1.1 	A bill for an act
1.2 	relating to retirement; modifying various public pension plan provisions; 
1.3 	providing for uniformity in various administrative provisions; modifying 
1.4 	definitions;amending Minnesota Statutes 2008, sections 3A.02, subdivision 3, 
1.5 	by adding a subdivision; 3A.03, by adding a subdivision; 3A.04, by adding a 
1.6 	subdivision; 3A.115; 11A.08, subdivision 1; 11A.23, subdivisions 1, 2; 352.04, 
1.7 	subdivisions 1, 12; 352.061; 352.113, by adding a subdivision; 352.115, by 
1.8 	adding a subdivision; 352.12, by adding a subdivision; 352.75, subdivisions 3, 
1.9 	4; 352.911, subdivisions 3, 5; 352.93, by adding a subdivision; 352.931, by 
1.10 	adding a subdivision; 352.95, by adding a subdivision; 352B.02, subdivision 1d; 
1.11 	352B.08, by adding a subdivision; 352B.10, by adding a subdivision; 352B.11, 
1.12 	by adding a subdivision; 352C.10; 352D.06, subdivision 1; 352D.065, by adding 
1.13 	a subdivision; 352D.075, by adding a subdivision; 353.06; 353.27, subdivision 
1.14 	1; 353.29, by adding a subdivision; 353.31, subdivision 1b, by adding a 
1.15 	subdivision; 353.33, subdivisions 3b, 7, by adding a subdivision; 353.651, by 
1.16 	adding a subdivision; 353.656, subdivision 5a, by adding a subdivision; 353.657, 
1.17 	subdivision 3a, by adding a subdivision; 353.665, subdivision 3; 353A.02, 
1.18 	subdivisions 14, 23; 353A.05, subdivisions 1, 2; 353A.08, subdivisions 1, 3; 
1.19 	353A.081, subdivision 2; 353A.09, subdivision 1; 353A.10, subdivisions 2, 
1.20 	3; 353E.01, subdivisions 3, 5; 353E.04, by adding a subdivision; 353E.06, by 
1.21 	adding a subdivision; 353E.07, by adding a subdivision; 354.07, subdivision 4; 
1.22 	354.33, subdivision 5; 354.35, by adding a subdivision; 354.42, subdivision 1a; 
1.23 	354.44, by adding a subdivision; 354.46, by adding a subdivision; 354.48, by 
1.24 	adding a subdivision; 354.55, subdivision 13; 354.70, subdivisions 5, 6; 356.215, 
1.25 	subdivisions 1, 11; 356.351, subdivision 2; 490.123, subdivisions 1, 3; 490.124, 
1.26 	by adding a subdivision; proposing coding for new law in Minnesota Statutes, 
1.27 	chapter 356; repealing Minnesota Statutes 2008, sections 11A.041; 11A.18; 
1.28 	11A.181; 352.119, subdivisions 2, 3, 4; 352B.26, subdivisions 1, 3; 353.271; 
1.29 	353A.02, subdivision 20; 353A.09, subdivisions 2, 3; 354.05, subdivision 26; 
1.30 	354.55, subdivision 14; 354.63; 356.41; 356.431, subdivision 2; 422A.01, 
1.31 	subdivision 13; 422A.06, subdivision 4; 490.123, subdivisions 1c, 1e.
1.32 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.33 	Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 3, is amended to read:
1.34 		Subd. 3.Appropriation.  The amounts required for payment of retirement 
1.35 	allowances provided by this section are appropriated annually to the director from the 
2.1 	participation of the legislators retirement plan in the Minnesota postretirement investment
2.2 	fund or from the general fund as provided in section 3A.115. The retirement allowance 
2.3 	must be paid monthly to the recipients entitled to those retirement allowances.

2.4 	Sec. 2. Minnesota Statutes 2008, section 3A.02, is amended by adding a subdivision to 
2.5 	read:
2.6 		Subd. 6.Postretirement adjustment eligibility. A retirement allowance under this 
2.7 	section is eligible for postretirement adjustments under section 356.415.

2.8 	Sec. 3. Minnesota Statutes 2008, section 3A.03, is amended by adding a subdivision to 
2.9 	read:
2.10 		Subd. 3.Legislators retirement fund. (a) The legislators retirement fund, a special 
2.11 	retirement fund, is created within the state treasury and must be credited with assets equal 
2.12 	to the participation of the legislators retirement plan in the Minnesota postretirement 
2.13 	investment fund as of June 30, 2009, and any investment proceeds on those assets.
2.14 	(b) The payment of annuities under section 3A.115, paragraph (b), is appropriated 
2.15 	from the legislators retirement fund.

2.16 	Sec. 4. Minnesota Statutes 2008, section 3A.04, is amended by adding a subdivision to 
2.17 	read:
2.18 		Subd. 2a.Postretirement adjustment eligibility. A survivor benefit under this 
2.19 	section is eligible for postretirement adjustments under section 356.415.

2.20 	Sec. 5. Minnesota Statutes 2008, section 3A.115, is amended to read:
2.21 	3A.115 RETIREMENT ALLOWANCE APPROPRIATION; 
2.22 	POSTRETIREMENT ADJUSTMENT.
2.23 	(a) The amount necessary to fund the retirement allowance granted under this 
2.24 	chapter to a former legislator upon retirementretiring after June 30, 2003, is appropriated 
2.25 	from the general fund to the director to pay pension obligations due to the retiree.
2.26 	(b) The amount necessary to fund the retirement allowance granted under this 
2.27 	chapter to a former legislator retiring before July 1, 2003, must be paid from the legislators 
2.28 	retirement fund created under section 3A.03, subdivision 3, until the assets of the fund 
2.29 	are exhausted and at that time, the amount necessary to fund the retirement allowances 
2.30 	under this paragraph is appropriated from the general fund to the director to pay pension 
2.31 	obligations to the retiree.
3.1 	(c) Retirement allowances payable to retired legislators and their survivors under 
3.2 	this chapter must be adjusted in the same manner, at the same times, and in the same 
3.3 	amounts as are benefits payable from the Minnesota postretirement investment fund to 
3.4 	retirees of a participating public pension fund as provided in sections 3A.02, subdivision 
3.5 	6, and 356.415.

3.6 	Sec. 6. Minnesota Statutes 2008, section 11A.08, subdivision 1, is amended to read:
3.7 		Subdivision 1.Membership. There is created an Investment Advisory Council 
3.8 	consisting of 17 members. Ten of these members shallmust be experienced in general 
3.9 	investment matters. They shall be appointed by the state board The state board must 
3.10 	appoint the ten members. The other seven members shall be are: the commissioner of 
3.11 	finance; the executive director of the Minnesota State Retirement System; the executive 
3.12 	director of the Public Employees Retirement Association; the executive director of 
3.13 	the Teachers Retirement Association; a retiree currently receiving benefits from the 
3.14 	postretirement investment fund a statewide retirement plan; and two public employees 
3.15 	who are active members of funds whose assets are invested by the state board. The 
3.16 	governor must appoint the retiree and the public employees shall be appointed by the 
3.17 	governor for four-year terms.

3.18 	Sec. 7. Minnesota Statutes 2008, section 11A.23, subdivision 1, is amended to read:
3.19 		Subdivision 1.Certification of assets not needed for immediate use. Each 
3.20 	executive director administering a retirement fund or plan enumerated in subdivision 4 
3.21 	shall, from time to time, certify to the state board for investment those portions of the 
3.22 	assets of the retirement fund or plan which in the judgment of the executive director are 
3.23 	not required for immediate use. Assets of the fund or plan required for participation in 
3.24 	the Minnesota postretirement adjustment fund, the combined investment fund, or the 
3.25 	supplemental investment fund shall be transferred to those funds as provided by sections 
3.26 	11A.01 to 11A.25.

