61 | 4 | 4 |
8.15 | 62 | 4 | 4 |
8.16 | 63 | 4 | 4 |
8.17 | 64 | 4 | 4 |
8.18 | 65 | 4 | 3.75 |
8.19 | 66 | 4 | 3.75 |
8.20 | 67 | 4 | 3.75 |
8.21 | 68 | 4 | 3.75 |
8.22 | 69 | 4 | 3.75 |
8.23 | 70 | 4 | 3.75 |
8.24 	(3) service-related ultimate future salary increase assumption

8.25

8.26

general state employees retirement plan of the 
Minnesota State Retirement System

assumption A

8.27

8.28

general employees retirement plan of the Public 
Employees Retirement Association

assumption B

8.29 | Teachers Retirement Association | assumption C
8.30 | public employees police and fire retirement plan | assumption D
8.31 | State Patrol retirement plan | assumption E
8.32

8.33

correctional state employees retirement plan of the 
Minnesota State Retirement System

assumption F

8.34

8.35

service 
length

A

B

C

D

E

F

8.36 | 1 | 10.25% | 11.78% | 12% | 12.75% | 7.75% | 5.75%
8.37 | 2 | 7.85 | 8.65 | 9 | 10.75 | 7.25 | 5.6
8.38 | 3 | 6.65 | 7.21 | 8 | 8.75 | 6.75 | 5.45
8.39 | 4 | 5.95 | 6.33 | 7.5 | 7.75 | 6.5 | 5.3
8.40 | 5 | 5.45 | 5.72 | 7.25 | 6.25 | 6.25 | 5.15
8.41 | 6 | 5.05 | 5.27 | 7 | 5.85 | 6 | 5
8.42 | 7 | 4.75 | 4.91 | 6.85 | 5.55 | 5.75 | 4.85
8.43 | 8 | 4.45 | 4.62 | 6.7 | 5.35 | 5.6 | 4.7
9.1 | 9 | 4.25 | 4.38 | 6.55 | 5.15 | 5.45 | 4.55
9.2 | 10 | 4.15 | 4.17 | 6.4 | 5.05 | 5.3 | 4.4
9.3 | 11 | 3.95 | 3.99 | 6.25 | 4.95 | 5.15 | 4.3
9.4 | 12 | 3.85 | 3.83 | 6 | 4.85 | 5 | 4.2
9.5 | 13 | 3.75 | 3.69 | 5.75 | 4.75 | 4.85 | 4.1
9.6 | 14 | 3.55 | 3.57 | 5.5 | 4.65 | 4.7 | 4
9.7 | 15 | 3.45 | 3.45 | 5.25 | 4.55 | 4.55 | 3.9
9.8 | 16 | 3.35 | 3.35 | 5 | 4.55 | 4.4 | 3.8
9.9 | 17 | 3.25 | 3.26 | 4.75 | 4.55 | 4.25 | 3.7
9.10 | 18 | 3.25 | 3.25 | 4.5 | 4.55 | 4.1 | 3.6
9.11 | 19 | 3.25 | 3.25 | 4.25 | 4.55 | 3.95 | 3.5
9.12 | 20 | 3.25 | 3.25 | 4 | 4.55 | 3.8 | 3.5
9.13 | 21 | 3.25 | 3.25 | 3.9 | 4.45 | 3.75 | 3.5
9.14 | 22 | 3.25 | 3.25 | 3.8 | 4.35 | 3.75 | 3.5
9.15 | 23 | 3.25 | 3.25 | 3.7 | 4.25 | 3.75 | 3.5
9.16 | 24 | 3.25 | 3.25 | 3.6 | 4.25 | 3.75 | 3.5
9.17 | 25 | 3.25 | 3.25 | 3.5 | 4.25 | 3.75 | 3.5
9.18 | 26 | 3.25 | 3.25 | 3.5 | 4.25 | 3.75 | 3.5
9.19 | 27 | 3.25 | 3.25 | 3.5 | 4.25 | 3.75 | 3.5
9.20 | 28 | 3.25 | 3.25 | 3.5 | 4.25 | 3.75 | 3.5
9.21 | 29 | 3.25 | 3.25 | 3.5 | 4.25 | 3.75 | 3.5
9.22 | 30 or more | 3.25 | 3.25 | 3.5 | 4.25 | 3.75 | 3.5
9.23 	(d) The actuarial valuation must use the applicable following payroll growth 
9.24 	assumption for calculating the amortization requirement for the unfunded actuarial 
9.25 	accrued liability where the amortization retirement is calculated as a level percentage 
9.26 	of an increasing payroll:

9.27 | plan | payroll growth assumption
9.28

9.29

general state employees retirement plan of the 
Minnesota State Retirement System

3.5%

9.30 | correctional state employees retirement plan | 3.5
9.31 | State Patrol retirement plan | 3.5
9.32 | judges retirement plan | 2.75
9.33

9.34

general employees retirement plan of the Public 
Employees Retirement Association

3.5

9.35 | public employees police and fire retirement plan | 3.5
9.36 | local government correctional service retirement plan | 3.5
9.37 | teachers retirement plan | 3.75
9.38 | St. Paul teachers retirement plan | 4
9.39 	(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a 
9.40 	different salary assumption or a different payroll increase assumption:
9.41 	(1) has been proposed by the governing board of the applicable retirement plan;
10.1 	(2) is accompanied by the concurring recommendation of the actuary retained under 
10.2 	section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the 
10.3 	most recent actuarial valuation report if section 356.214 does not apply; and
10.4 	(3) has been approved or deemed approved under subdivision 18.

10.5 	EFFECTIVE DATE. This section is effective June 30, 2016.

10.6 	Sec. 8. Minnesota Statutes 2015 Supplement, section 356.215, subdivision 11, is 
10.7 	amended to read:
10.8 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating 
10.9 	the level normal cost, the actuarial valuation of the retirement plan must contain an 
10.10 	exhibit for financial reporting purposes indicating the additional annual contribution 
10.11 	sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 
10.12 	for contribution determination purposes indicating the additional contribution sufficient 
10.13 	to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 
10.14 	subdivision 8, paragraph (c), but excluding the legislators retirement plan, the additional 
10.15 	contribution must be calculated on a level percentage of covered payroll basis by the 
10.16 	established date for full funding in effect when the valuation is prepared, assuming annual 
10.17 	payroll growth at the applicable percentage rate set forth in subdivision 8, paragraph (d). 
10.18 	For all other retirement plans and for the legislators retirement plan, the additional annual 
10.19 	contribution must be calculated on a level annual dollar amount basis.
10.20 	(b) For any retirement plan other than a retirement plan governed by paragraph (d), 
10.21 	(e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions 
10.22 	used for calculating the actuarial accrued liability of the fund, a change in the benefit 
10.23 	plan governing annuities and benefits payable from the fund, a change in the actuarial 
10.24 	cost method used in calculating the actuarial accrued liability of all or a portion of the 
10.25 	fund, or a combination of the three, which change or changes by itself or by themselves 
10.26 	without inclusion of any other items of increase or decrease produce a net increase in the 
10.27 	unfunded actuarial accrued liability of the fund, the established date for full funding is the 
10.28 	first actuarial valuation date occurring after June 1, 2020.
10.29 	(c) For any retirement plan, if there has been a change in any or all of the actuarial 
10.30 	assumptions used for calculating the actuarial accrued liability of the fund, a change in 
10.31 	the benefit plan governing annuities and benefits payable from the fund, a change in the 
10.32 	actuarial cost method used in calculating the actuarial accrued liability of all or a portion 
10.33 	of the fund, or a combination of the three, and the change or changes, by itself or by 
10.34 	themselves and without inclusion of any other items of increase or decrease, produce a net 
11.1 	increase in the unfunded actuarial accrued liability in the fund, the established date for full 
11.2 	funding must be determined using the following procedure:
11.3 	(i) the unfunded actuarial accrued liability of the fund must be determined in 
11.4 	accordance with the plan provisions governing annuities and retirement benefits and the 
11.5 	actuarial assumptions in effect before an applicable change;
11.6 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