3.27 	Sec. 8. Minnesota Statutes 2008, section 11A.23, subdivision 2, is amended to read:
3.28 		Subd. 2.Investment. Retirement fund assets certified to the state board pursuant 
3.29 	to subdivision 1 shall be invested by the state board subject to the provisions of section 
3.30 	11A.24. Retirement fund assets transferred to the Minnesota postretirement investment 
3.31 	fund, the combined investment fund or the supplemental investment fund shall be invested 
3.32 	by the state board as part of those funds.  

4.1 	Sec. 9. Minnesota Statutes 2008, section 352.04, subdivision 1, is amended to read:
4.2 		Subdivision 1.Fund created. (a) There is created a special fund to be known as the 
4.3 	general state employees retirement fund. In that fund, employee contributions, employer 
4.4 	contributions, and other amounts authorized by law must be deposited.
4.5 	(b) The general state employees retirement plan of the Minnesota State Retirement 
4.6 	System must participate in the Minnesota postretirement investment fund. The amounts 
4.7 	provided in section 352.119 must be deposited in the Minnesota postretirement investment 
4.8 	fund.

4.9 	Sec. 10. Minnesota Statutes 2008, section 352.04, subdivision 12, is amended to read:
4.10 		Subd. 12.Fund disbursement restricted. The general state employees retirement 
4.11 	fund and the participation in the Minnesota postretirement investment fund must be 
4.12 	disbursed only for the purposes provided by law. The expenses of the system and any 
4.13 	benefits provided by law, other than benefits payable from the Minnesota postretirement 
4.14 	investment fund, must be paid from the general state employees retirement fund. The 
4.15 	retirement allowances, retirement annuities, and disability benefits, as well as refunds of 
4.16 	any sum remaining to the credit of a deceased retired employee or a disabled employee 
4.17 	must be paid only from the general state employees retirement fund after the needs 
4.18 	have been certified and the amounts withdrawn from the participation in the Minnesota 
4.19 	postretirement investment fund under section 11A.18. The amounts necessary to make the 
4.20 	payments from the general state employees retirement fund and the participation in the 
4.21 	Minnesota postretirement investment fund are annually appropriated from these funds
4.22 	that fund for those purposes.

4.23 	Sec. 11. Minnesota Statutes 2008, section 352.061, is amended to read:
4.24 	352.061 INVESTMENT BOARD TO INVEST FUNDS.
4.25 	The director shall, from time to time, certify to the State Board of Investment any 
4.26 	portions of the state employees retirement fund that in the judgment of the director are 
4.27 	not required for immediate use. Assets from the state employees retirement fund must 
4.28 	be transferred to the Minnesota postretirement investment fund as provided in section 
4.29 	11A.18. The State Board of Investment shall invest and reinvest sums so transferred, or
4.30 	certified, in securities that are duly authorized legal investments under section 11A.24.  

4.31 	Sec. 12. Minnesota Statutes 2008, section 352.113, is amended by adding a subdivision 
4.32 	to read:
5.1 		Subd. 13.Postretirement adjustment eligibility. A disability benefit under this 
5.2 	section is eligible for postretirement adjustments under section 356.415.

5.3 	Sec. 13. Minnesota Statutes 2008, section 352.115, is amended by adding a subdivision 
5.4 	to read:
5.5 		Subd. 14.Postretirement adjustment eligibility. A retirement annuity under 
5.6 	this section and section 352.116 is eligible for postretirement adjustments under section 
5.7 	356.415.

5.8 	Sec. 14. Minnesota Statutes 2008, section 352.12, is amended by adding a subdivision 
5.9 	to read:
5.10 		Subd. 2c.Postretirement adjustment eligibility. A survivor benefit under 
5.11 	subdivision 2, 2a, or 2b is eligible for postretirement adjustments under section 356.415.

5.12 	Sec. 15. Minnesota Statutes 2008, section 352.75, subdivision 3, is amended to read:
5.13 		Subd. 3.Existing retired members and benefit recipients. As of July 1, 1978, 
5.14 	the liability for all retirement annuities, disability benefits, survivorship annuities, and 
5.15 	survivor of deceased active employee benefits paid or payable by the former Metropolitan 
5.16 	Transit Commission-Transit Operating Division employees retirement fund is transferred 
5.17 	to the Minnesota State Retirement System, and is no longer the liability of the former 
5.18 	Metropolitan Transit Commission-Transit Operating Division employees retirement 
5.19 	fund. The required reserves for retirement annuities, disability benefits, and optional 
5.20 	joint and survivor annuities in effect on June 30, 1978, and the required reserves for the 
5.21 	increase in annuities and benefits provided under subdivision 6 must be determined using 
5.22 	a five percent interest assumption and the applicable Minnesota State Retirement System 
5.23 	mortality table and shall be transferred by the Minnesota State Retirement System to 
5.24 	the Minnesota postretirement investment fund on July 1, 1978, but shall be considered 
5.25 	transferred as of June 30, 1978. The annuity or benefit amount in effect on July 1, 1978, 
5.26 	including the increase granted under subdivision 6, must be used for adjustments made 
5.27 	under section 11A.18. For persons receiving benefits as survivors of deceased former 
5.28 	retirement annuitants, the benefits must be considered as having commenced on the date 
5.29 	on which the retirement annuitant began receiving the retirement annuity.  

5.30 	Sec. 16. Minnesota Statutes 2008, section 352.75, subdivision 4, is amended to read:
5.31 		Subd. 4.Existing deferred retirees. Any former member of the former 
5.32 	Metropolitan Transit Commission-Transit Operating Division employees retirement 
6.1 	fund is entitled to a retirement annuity from the Minnesota State Retirement System if 
6.2 	the employee:
6.3 	(1) is not an active employee of the Transit Operating Division of the former 
6.4 	Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active 
6.5 	continuous service with the Transit Operating Division of the former Metropolitan 
6.6 	Transit Commission as defined by the former Metropolitan Transit Commission-Transit 
6.7 	Operating Division employees retirement plan document in effect on December 31, 1977; 
6.8 	(3) has not received a refund of contributions; (4) has not retired or begun receiving an 
6.9 	annuity or benefit from the former Metropolitan Transit Commission-Transit Operating 
6.10 	Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid 
6.11 	application for a retirement annuity to the executive director of the Minnesota State 
6.12 	Retirement System.
6.13 	The person is entitled to a retirement annuity in an amount equal to the normal 
6.14 	old age retirement allowance calculated under the former Metropolitan Transit 
6.15 	Commission-Transit Operating Division employees retirement fund plan document in 
6.16 	effect on December 31, 1977, subject to an early retirement reduction or adjustment in 
6.17 	amount on account of retirement before the normal retirement age specified in that former 
6.18 	Metropolitan Transit Commission-Transit Operating Division employees retirement fund 
6.19 	plan document.
6.20 	The deferred retirement annuity of any person to whom this subdivision applies 
6.21 	must be augmented. The required reserves applicable to the deferred retirement annuity, 
6.22 	determined as of the date the allowance begins to accrue using an appropriate mortality 
6.23 	table and an interest assumption of five percent, must be augmented by interest at the rate 
6.24 	of five percent per year compounded annually from January 1, 1978, to January 1, 1981, 
6.25 	and three percent per year compounded annually from January 1, 1981, to the first day 
6.26 	of the month in which the annuity begins to accrue. UponAfter the commencement of 
6.27 	the retirement annuity, the required reserves for the annuity must be transferred to the 
6.28 	Minnesota postretirement investment fund in accordance with subdivision 2 and section 
6.29 	352.119 is entitled to postretirement adjustments under section 356.415. On applying for 
6.30 	a retirement annuity under this subdivision, the person is entitled to elect a joint and 
6.31 	survivor optional annuity under section 352.116, subdivision 3.  

6.32 	Sec. 17. Minnesota Statutes 2008, section 352.911, subdivision 3, is amended to read:
6.33 		Subd. 3.Investment. The correctional employees retirement fund shall participate 
6.34 	in the Minnesota postretirement investment fund and in that fund there shall be deposited 
6.35 	the amounts provided in section 352.119. The balance of any assets of the fund shall
7.1 	must be deposited in the Minnesota combined investment funds as provided in section 
7.2 	11A.14, if applicable, or otherwise under section 11A.23.  

7.3 	Sec. 18. Minnesota Statutes 2008, section 352.911, subdivision 5, is amended to read:
7.4 		Subd. 5.Fund disbursement restricted. The correctional employees retirement 
7.5 	fund and its share of participation in the Minnesota postretirement investment fund shall
7.6 	must be disbursed only for the purposes provided for in the applicable provisions in this 
7.7 	chapter. The proportional share of the expenses of the system and any benefits provided 
7.8 	in sections section352.90to 352.951, other than benefits payable from the Minnesota 
7.9 	postretirement investment fund, shallmust be paid from the correctional employees 
7.10 	retirement fund. The retirement allowances, retirement annuities, the disability benefits, 
7.11 	the survivorship benefits, and any refunds of accumulated deductions shall be paid only
7.12 	from the correctional employees retirement fund after those needs have been certified by 
7.13 	the executive director and the amounts withdrawn from the share of participation in the 
7.14 	Minnesota postretirement fund under section 11A.18. The amounts necessary to make the 
7.15 	payments from the correctional employees retirement fund and the participation in the 
7.16 	Minnesota postretirement investment fund are annually appropriated from those funds
7.17 	that fund for those purposes.  

7.18 	Sec. 19. Minnesota Statutes 2008, section 352.93, is amended by adding a subdivision 
7.19 	to read:
7.20 		Subd. 7.Postretirement adjustment eligibility. A retirement annuity under this 
7.21 	section is eligible for postretirement adjustments under section 356.415.

7.22 	Sec. 20. Minnesota Statutes 2008, section 352.931, is amended by adding a subdivision 
7.23 	to read:
7.24 		Subd. 6.Postretirement adjustment eligibility. A survivor benefit under this 
7.25 	section is eligible for postretirement adjustments under section 356.415.

7.26 	Sec. 21. Minnesota Statutes 2008, section 352.95, is amended by adding a subdivision 
7.27 	to read:
7.28 		Subd. 8.Postretirement adjustment eligibility. A disability benefit under this 
7.29 	section is eligible for postretirement adjustments under section 356.415.

7.30 	Sec. 22. Minnesota Statutes 2008, section 352B.02, subdivision 1d, is amended to read:
8.1 		Subd. 1d.Fund revenue and expenses. The amounts provided for in this section 
8.2 	must be credited to the State Patrol retirement fund. All money received must be deposited 
8.3 	by the commissioner of finance in the State Patrol retirement fund. The fund must be used 
8.4 	to pay the administrative expenses of the retirement fund, and the benefits and annuities 
8.5 	provided in this chapter. Appropriate amounts shall be transferred to or withdrawn from 
8.6 	the Minnesota postretirement investment fund as provided in section 352B.26.

8.7 	Sec. 23. Minnesota Statutes 2008, section 352B.08, is amended by adding a 
8.8 	subdivision to read:
8.9 		Subd. 4.Postretirement adjustment eligibility. A retirement annuity under this 
8.10 	section is eligible for postretirement adjustments under section 356.415.

8.11 	Sec. 24. Minnesota Statutes 2008, section 352B.10, is amended by adding a 
8.12 	subdivision to read:
8.13 		Subd. 6.Postretirement adjustment eligibility. A disability benefit under this 
8.14 	section is eligible for postretirement adjustments under section 356.415.

8.15 	Sec. 25. Minnesota Statutes 2008, section 352B.11, is amended by adding a subdivision 
8.16 	to read:
8.17 		Subd. 2e.Postretirement adjustment eligibility. A survivor benefit under 
8.18 	subdivision 2, 2b, or 2c is eligible for postretirement adjustments under section 356.415.

8.19 	Sec. 26. Minnesota Statutes 2008, section 352C.10, is amended to read:
8.20 	352C.10 BENEFIT ADJUSTMENTS.
8.21 	Retirement allowances payable to retired constitutional officers and surviving spouse 
8.22 	benefits payable must be adjusted in the same manner, at the same times and in the same 
8.23 	amounts as are benefits payable from the Minnesota postretirement investment fund to 
8.24 	retirees of a participating public pension fund under section 356.451.

8.25 	Sec. 27. Minnesota Statutes 2008, section 352D.06, subdivision 1, is amended to read:
8.26 		Subdivision 1.Annuity; reserves. When a participant attains at least age 55, 
8.27 	terminates from covered service, and applies for a retirement annuity, the cash value of the 
8.28 	participant's shares shallmust be transferred to the Minnesota postretirement investment
8.29 	general state employees retirement fund and must be used to provide an annuity for the 
8.30 	retired employee based upon the participant's age when the benefit begins to accrue 
8.31 	according to the reserve basis used by the general state employees retirement plan in 
9.1 	determining pensions and reserves. The annuity under this subdivision is eligible for 
9.2 	postretirement adjustments under section 356.415.

9.3 	Sec. 28. Minnesota Statutes 2008, section 352D.065, is amended by adding a 
9.4 	subdivision to read:
9.5 		Subd. 3a.Postretirement adjustment eligibility. A disability benefit under this 
9.6 	section is eligible for postretirement adjustments under section 356.415.

9.7 	Sec. 29. Minnesota Statutes 2008, section 352D.075, is amended by adding a 
9.8 	subdivision to read:
9.9 		Subd. 2b.Postretirement adjustment eligibility. A survivor benefit under this 
9.10 	section is eligible for postretirement adjustments under section 356.415.

9.11 	Sec. 30. Minnesota Statutes 2008, section 353.06, is amended to read:
9.12 	353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
9.13 	The executive director shall from time to time certify to the State Board of 
9.14 	Investment for investment such portions of the retirement fund as in its judgment may not 
9.15 	be required for immediate use. Assets from the public employees retirement fund shall 
9.16 	be transferred to the Minnesota postretirement investment fund as provided in section 
9.17 	11A.18. The State Board of Investment shall thereupon invest and reinvest the sum so 
9.18 	certified, or transferred, in such securities as are duly authorized as legal investments for 
9.19 	state employees retirement fund and shall have authority to sell, convey, and exchange 
9.20 	such securities and invest and reinvest the securities when it deems it desirable to do so 
9.21 	and shall sell securities upon request of the board of trustees when such funds are needed 
9.22 	for its purposes. All of the provisions regarding accounting procedures and restrictions 
9.23 	and conditions for the purchase and sale of securities for the state employees retirement 
9.24 	fund shallunder chapter 11A must apply to the accounting, purchase and sale of securities 
9.25 	for the public employees retirement fund.  

9.26 	Sec. 31. Minnesota Statutes 2008, section 353.27, subdivision 1, is amended to read:
9.27 		Subdivision 1.Income; disbursements. There is a special fund known as the 
9.28 	"public employees retirement fund," the "retirement fund," or the "fund," which shall 
9.29 	include all the assets of the association. This fund shall be credited with all contributions, 
9.30 	all interest and all other income authorized by law. From this fund there is appropriated 
9.31 	the payments authorized by this chapter in the amounts and at such time provided herein, 
10.1 	including the expenses of administering the fund, and including the proper share of the 
10.2 	Minnesota postretirement investment fund.