11.7 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
11.8 	(i) by the established date for full funding in effect before the change must be calculated 
11.9 	using the interest assumption specified in subdivision 8 in effect before the change;
11.10 	(iii) the unfunded actuarial accrued liability of the fund must be determined in 
11.11 	accordance with any new plan provisions governing annuities and benefits payable from 
11.12 	the fund and any new actuarial assumptions and the remaining plan provisions governing 
11.13 	annuities and benefits payable from the fund and actuarial assumptions in effect before 
11.14 	the change;
11.15 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
11.16 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
11.17 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
11.18 	under item (iii) over a period of 30 years from the end of the plan year in which the 
11.19 	applicable change is effective must be calculated using the applicable interest assumption 
11.20 	specified in subdivision 8 in effect after any applicable change;
11.21 	(v) the level annual dollar or level percentage amortization contribution under item 
11.22 	(iv) must be added to the level annual dollar amortization contribution or level percentage 
11.23 	calculated under item (ii);
11.24 	(vi) the period in which the unfunded actuarial accrued liability amount determined 
11.25 	in item (iii) is amortized by the total level annual dollar or level percentage amortization 
11.26 	contribution computed under item (v) must be calculated using the interest assumption 
11.27 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
11.28 	integral number of years, but not to exceed 30 years from the end of the plan year in which 
11.29 	the determination of the established date for full funding using the procedure set forth in this 
11.30 	clause is made and not to be less than the period of years beginning in the plan year in which 
11.31 	the determination of the established date for full funding using the procedure set forth in 
11.32 	this clause is made and ending by the date for full funding in effect before the change; and
11.33 	(vii) the period determined under item (vi) must be added to the date as of which 
11.34 	the actuarial valuation was prepared and the date obtained is the new established date 
11.35 	for full funding.
12.1 	(d) For the general employees retirement plan of the Public Employees Retirement 
12.2 	Association, the established date for full funding is June 30, 2031.
12.3 	(e) For the Teachers Retirement Association, the established date for full funding is 
12.4 	June 30, ~~2037~~ 2046.
12.5 	(f) For the correctional state employees retirement plan of the Minnesota State 
12.6 	Retirement System, the established date for full funding is June 30, 2038.
12.7 	(g) For the judges retirement plan, the established date for full funding is June 
12.8 	30, 2038.
12.9 	(h) For the public employees police and fire retirement plan, the established date 
12.10 	for full funding is June 30, 2038.
12.11 	(i) For the St. Paul Teachers Retirement Fund Association, the established date for 
12.12 	full funding is June 30, 2042. In addition to other requirements of this chapter, the annual 
12.13 	actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency 
12.14 	or sufficiency in annual contributions when comparing liabilities to the market value of 
12.15 	the assets of the fund as of the close of the most recent fiscal year.
12.16 	(j) For the general state employees retirement plan of the Minnesota State Retirement 
12.17 	System, the established date for full funding is June 30, 2040.
12.18 	(k) For the retirement plans for which the annual actuarial valuation indicates an 
12.19 	excess of valuation assets over the actuarial accrued liability, the valuation assets in 
12.20 	excess of the actuarial accrued liability must be recognized as a reduction in the current 
12.21 	contribution requirements by an amount equal to the amortization of the excess expressed 
12.22 	as a level percentage of pay over a 30-year period beginning anew with each annual 
12.23 	actuarial valuation of the plan.

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

12.25 	Sec. 9. Minnesota Statutes 2015 Supplement, section 356.415, subdivision 1a, is 
12.26 	amended to read:
12.27 		Subd. 1a.Annual postretirement adjustments; Minnesota State Retirement 
12.28 	System plans other than the State Patrol and judges retirement ~~plan~~ plans. (a) 
12.29 	Retirement annuity, disability benefit, or survivor benefit recipients of the legislators 
12.30 	retirement plan, including constitutional officers as specified in chapter 3A, the general 
12.31 	state employees retirement plan, the correctional state employees retirement plan, and 
12.32 	the unclassified state employees retirement program are entitled to a postretirement 
12.33 	adjustment annually on January 1, as follows:
12.34 	(1) ~~for each successive January 1, if the definition of funding stability under~~ 
12.35 	~~paragraph (b) has not been met as of the prior July 1 for or with respect to the applicable~~ 
13.1 	~~retirement plan,~~ a postretirement increase of ~~two~~1.75 percent must be applied each year, 
13.2 	effective on January 1, to the monthly annuity or benefit of each annuitant or benefit 
13.3 	recipient who has been receiving an annuity or a benefit for at least 12 full months as of 
13.4 	the June 30 of the calendar year immediately before the adjustment; and
13.5 	(2) ~~for each successive January 1, if the definition of funding stability under~~ 
13.6 	~~paragraph (b) has not been met as of the prior July 1 for or with respect to the applicable~~ 
13.7 	~~retirement plan,~~ for each annuitant or benefit recipient who has been receiving an annuity 
13.8 	or a benefit for at least one full month, but less than 12 full months as of the June 30 of the 
13.9 	calendar year immediately before the adjustment, an annual postretirement increase of 
13.10 	1/12 of ~~two~~1.75 percent for each month that the person has been receiving an annuity or 
13.11 	benefit must be applied.
13.12 	~~(b) Increases under this subdivision for the general state employees retirement~~ 
13.13 	~~plan or the correctional state employees retirement plan terminate on December 31 of~~ 
13.14 	~~the calendar year in which two prior consecutive actuarial valuations prepared by the~~ 
13.15 	~~approved actuary under sections 356.214 and 356.215 and the standards for actuarial work~~ 
13.16 	~~promulgated by the Legislative Commission on Pensions and Retirement indicate that the~~ 
13.17 	~~market value of assets of the retirement plan equals or exceeds 90 percent of the actuarial~~ 
13.18 	~~accrued liability of the retirement plan and increases under subdivision 1 recommence~~ 
13.19 	~~after that date. Increases under this subdivision for the legislators retirement plan~~ 
13.20 	~~established under chapter 3A, including the constitutional officers specified in that chapter,~~ 
13.21 	~~and for the unclassified state employees retirement program, terminate on December 31~~ 
13.22 	~~of the calendar year in which two prior consecutive actuarial valuations prepared by the~~ 
13.23 	~~approved actuary under sections 356.214 and 356.215 and the standards for actuarial work~~ 
13.24 	~~promulgated by the Legislative Commission on Pensions and Retirement indicate that the~~ 
13.25 	~~market value of assets of the general state employees retirement plan equals or exceeds~~ 
13.26 	~~90 percent of the actuarial accrued liability of the retirement plan and increases under~~ 
13.27 	~~subdivision 1 recommence after that date.~~
13.28 	~~(c) After having met the definition of funding stability under paragraph (b), the~~ 
13.29 	~~increase provided in paragraph (a), clauses (1) and (2), rather than an increase under~~ 
13.30 	~~subdivision 1, for the general state employees retirement plan or the correctional state~~ 
13.31 	~~employees retirement plan, is again to be applied in a subsequent year or years if the~~ 
13.32 	~~market value of assets of the applicable plan equals or is less than:~~
13.33 	~~(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two~~ 
13.34 	~~consecutive actuarial valuations; or~~
13.35 	~~(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most~~ 
13.36 	~~recent actuarial valuation.~~
14.1 	~~(d) After having met the definition of funding stability under paragraph (b), the~~ 
14.2 	~~increase provided in paragraph (a), clauses (1) and (2), rather than an increase under~~ 
14.3 	~~subdivision 1, for the legislators retirement plan, including the constitutional officers,~~ 
14.4 	~~and for the unclassified state employees retirement program, is again to be applied in a~~ 
14.5 	~~subsequent year or years if the market value of assets of the general state employees~~ 
14.6 	~~retirement plan equals or is less than:~~
14.7 	~~(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two~~ 
14.8 	~~consecutive actuarial valuations; or~~
14.9 	~~(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most~~ 
14.10 	~~recent actuarial valuation.~~
14.11 	~~(e)~~(b) An increase in annuity or benefit payments under this subdivision must be 
14.12 	made automatically unless written notice is filed by the annuitant or benefit recipient 
14.13 	with the executive director of the applicable covered retirement plan requesting that the 
14.14 	increase not be made.