10.3 	Sec. 32. Minnesota Statutes 2008, section 353.29, is amended by adding a subdivision 
10.4 	to read:
10.5 		Subd. 9.Postretirement adjustment eligibility. An annuity under this section or 
10.6 	section 353.30 is eligible for postretirement adjustments under section 356.415.

10.7 	Sec. 33. Minnesota Statutes 2008, section 353.31, subdivision 1b, is amended to read:
10.8 		Subd. 1b.Joint and survivor option. (a) Prior to payment of a surviving spouse 
10.9 	benefit under subdivision 1, the surviving spouse may elect to receive the 100 percent 
10.10 	joint and survivor optional annuity under section  353.32, subdivision 1a, rather than a 
10.11 	surviving spouse benefit. 
10.12 	(b) If there is a dependent child or children, and the 100 percent joint and survivor 
10.13 	optional annuity for the surviving spouse, when added to the dependent children's benefit 
10.14 	under subdivisions 1 and 1a, exceeds an amount equal to 70 percent of the member's 
10.15 	specified average monthly salary, the 100 percent joint and survivor annuity under section  
10.16 	353.32, subdivision 1a, must be reduced by the amount necessary so that the total family 
10.17 	benefit does not exceed the 70 percent maximum family benefit amount under subdivision 
10.18 	1a. 
10.19 	(c) The 100 percent joint and survivor optional annuity must be restored to the 
10.20 	surviving spouse, plus applicable postretirement fund adjustments under Minnesota 
10.21 	Statutes 2008, section  356.41, through January 1, 2009, and thereafter under section 
10.22 	356.415, as the dependent child or children become no longer dependent under section  
10.23 	353.01, subdivision 15. 

10.24 	Sec. 34. Minnesota Statutes 2008, section 353.31, is amended by adding a subdivision 
10.25 	to read:
10.26 		Subd. 12.Postretirement adjustment eligibility. A survivor benefit under 
10.27 	subdivision 1 or 1b or section 353.32, subdivision 1a, 1b, or 1c is eligible for 
10.28 	postretirement adjustments under section 356.415.

10.29 	Sec. 35. Minnesota Statutes 2008, section 353.33, subdivision 3b, is amended to read:
10.30 		Subd. 3b.Optional annuity election. A disabled member may elect to receive the 
10.31 	normal disability benefit or an optional annuity under section 353.30, subdivision 3. The 
10.32 	election of an optional annuity must be made prior to the commencement of payment of 
11.1 	the disability benefit. The optional annuity must begin to accrue on the same date as 
11.2 	provided for the disability benefit. 
11.3 	(1) If a person who is not the spouse of a member is named as beneficiary of the 
11.4 	joint and survivor optional annuity, the person is eligible to receive the annuity only 
11.5 	if the spouse, on the disability application form prescribed by the executive director, 
11.6 	permanently waives the surviving spouse benefits under sections 353.31, subdivision 1, 
11.7 	and 353.32, subdivision 1a. If the spouse of the member refuses to permanently waive 
11.8 	the surviving spouse coverage, the selection of a person other than the spouse of the 
11.9 	member as a joint annuitant is invalid. 
11.10 	(2) If the spouse of the member permanently waives survivor coverage, the 
11.11 	dependent children, if any, continue to be eligible for survivor benefits under section 
11.12 	353.31, subdivision 1, including the minimum benefit in section 353.31, subdivision 1a. 
11.13 	The designated optional annuity beneficiary may draw the monthly benefit; however, the 
11.14 	amount payable to the dependent child or children and joint annuitant must not exceed 
11.15 	the 70 percent maximum family benefit under section 353.31, subdivision 1a. If the 
11.16 	maximum is exceeded, the benefit of the joint annuitant must be reduced to the amount 
11.17 	necessary so that the total family benefit does not exceed the 70 percent maximum family 
11.18 	benefit amount. 
11.19 	(3) If the spouse is named as the beneficiary of the joint and survivor optional 
11.20 	annuity, the spouse may draw the monthly benefits; however, the amount payable to 
11.21 	the dependent child or children and the joint annuitant must not exceed the 70 percent 
11.22 	maximum family benefit under section 353.31, subdivision 1a. If the maximum is 
11.23 	exceeded, each dependent child will receive ten percent of the member's specified 
11.24 	average monthly salary, and the benefit to the joint annuitant must be reduced to the 
11.25 	amount necessary so that the total family benefit does not exceed the 70 percent maximum 
11.26 	family benefit amount. The joint and survivor optional annuity must be restored to the 
11.27 	surviving spouse, plus applicable postretirement adjustments under Minnesota Statutes 
11.28 	2008, section 356.41 or section 356.415, as the dependent child or children become no 
11.29 	longer dependent under section 353.01, subdivision 15. 

11.30 	Sec. 36. Minnesota Statutes 2008, section 353.33, subdivision 7, is amended to read:
11.31 		Subd. 7.Partial reemployment. If, following a work or non-work-related injury 
11.32 	or illness, a disabled person who remains totally and permanently disabled as defined 
11.33 	in section 353.01, subdivision 19, has income from employment that is not substantial 
11.34 	gainful activity and the rate of earnings from that employment are less than the salary 
11.35 	rate at the date of disability or the salary rate currently paid for positions similar to the 
12.1 	employment position held by the disabled person immediately before becoming disabled, 
12.2 	whichever is greater, the executive director shall continue the disability benefit in an 
12.3 	amount that, when added to the earnings and any workers' compensation benefit, does not 
12.4 	exceed the salary rate at the date of disability or the salary currently paid for positions 
12.5 	similar to the employment position held by the disabled person immediately before 
12.6 	becoming disabled, whichever is higher. The disability benefit under this subdivision may 
12.7 	not exceed the disability benefit originally allowed, plus any postretirement adjustments 
12.8 	payable after December 31, 1988, in accordance with Minnesota Statutes 2008, section 
12.9 	11A.18, subdivision 10, or Minnesota Statutes 2008, section 356.41, through January 1, 
12.10 	2009, and thereafter as provided in section 356.415. No deductions for the retirement fund 
12.11 	may be taken from the salary of a disabled person who is receiving a disability benefit 
12.12 	as provided in this subdivision. 

12.13 	Sec. 37. Minnesota Statutes 2008, section 353.33, is amended by adding a subdivision 
12.14 	to read:
12.15 		Subd. 13.Postretirement adjustment eligibility. A disability benefit under this 
12.16 	section is eligible for postretirement adjustments under section 356.415.

12.17 	Sec. 38. Minnesota Statutes 2008, section 353.651, is amended by adding a subdivision 
12.18 	to read:
12.19 		Subd. 5.Postretirement adjustment eligibility. An annuity under this section is 
12.20 	eligible for postretirement adjustments under section 356.415.