14.15 	EFFECTIVE DATE. This section is effective June 30, 2016.

14.16 	Sec. 10. Minnesota Statutes 2015 Supplement, section 356.415, subdivision 1d, 
14.17 	is amended to read:
14.18 		Subd. 1d.Teachers Retirement Association annual postretirement adjustments.
 14.19 	(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers 
14.20 	Retirement Association are entitled to a postretirement adjustment annually on January 
14.21 	1, as follows:
14.22 	(1) ~~for each January 1 until funding stability is restored,~~effective January 1, 2017, 
14.23 	through December 31, 2021, a postretirement increase of ~~two~~one percent must be applied 
14.24 	each year~~, effective on January 1,~~ to the monthly annuity or benefit amount of each 
14.25 	annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12 
14.26 	full months as of the June 30 of the calendar year immediately before the adjustment;
14.27 	(2) ~~for each January 1 until funding stability is restored~~ effective January 1, 2017, 
14.28 	through December 31, 2021, for each annuitant or benefit recipient who has been receiving 
14.29 	an annuity or a benefit for at least one full month, but less than 12 full months as of the 
14.30 	June 30 of the calendar year immediately before the adjustment, an annual postretirement 
14.31 	increase of 1/12 of ~~two~~one percent for each month the person has been receiving an 
14.32 	annuity or benefit must be applied;
14.33 	(3) ~~for each January 1 following the restoration of funding stability~~ effective January 
14.34 	1, 2022, and thereafter, a postretirement increase of ~~2.5~~1.75 percent must be applied each 
14.35 	year~~, effective January 1,~~ to the monthly annuity or benefit amount of each annuitant 
15.1 	or benefit recipient who has been receiving an annuity or a benefit for at least 12 full 
15.2 	months as of the June 30 of the calendar year immediately before the adjustment. For each 
15.3 	annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 
15.4 	one full month, but less than 12 full months as of June 30 of the calendar year immediately 
15.5 	before the adjustment, an annual postretirement increase of 1/12 of 1.75 percent for each 
15.6 	month the person has been receiving an annuity or benefit must be applied; and
15.7 	(4) ~~for each January 1 following the restoration of funding stability~~ effective January 
15.8 	1, 2022, and thereafter, for each annuitant or benefit recipient who has been receiving an 
15.9 	annuity or a benefit for at least one full month, but less than 12 full months as of the June 
15.10 	30 of the calendar year immediately before the adjustment, an annual postretirement 
15.11 	increase of 1/12 of ~~2.5~~1.75 percent for each month the person has been receiving an 
15.12 	annuity or benefit must be applied.
15.13 	~~(b) Funding stability is restored when the market value of assets of the Teachers~~ 
15.14 	~~Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities~~ 
15.15 	~~of the Teachers Retirement Association in the two most recent prior actuarial valuations~~ 
15.16 	~~prepared under section 356.215 and the standards for actuarial work by the approved~~ 
15.17 	~~actuary retained by the Teachers Retirement Association under section 356.214.~~
15.18 	~~(c) After having met the definition of funding stability under paragraph (b), the~~ 
15.19 	~~increase provided in paragraph (a), clauses (1) and (2), rather than an increase under~~ 
15.20 	~~subdivision 1, or the increase under paragraph (a), clauses (3) and (4), is again to be applied~~ 
15.21 	~~in a subsequent year or years if the market value of assets of the plan equals or is less than:~~
15.22 	~~(1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive~~ 
15.23 	~~actuarial valuations; or~~
15.24 	~~(2) 80 percent of the actuarial accrued liabilities of the plan for the most recent~~ 
15.25 	~~actuarial valuation.~~
15.26 	~~(d)~~(b) An increase in annuity or benefit payments under this section must be made 
15.27 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
15.28 	executive director of the Teachers Retirement Association requesting that the increase 
15.29 	not be made.
15.30 	~~(e)~~(c) The retirement annuity payable to a person who retires before becoming 
15.31 	eligible for Social Security benefits and who has elected the optional payment as provided 
15.32 	in section 354.35 must be treated as the sum of a period-certain retirement annuity 
15.33 	and a life retirement annuity for the purposes of any postretirement adjustment. The 
15.34 	period-certain retirement annuity plus the life retirement annuity must be the annuity 
15.35 	amount payable until age 62, 65, or normal retirement age, as selected by the member 
15.36 	at retirement, for an annuity amount payable under section 354.35. A postretirement 
16.1 	adjustment granted on the period-certain retirement annuity must terminate when the 
16.2 	period-certain retirement annuity terminates.

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

16.4 	Sec. 11. Minnesota Statutes 2015 Supplement, section 356.415, subdivision 1e, 
16.5 	is amended to read:
16.6 		Subd. 1e.Annual postretirement adjustments; State Patrol retirement plan.
 16.7 	(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol 
16.8 	retirement plan are entitled to a postretirement adjustment annually on January 1 if the 
16.9 	definition of funding stability under paragraph (b) has not been met, as follows:
16.10 	(1) a postretirement increase of one percent must be applied each year, effective on 
16.11 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
16.12 	has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of 
16.13 	the calendar year immediately before the adjustment; and
16.14 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
16.15 	a benefit for at least one full month, but less than 12 full months as of the June 30 of 
16.16 	the calendar year immediately before the adjustment, an annual postretirement increase 
16.17 	of 1/12 of one percent for each month that the person has been receiving an annuity or 
16.18 	benefit must be applied.
16.19 	(b) Increases under paragraph (a) for the State Patrol retirement plan terminate on 
16.20 	December 31 of the calendar year in which two prior consecutive actuarial valuations for 
16.21 	the plan prepared by the approved actuary under sections 356.214 and 356.215 and the 
16.22 	standards for actuarial work promulgated by the Legislative Commission on Pensions 
16.23 	and Retirement indicates that the market value of assets of the retirement plan equals or 
16.24 	exceeds 85 percent of the actuarial accrued liability of the retirement plan. Thereafter, 
16.25 	increases under paragraph (a) become effective again on the December 31 of the calendar 
16.26 	year in which the actuarial valuation, or prior consecutive actuarial valuations for the 
16.27 	plan prepared by the approved actuary under sections 356.214 and 356.215 and the 
16.28 	standards for actuarial work promulgated by the Legislative Commission on Pensions and 
16.29 	Retirement indicates that the market value of the assets of the retirement plan equals or is 
16.30 	less than 80 percent of the actuarial accrued liability of the retirement plan for two years, 
16.31 	or equals or is less than 75 percent of the actuarial accrued liability of the retirement plan 
16.32 	for one year and increases under paragraph (c) commence after that date.
16.33 	(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State 
16.34 	Patrol retirement plan are entitled to a postretirement adjustment annually on January 1 if 
16.35 	the definition of funding stability under paragraph (b) has been met, as follows:
17.1 	(1) a postretirement increase of 1.5 percent must be applied each year, effective on 
17.2 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
17.3 	has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of 
17.4 	the calendar year immediately before the adjustment; and
17.5 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
17.6 	a benefit for at least one full month, but less than 12 full months as of the June 30 of 
17.7 	the calendar year immediately before the adjustment, an annual postretirement increase 
17.8 	of 1/12 of 1.5 percent for each month that the person has been receiving an annuity or 
17.9 	benefit must be applied.
17.10 	(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on 
17.11 	December 31 of the calendar year in which two prior consecutive actuarial valuations 
17.12 	prepared by the approved actuary under sections 356.214 and 356.215 and the standards 
17.13 	for actuarial work adopted by the Legislative Commission on Pensions and Retirement 
17.14 	indicates that the market value of assets of the retirement plan equals or exceeds 90 percent 
17.15 	of the actuarial accrued liability of the retirement plan and increases under ~~subdivision~~ 
17.16 	~~1 recommence~~paragraph (e) commence after that date.
17.17 	(e) Retirement annuity, disability benefit, or survivor benefit recipients of the State 
17.18 	Patrol retirement plan are entitled to a postretirement adjustment annually on January 1 if 
17.19 	the definition of funding stability under paragraph (d) has been met, as follows:
17.20 	(1) a postretirement increase of 2.5 percent must be applied each year, effective on 
17.21 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
17.22 	has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of 
17.23 	the calendar year immediately before the adjustment; and
17.24 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
17.25 	a benefit for at least one full month, but less than 12 full months as of the June 30 of 
17.26 	the calendar year immediately before the adjustment, an annual postretirement increase 
17.27 	of 1/12 of 2.5 percent for each month that the person has been receiving an annuity or 
17.28 	benefit must be applied.
17.29 	~~(e)~~(f) An increase in annuity or benefit payments under this subdivision must be 
17.30 	made automatically unless written notice is filed by the annuitant or benefit recipient 
17.31 	with the executive director of the applicable covered retirement plan requesting that the 
17.32 	increase not be made.