12.21 	Sec. 39. Minnesota Statutes 2008, section 353.656, subdivision 5a, is amended to read:
12.22 		Subd. 5a.Cessation of disability benefit. (a) The association shall cease the 
12.23 	payment of any disability benefit the first of the month following the reinstatement of a 
12.24 	member to full time or less than full-time service in a position covered by the police 
12.25 	and fire fund.
12.26 	(b) A disability benefit paid to a disabled member of the police and fire plan, that 
12.27 	was granted under laws in effect after June 30, 2007, terminates at the end of the month in 
12.28 	which the member:
12.29 	(1) reaches normal retirement age; 
12.30 	(2) if the disability benefit is payable for a 60-month period as determined under 
12.31 	subdivisions 1 and 3, as applicable, the first of the month following the expiration of 
12.32 	the 60-month period; or
13.1 	(3) if the disabled member so chooses, the end of the month in which the member 
13.2 	has elected to convert to an early retirement annuity under section 353.651, subdivision 4.
13.3 	(c) If the police and fire plan member continues to be disabled when the disability 
13.4 	benefit terminates under this subdivision, the member is deemed to be retired. The 
13.5 	individual is entitled to receive a normal retirement annuity or an early retirement annuity 
13.6 	under section 353.651, whichever is applicable, as further specified in paragraph (d) 
13.7 	or (e). If the individual did not previously elect an optional annuity under subdivision 
13.8 	1a, paragraph (a), the individual may elect an optional annuity under subdivision 1a, 
13.9 	paragraph (b).
13.10 	(d) A member of the police and fire plan who is receiving a disability benefit under 
13.11 	this section may, upon application, elect to receive an early retirement annuity under 
13.12 	section 353.651, subdivision 4, at any time after attaining age 50, but must convert to a 
13.13 	retirement annuity no later than the end of the month in which the disabled member attains 
13.14 	normal retirement age. An early retirement annuity elected under this subdivision must be 
13.15 	calculated on the disabled member's accrued years of service and average salary as defined 
13.16 	in section 353.01, subdivision 17a, and when elected, the member is deemed to be retired.
13.17 	(e) When an individual's benefit is recalculated as a retirement annuity under this 
13.18 	section, the annuity must be based on clause (1) or clause (2), whichever provides the 
13.19 	greater amount:
13.20 	(1) the benefit amount at the time of reclassification, including all prior adjustments 
13.21 	provided under Minnesota Statutes 2008, section 11A.18, through January 1, 2009, and 
13.22 	thereafter as provided in section 356.415; or
13.23 	(2) a benefit amount computed on the member's actual years of accrued allowable 
13.24 	service credit and the law in effect at the time the disability benefit first accrued, plus any 
13.25 	increases that would have applied since that date under section Minnesota Statutes 2008, 
13.26 	11A.18, through January 1, 2009, and thereafter as provided in section 356.415.

13.27 	Sec. 40. Minnesota Statutes 2008, section 353.656, is amended by adding a subdivision 
13.28 	to read:
13.29 		Subd. 14.Postretirement adjustment eligibility. A disability benefit under this 
13.30 	section is eligible for postretirement adjustments under section 356.415.

13.31 	Sec. 41. Minnesota Statutes 2008, section 353.657, subdivision 3a, is amended to read:
13.32 		Subd. 3a.Maximum and minimum family benefits. (a) The maximum monthly 
13.33 	benefit per family must not exceed the following percentages of the member's average 
13.34 	monthly salary as specified in subdivision 3:
14.1 	(1) 80 percent, if the member's death was a line of duty death; or
14.2 	(2) 70 percent, if the member's death was not a line of duty death or occurred while 
14.3 	the member was receiving a disability benefit that accrued before July 1, 2007.
14.4 	(b) The minimum monthly benefit per family, including the joint and survivor 
14.5 	optional annuity under subdivision 2a, and section 353.656, subdivision 1a, must not be 
14.6 	less than the following percentage of the member's average monthly salary as specified in 
14.7 	subdivision 3:
14.8 	(1) 60 percent, if the death was a line of duty death; or 
14.9 	(2) 50 percent, if the death was not a line of duty death or occurred while the member 
14.10 	was receiving a disability benefit that accrued before July 1, 2007.
14.11 	(c) If the maximum under paragraph (a) is exceeded, the monthly benefit of the 
14.12 	joint annuitant must be reduced to the amount necessary so that the total family benefit 
14.13 	does not exceed the applicable maximum. The joint and survivor optional annuity must 
14.14 	be restored, plus applicable postretirement adjustments under Minnesota Statutes 2008, 
14.15 	section 356.41 or section 356.415, as the dependent child or children become no longer 
14.16 	dependent under section 353.01, subdivision 15.

14.17 	Sec. 42. Minnesota Statutes 2008, section 353.657, is amended by adding a subdivision 
14.18 	to read:
14.19 		Subd. 5.Postretirement adjustment eligibility. A survivor benefit under this 
14.20 	section is eligible for postretirement adjustments under section 356.415.

14.21 	Sec. 43. Minnesota Statutes 2008, section 353.665, subdivision 3, is amended to read:
14.22 		Subd. 3.Transfer of assets. Unless the municipality has elected to retain the 
14.23 	consolidation account under subdivision 1, paragraph (b), the assets of the former local 
14.24 	police or fire consolidation account must be transferred and upon transfer, the actuarial 
14.25 	value of the assets of a former local police or fire consolidation account less an amount 
14.26 	equal to the residual assets as determined under subdivision 7, paragraph (f), are the 
14.27 	assets of the public employees police and fire fund as of July 1, 1999. The participation 
14.28 	of a consolidation account in the Minnesota postretirement investment fund becomes 
14.29 	part of the participation of the public employees police and fire fund in the Minnesota 
14.30 	postretirement investment fund. The remaining assets, excluding the amounts for 
14.31 	distribution under subdivision 7, paragraph (f), become an asset of the public employees 
14.32 	police and fire fund. The public employees police and fire fund also must be credited as an 
14.33 	asset with the amount of receivable assets under subdivision 7, paragraph (e).

15.1 	Sec. 44. Minnesota Statutes 2008, section 353A.02, subdivision 14, is amended to read:
15.2 		Subd. 14.Ineligible investments. "Ineligible investments" means any investment 
15.3 	security or other asset held by the relief association at or after the initiation of the 
15.4 	consolidation procedure which does not comply with the applicable requirements or 
15.5 	limitations of sections 11A.09, 11A.18,11A.23, and 11A.24. 

15.6 	Sec. 45. Minnesota Statutes 2008, section 353A.02, subdivision 23, is amended to read:
15.7 		Subd. 23.Postretirement adjustment. "Postretirement adjustment" means any 
15.8 	periodic or regular procedure for modifying the amount of a retirement annuity, service 
15.9 	pension, disability benefit, or survivor benefit after the start of that annuity, pension, 
15.10 	or benefit, including but not limited to modifications of amounts from the Minnesota 
15.11 	postretirement investment fund under section 11A.18, subdivision 9 356.415, or any 
15.12 	benefit escalation or benefit amount modification based on changes in the salaries payable 
15.13 	to active police officers or salaried firefighters or changes in a cost-of-living index as 
15.14 	provided for in the existing relief association benefit plan. 

15.15 	Sec. 46. Minnesota Statutes 2008, section 353A.05, subdivision 1, is amended to read:
15.16 		Subdivision 1.Commission actions. (a) Upon initiation of consolidation as 
15.17 	provided in section 353A.04, the executive director of the commission shall direct the 
15.18 	actuary retained under section 356.214 to undertake the preparation of the actuarial 
15.19 	calculations necessary to complete the consolidation. 
15.20 	(b) These actuarial calculations shall include for each active member, each deferred 
15.21 	former member, each retired member, and each current beneficiary the computation of the 
15.22 	present value of future benefits, the future normal costs, if any, and the actuarial accrued 
15.23 	liability on the basis of the existing relief association benefit plan and on the basis of the 
15.24 	public employees police and fire fund benefit plan. These actuarial calculations shall also 
15.25 	include for the total active, deferred, retired, and benefit recipient membership the sum 
15.26 	of the present value of future benefits, the future normal costs, if any, and the actuarial 
15.27 	accrued liability on the basis of the existing relief association benefit plan, on the basis of 
15.28 	the public employees police and fire fund benefit plan, and on the basis of the benefit plan 
15.29 	which produced the largest present value of future benefits for each person. The actuarial 
15.30 	calculations shall be prepared using the entry age actuarial cost method for all components 
15.31 	of the benefit plan and using the actuarial assumptions applicable to the fund for the 
15.32 	most recent actuarial valuation prepared under section 356.215, except that the actuarial 
15.33 	calculations on the basis of the existing relief association benefit plan shall be prepared 
15.34 	using an interest rate actuarial assumption during the postretirement period which is in 
16.1 	the same amount as the interest rate actuarial assumption applicable to the preretirement 
16.2 	period. The actuarial calculations shall include the computation of the present value of the 
16.3 	initial postretirement adjustment anticipated by the executive director of the state board as 
16.4 	payable after the effective date of the consolidation from the Minnesota postretirement 
16.5 	investment fund under section 11A.18 356.415. 
16.6 	(c) The chief administrative officer of the relief association shall, upon request, 
16.7 	provide in a timely manner to the executive director of the commission and to the actuary 
16.8 	retained under section 356.214 the most current available information or documents, 
16.9 	whichever applies, regarding the demographics of the active, deferred, retired, and 
16.10 	benefit recipient membership of the relief association, the financial condition of the relief 
16.11 	association, and the existing benefit plan of the relief association.
16.12 	(d) Upon completion of the actuarial calculations required by this subdivision, the 
16.13 	actuary retained under section 356.214 shall issue a report in the form of an appropriate 
16.14 	summary of the actuarial calculations and shall provide a copy of that report to the 
16.15 	executive director of the commission, the executive director of the Public Employees 
16.16 	Retirement Association, the chief administrative officer of the relief association, the chief 
16.17 	administrative officer of the municipality in which the relief association is located, and 
16.18 	the state auditor.

16.19 	Sec. 47. Minnesota Statutes 2008, section 353A.05, subdivision 2, is amended to read:
16.20 		Subd. 2.State board actions. (a) Upon approval of consolidation by the 
16.21 	membership as provided in section 353A.04, the executive director of the state board 
16.22 	shall review the existing investment portfolio of the relief association for compliance 
16.23 	with the requirements and limitations set forth in sections 11A.09, 11A.14, 11A.18,
16.24 	11A.23, and 11A.24 and for appropriateness for retention in the light of the established 
16.25 	investment objectives of the state board. The executive director of the state board, using 
16.26 	any reporting service retained by the state board, shall determine the approximate market 
16.27 	value of the existing assets of the relief association upon the effective date of consolidation 
16.28 	and the transfer of assets from the relief association to the individual relief association 
16.29 	consolidation accounts at market value. 
16.30 	(b) The state board may require that the relief association liquidate any investment 
16.31 	security or other item of value which is determined to be ineligible or inappropriate for 
16.32 	retention by the state board. The liquidation shall occur before the effective date of 
16.33 	consolidation and transfer of assets.
16.34 	(c) If requested to do so by the chief administrative officer of the relief association 
16.35 	or of the municipality, the state board shall provide advice on the means and procedures 
17.1 	available to liquidate investment securities and other assets determined to be ineligible or 
17.2 	inappropriate.

17.3 	Sec. 48. Minnesota Statutes 2008, section 353A.08, subdivision 1, is amended to read:
17.4 		Subdivision 1.Election of coverage by current retirees. (a) A person who is 
17.5 	receiving a service pension, disability benefit, or survivor benefit is eligible to elect benefit 
17.6 	coverage provided under the relevant provisions of the public employees police and fire 
17.7 	fund benefit plan or to retain benefit coverage provided under the relief association benefit 
17.8 	plan in effect on the effective date of the consolidation. The relevant provisions of the 
17.9 	public employees police and fire fund benefit plan for the person electing that benefit 
17.10 	coverage are limited to participation in the Minnesota postretirement investment fund for
17.11 	any future postretirement adjustments under section 356.415 based on the amount of 
17.12 	the benefit or pension payable on December 31, if December 31 is the effective date of 
17.13 	consolidation, or on the December 1 following the effective date of the consolidation, if 
17.14 	other than December 31. The survivor benefit payable on behalf of any service pension 
17.15 	or disability benefit recipient who elects benefit coverage under the public employees 
17.16 	police and fire fund benefit plan must be calculated under the relief association benefit 
17.17 	plan and is subject to participation in the Minnesota postretirement investment fund for 
17.18 	any future postretirement adjustments under section 356.415 based on the amount of the 
17.19 	survivor benefit payable.
17.20 	(b) A survivor benefit calculated under the relief association benefit plan which is first 
17.21 	payable after June 30, 1997, to the surviving spouse of a retired member of a consolidation 
17.22 	account who, before July 1, 1997, chose to participate in the Minnesota postretirement 
17.23 	investment fundadjustments as provided under this subdivisionsection 356.415 must be 
17.24 	increased on the effective date of the survivor benefit on an actuarial equivalent basis to 
17.25 	reflect the change in the postretirement interest rate actuarial assumption under section 
17.26 	356.215, subdivision 8, from five percent to six percent under a calculation procedure and 
17.27 	tables adopted by the board and approved by the actuary retained under section 356.214. 
17.28 	(c) By electing the public employees police and fire fund benefit plan, a current 
17.29 	service pension or disability benefit recipient who, as of the first January 1 occurring after 
17.30 	the effective date of consolidation, has been receiving the pension or benefit for at least 
17.31 	seven months, or any survivor benefit recipient who, as of the first January 1 occurring 
17.32 	after the effective date of consolidation, has been receiving the benefit on the person's own 
17.33 	behalf or in combination with a prior applicable service pension or disability benefit for at 
17.34 	least seven months is eligible to receive a partial adjustment payable from the Minnesota 
17.35 	postretirement investment fund under section 11A.18, subdivision 9 356.415. 
18.1 	(d) The election by any pension or benefit recipient must be made on or before 
18.2 	the deadline established by the board of the Public Employees Retirement Association 
18.3 	in a manner that recognizes the number of persons eligible to make the election and the 
18.4 	anticipated time required to conduct any required benefit counseling.

18.5 	Sec. 49. Minnesota Statutes 2008, section 353A.08, subdivision 3, is amended to read:
18.6 		Subd. 3.Election of coverage by active members. (a) A person who is an active 
18.7 	member of a police or fire relief association, other than a volunteer firefighter, has the 
18.8 	option to elect benefit coverage under the relevant provisions of the public employees 
18.9 	police and fire fund or to retain benefit coverage provided by the relief association benefit 
18.10 	plan in effect on the effective date of consolidation. The relevant provisions of the public 
18.11 	employee police and fire fund benefit plan for the person electing that benefit coverage 
18.12 	are the relevant provisions of the public employee police and fire fund benefit plan 
18.13 	applicable to retirement annuities, disability benefits, and survivor benefits, including 
18.14 	participation in the Minnesota postretirement investment fund adjustments under section 
18.15 	356.415, but excluding any provisions governing the purchase of credit for prior service 
18.16 	or making payments in lieu of member contribution deductions applicable to any period 
18.17 	which occurred before the effective date of consolidation.
18.18 	(b) An active member is eligible to make an election at one of the following times:
18.19 	(1) within six months of the effective date of consolidation;
18.20 	(2) between the date on which the active member attains the age of 49 years and six 
18.21 	months and the date on which the active member attains the age of 50 years; or
18.22 	(3) on the date on which the active member terminates active employment for 
18.23 	purposes of receiving a service pension or disability benefits, or within 90 days of the 
18.24 	date the member terminates active employment and defers receipt of a service pension, 
18.25 	whichever applies.