17.33 	EFFECTIVE DATE. This section is effective June 30, 2016.

17.34 	Sec. 12. Minnesota Statutes 2015 Supplement, section 356.415, subdivision 1f, is 
17.35 	amended to read:
18.1 		Subd. 1f.Annual postretirement adjustments; Minnesota State Retirement 
18.2 	System judges retirement plan. ~~(a) The increases provided under this subdivision are in~~ 
18.3 	~~lieu of increases under subdivision 1 or 1a for retirement annuity, disability benefit, or~~ 
18.4 	~~survivor benefit recipients of the judges retirement plan.~~
18.5 	~~(b)~~(a) Retirement annuity, disability benefit, or survivor benefit recipients of the 
18.6 	judges retirement plan are entitled to a postretirement adjustment annually on January 1 if 
18.7 	the definition of funding stability under paragraph (b) has not been met, as follows:
18.8 	(1) a postretirement increase of 1.75 percent must be applied each year, effective on 
18.9 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
18.10 	has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of 
18.11 	the calendar year immediately before the adjustment; and
18.12 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
18.13 	benefit for at least one full month, but less than 12 full months as of the June 30 of the 
18.14 	calendar year immediately before the adjustment, an annual postretirement increase of 
18.15 	1/12 of 1.75 percent for each month that the person has been receiving an annuity or 
18.16 	benefit must be applied.
18.17 	~~(c)~~(b) Increases under ~~this subdivision~~paragraph (a) terminate on December 31 
18.18 	of the calendar year in which two prior consecutive actuarial valuations prepared by the 
18.19 	approved actuary under sections 356.214 and 356.215 and the standards for actuarial work 
18.20 	promulgated by the Legislative Commission on Pensions and Retirement indicates that 
18.21 	the market value of assets of the judges retirement plan equals or exceeds 70 percent of 
18.22 	the actuarial accrued liability of the retirement plan~~.~~ and increases under ~~subdivision~~ 
18.23 	~~1 or 1a, whichever is applicable, begin on the January 1 next following~~paragraph (c) 
18.24 	commence after that date.
18.25 	(c) Retirement annuity, disability benefit, or survivor benefit recipients of the judges 
18.26 	retirement plan are entitled to a postretirement adjustment annually on January 1 if the 
18.27 	definition of funding stability under paragraph (d) has not been met, as follows:
18.28 	(1) a postretirement increase of two percent must be applied each year, effective on 
18.29 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
18.30 	has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of 
18.31 	the calendar year immediately before the adjustment; and
18.32 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
18.33 	benefit for at least one full month, but less than 12 full months as of the June 30 of the 
18.34 	calendar year immediately before the adjustment, an annual postretirement increase of 
18.35 	1/12 of two percent for each month that the person has been receiving an annuity or 
18.36 	benefit must be applied.
19.1 	(d) Increases under paragraph (c) terminate on December 31 of the calendar year 
19.2 	in which two prior consecutive actuarial valuations prepared by the approved actuary 
19.3 	under sections 356.214 and 356.215 and the standards for actuarial work adopted by the 
19.4 	Legislative Commission on Pensions and Retirement indicates that the market value of 
19.5 	assets of the judges retirement plan equals or exceeds 90 percent of the actuarial accrued 
19.6 	liability of the retirement plan and increases under paragraph (e) commence after that date.
19.7 	(e) Retirement annuity, disability benefit, or survivor benefit recipients of the judges 
19.8 	retirement plan are entitled to a postretirement adjustment annually on January 1 if the 
19.9 	definition of funding stability under paragraph (d) has been met, as follows:
19.10 	(1) a postretirement increase of 2.5 percent must be applied each year, effective on 
19.11 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
19.12 	has been receiving an annuity or a benefit for at least 12 full months as of the June 30 of 
19.13 	the calendar year immediately before the adjustment; and
19.14 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
19.15 	a benefit for at least one full month, but less than 12 full months as of the June 30 of 
19.16 	the calendar year immediately before the adjustment, an annual postretirement increase 
19.17 	of 1/12 of 2.5 percent for each month that the person has been receiving an annuity or 
19.18 	benefit must be applied.
19.19 	~~(d)~~(f) An increase in annuity or benefit payments under this subdivision must be 
19.20 	made automatically unless written notice is filed by the annuitant or benefit recipient 
19.21 	with the executive director of the applicable covered retirement plan requesting that the 
19.22 	increase not be made.

19.23 	EFFECTIVE DATE. This section is effective June 30, 2016.

19.24 	Sec. 13.  REPEALER.
 19.25 	(a) Minnesota Statutes 2015 Supplement, section 356.415, subdivision 1, is repealed.
19.26 	(b) Minnesota Statutes 2015 Supplement, section 354A.29, subdivisions 8 and 
19.27 	9, are repealed.

19.28 	EFFECTIVE DATE. Paragraph (a) is effective June 30, 2016. Paragraph (b) is 
19.29 	effective July 1, 2016.