18.26 	Sec. 50. Minnesota Statutes 2008, section 353A.081, subdivision 2, is amended to read:
18.27 		Subd. 2.Election of coverage. (a) Individuals eligible under subdivision 1 may 
18.28 	elect, on a form prescribed by the executive director of the Public Employees Retirement 
18.29 	Association, to have survivor benefits calculated under the relevant provisions of the 
18.30 	public employees police and fire fund benefit plan or to have survivor benefits calculated 
18.31 	under the relief association benefit plan. The relevant provisions of the public employee 
18.32 	police and fire fund benefit plan for the person electing that benefit coverage are the 
18.33 	relevant provisions of the public employee police and fire fund benefit plan applicable 
19.1 	to survivor benefits, including participation in the Minnesota postretirement investment 
19.2 	fund adjustments under section 356.415.
19.3 	(b) If the election results in an increased benefit amount to the surviving spouse 
19.4 	eligible under subdivision 1, or to eligible children if there is no surviving spouse, the 
19.5 	increased benefit accrues as of the date on which the survivor benefits payable to the 
19.6 	survivors from the consolidation account were first paid. The back payment of any 
19.7 	increase in prior benefit amounts, plus any postretirement adjustments payable under 
19.8 	section 356.41 356.415, or any increase payable under the local relief association bylaws 
19.9 	is payable as soon as practicable after the effective date of the election. 

19.10 	Sec. 51. Minnesota Statutes 2008, section 353A.09, subdivision 1, is amended to read:
19.11 		Subdivision 1.Establishment of consolidation accounts. (a) The board of trustees 
19.12 	of the Public Employees Retirement Association shall establish a separate consolidation 
19.13 	account for each local relief association of a municipality that consolidates with the Public 
19.14 	Employees Retirement Association. The association shall credit to the consolidation 
19.15 	account the assets of the individual consolidating local relief association upon transfer, 
19.16 	member contributions received after consolidation under subdivision 4, municipal 
19.17 	contributions received after consolidation under subdivision 5, and a proportionate share 
19.18 	of any investment income earned after consolidation. From the consolidation account, 
19.19 	the association shall pay for the transfer of any required reserves to the Minnesota 
19.20 	postretirement investment fund on account of persons electing the type of benefit coverage 
19.21 	provided by the public employees police and fire fund under subdivisions 2 and 3 and 
19.22 	section 353.271, subdivision 2, the pension and benefit amounts on account of persons 
19.23 	electing coverage by the relief association benefit plan under section 353A.08, the benefit 
19.24 	amounts not payable from the Minnesota postretirement investment fund on account of 
19.25 	persons electing the type of benefit coverage provided by the public employees police and 
19.26 	fire fund under section 353A.08, and any direct administrative expenses related to the 
19.27 	consolidation account, and the proportional share of the general administrative expenses 
19.28 	of the association. 
19.29 	(b) Except as otherwise provided for in this section, the liabilities and the assets 
19.30 	of a consolidation account must be considered for all purposes to be separate from the 
19.31 	balance of the public employees police and fire fund. The consolidation account must be 
19.32 	subject to separate accounting, a separate actuarial valuation, and must be reported as a 
19.33 	separate exhibit in any annual financial report or actuarial valuation report of the public 
19.34 	employees police and fire consolidation fund, whichever applies. The executive director 
20.1 	of the public employees retirement association shall maintain separate accounting records 
20.2 	and balances for each consolidation account.

20.3 	Sec. 52. Minnesota Statutes 2008, section 353A.10, subdivision 2, is amended to read:
20.4 		Subd. 2.Collection of late contributions. In the event of a refusal by a 
20.5 	municipality in which was located a local police or firefighters relief association which 
20.6 	has consolidated with the fund to pay to the fund any amount or amounts due under 
20.7 	section 353A.09, subdivisions 2 4 to 6, the executive director of the public employees 
20.8 	retirement association may notify the Department of Revenue, the Department of Finance, 
20.9 	and the state auditor of the refusal and commence the necessary procedure to collect the 
20.10 	amount or amounts due from the amount of any state aid under sections 69.011 to 69.051, 
20.11 	amortization state aid under section 423A.02, or supplemental amortization state aid under 
20.12 	Laws 1984, chapter 564, section 48, as amended by Laws 1986, chapter 359, section 20, 
20.13 	which is payable to the municipality or to certify the amount or amounts due to the county 
20.14 	auditor for inclusion in the next tax levy of the municipality or for collection from other 
20.15 	revenue available to the municipality, or both. 

20.16 	Sec. 53. Minnesota Statutes 2008, section 353A.10, subdivision 3, is amended to read:
20.17 		Subd. 3.Levy and bonding authority. A municipality in which was located a local 
20.18 	police or firefighters relief association that has consolidated with the fund may issue 
20.19 	general obligation bonds of the municipality to defray all or a portion of the principal 
20.20 	amounts specified in section 353A.09, subdivisions 2 4 to 6, or certify to the county 
20.21 	auditor a levy in the amount necessary to defray all or a portion of the principal amount 
20.22 	specified in section 353A.09, subdivisions 2 4 to 6, or the annual amount specified in 
20.23 	section 353A.09, subdivisions 2 4 to 6. The municipality may pledge the full faith, credit, 
20.24 	and taxing power of the municipality for the payment of the principal of and interest on the 
20.25 	general obligation bonds. Any municipal bond may be issued without an election under 
20.26 	section 475.58 and may not be included in the net debt of the municipality for purposes of 
20.27 	any charter or statutory debt limitation, nor may any tax levy for the payment of bond 
20.28 	principal or interest be subject to any limitation concerning rate or amount established 
20.29 	by charter or law. 

20.30 	Sec. 54. Minnesota Statutes 2008, section 353E.01, subdivision 3, is amended to read:
20.31 		Subd. 3.Investment. (a) The public employees local government correctional 
20.32 	service retirement fund participates in the Minnesota postretirement investment fund.
20.33 	(b) The amounts provided in section 353.271 must be deposited in that fund.  
21.1 	(c) The balance of any Assets of the public employees local government correctional 
21.2 	service retirement fund must be deposited in the Minnesota combined investment fund as 
21.3 	provided in section 11A.14, if applicable, or otherwise invested under section 11A.23.  

21.4 	Sec. 55. Minnesota Statutes 2008, section 353E.01, subdivision 5, is amended to read:
21.5 		Subd. 5.Fund disbursement restricted. (a) The public employees local 
21.6 	government correctional service retirement fund and its share of participation in the 
21.7 	Minnesota postretirement investment fund may be disbursed only for the purposes 
21.8 	provided for in this chapter.
21.9 	(b) The proportional share of the necessary and reasonable administrative expenses 
21.10 	of the association and any benefits provided in this chapter, other than benefits payable 
21.11 	from the Minnesota postretirement investment fund, must be paid from the public 
21.12 	employees local government correctional service retirement fund. Retirement annuities, 
21.13 	disability benefits, survivorship benefits, and any refunds of accumulated deductions may 
21.14 	be paid only from the correctional service retirement fund after those needs have been 
21.15 	certified by the executive director and any applicable amounts withdrawn from the share 
21.16 	of participation in the Minnesota postretirement fund under section 11A.18.  
21.17 	(c) The amounts necessary to make the payments from the public employees local 
21.18 	government correctional service retirement fund and its participation in the Minnesota 
21.19 	postretirement investment fund are annually appropriated from those funds for those 
21.20 	purposes.

21.21 	Sec. 56. Minnesota Statutes 2008, section 353E.04, is amended by adding a subdivision 
21.22 	to read:
21.23 		Subd. 7.Postretirement adjustment eligibility. An annuity under this section is 
21.24 	eligible for postretirement adjustments under section 356.415.

21.25 	Sec. 57. Minnesota Statutes 2008, section 353E.06, is amended by adding a subdivision 
21.26 	to read:
21.27 		Subd. 9.Postretirement adjustment eligibility. A disability benefit under this 
21.28 	section is eligible for postretirement adjustments under section 356.415.

21.29 	Sec. 58. Minnesota Statutes 2008, section 353E.07, is amended by adding a subdivision 
21.30 	to read:
21.31 		Subd. 8.Postretirement adjustment eligibility. A survivor benefit under this 
21.32 	section is eligible for postretirement adjustments under section 356.415.

22.1 	Sec. 59. Minnesota Statutes 2008, section 354.07, subdivision 4, is amended to read:
22.2 		Subd. 4.Certification of funds to State Board of Investment. It shall be the 
22.3 	duty of the board from time to time to certify to the State Board of Investment for 
22.4 	investment as much of the funds in its hands as shall not be needed for current purposes. 
22.5 	Such funds that are certified as to investment in the postretirement investment fund shall 
22.6 	include the amount as required for the total reserves needed for the purposes described in 
22.7 	section 354.63. The State Board of Investment shall thereupon transfer such assets to the 
22.8 	appropriate fund provided herein, in accordance with the procedure set forth in section 
22.9 	354.63, or invest and reinvest an amount equal to the sum so certified in such securities 
22.10 	as are now or may hereafter be duly authorized legal investments for state employees 
22.11 	retirement fund and all such securities so transferred or purchased shall be deposited with 
22.12 	the commissioner of finance. All interest from these investments shall be credited to the 
22.13 	appropriate fundsteachers retirement fund and used for current purposes or investments, 
22.14 	except as hereinafter provided. The State Board of Investment shall have authority to sell, 
22.15 	convey, and exchange such securities and invest and reinvest the funds when it deems it 
22.16 	desirable to do so, and shall sell securities upon request of the officers of the association 
22.17 	when such officers determine funds are needed for its purposes. All of the provisions 
22.18 	regarding accounting procedures and restrictions and conditions for the purchase and sale 
22.19 	of securities for the state employees retirement fund shallunder chapter 11A must apply to 
22.20 	the accounting, purchase and sale of securities for the Teachers' Retirement Association. 

22.21 	Sec. 60. Minnesota Statutes 2008, section 354.33, subdivision 5, is amended to read:
22.22 		Subd. 5.Retirees not eligible for federal benefits. When any person retires after 
22.23 	July 1, 1973, who (1) has ten or more years of allowable service, and (2) does not have any 
22.24 	retroactive Social Security coverage by reason of the person's position in the retirement 
22.25 	system, and (3) does not qualify for federal old age and survivor primary benefits at the 
22.26 	time of retirement, the annuity must be computed under section 354.44, subdivision 2, of 
22.27 	the law in effect on June 30, 1969, except that accumulations after June 30, 1957, must be 
22.28 	calculated using the samemost recent mortality table approved under section 356.215, 
22.29 	subdivision 18, and interest assumption as are used to transfer the required reserves to the 
22.30 	Minnesota postretirement investment fund using the applicable postretirement interest rate 
22.31 	assumption specified in section 356.215, subdivision 8.

22.32 	Sec. 61. Minnesota Statutes 2008, section 354.35, is amended by adding a subdivision 
22.33 	to read:
23.1 		Subd. 3.Postretirement adjustment eligibility. An annuity under this section is 
23.2 	eligible for postretirement adjustments under section 356.415.

23.3 	Sec. 62. Minnesota Statutes 2008, section 354.42, subdivision 1a, is amended to read:
23.4 		Subd. 1a.Teachers retirement fund. (a) Within the Teachers Retirement 
23.5 	Association and the state treasury is created a special retirement fund, which must include 
23.6 	all the assets of the Teachers Retirement Association and all revenue of the association. 
23.7 	The fund is the continuation of the fund established under Laws 1931, chapter 406, section 
23.8 	2, notwithstanding the repeal of Minnesota Statutes 1973, section 354.42, subdivision 1, 
23.9 	by Laws 1974, chapter 289, section 59.
23.10 	(b) The teachers retirement fund must be credited with all employee and employer 
23.11 	contributions, all investment revenue and gains, and all other income authorized by law.
23.12 	(c) From the teachers retirement fund is appropriated the payments of annuities 
23.13 	and benefits authorized by this chapter, the transfers to the Minnesota postretirement 
23.14 	investment fund, and the reasonable and necessary expenses of administering the fund 
23.15 	and the association.

23.16 	Sec. 63. Minnesota Statutes 2008, section 354.44, is amended by adding a subdivision 
23.17 	to read:
23.18 		Subd. 7a.Postretirement adjustment eligibility. (a) A retirement annuity under 
23.19 	subdivision 2 or 6 is eligible for postretirement adjustments under section 356.415.
23.20 	(b) Retirement annuities payable from the teachers retirement plan must not be in 
23.21 	an amount less than the amount originally determined on the date of retirement and as 
23.22 	adjusted on each succeeding January 1 under Minnesota Statutes 2008, section 11A.18, 
23.23 	before January 1, 2010, and under section 356.415 after December 31, 2009.

23.24 	Sec. 64. Minnesota Statutes 2008, section 354.46, is amended by adding a subdivision 
23.25 	to read:
23.26 		Subd. 7.Postretirement adjustment eligibility. A survivor benefit under 
23.27 	subdivision 1, 2, 2a, or 2b, is eligible for postretirement adjustments under section 356.415.

23.28 	Sec. 65. Minnesota Statutes 2008, section 354.48, is amended by adding a subdivision 
23.29 	to read:
23.30 		Subd. 11.Postretirement adjustment eligibility. A disability benefit under this 
23.31 	section is eligible for postretirement adjustments under section 356.415.

24.1 	Sec. 66. Minnesota Statutes 2008, section 354.55, subdivision 13, is amended to read:
24.2 		Subd. 13.Pre-1969 law retirements. Any person who ceased teaching service 
24.3 	prior to July 1, 1968, who has ten years or more of allowable service and left accumulated 
24.4 	deductions in the fund for the purpose of receiving when eligible a retirement annuity, 
24.5 	and retires shall have the annuity computed in accordance with the law in effect on June 
24.6 	30, 1969, except that the portion of the annuity based on accumulations after June 30, 
24.7 	1957, under Minnesota Statutes 1967, section 354.44, subdivision 2, and accumulations 
24.8 	under Minnesota Statutes 1967, section 354.33, subdivision 1, shallmust be calculated 
24.9 	using the mortality table established by the board under section 354.07, subdivision 1, 
24.10 	and approved under section 356.215, subdivision 18, and the postretirement interest rate 
24.11 	assumption specified in section 356.215, to transfer the required reserves to the Minnesota 
24.12 	postretirement investment fund subdivision 8. 

24.13 	Sec. 67. Minnesota Statutes 2008, section 354.70, subdivision 5, is amended to read:
24.14 		Subd. 5.Transfer of assets. (a) On or before June 30, 2006, the chief administrative 
24.15 	officer of the Minneapolis Teachers Retirement Fund Association shall transfer to the 
24.16 	Teachers Retirement Association the entire assets of the special retirement fund of the 
24.17 	Minneapolis Teachers Retirement Fund Association. The transfer of the assets of the 
24.18 	Minneapolis Teachers Retirement Fund Association special retirement fund must include 
24.19 	any accounts receivable that are determined by the executive director of the State Board of 
24.20 	Investment as reasonably capable of being collected. Legal title to account receivables that 
24.21 	are determined by the executive director of the State Board of Investment as not reasonably 
24.22 	capable of being collected transfers to Special School District No. 1, Minneapolis, as of 
24.23 	the date of the determination of the executive director of the State Board of Investment. 
24.24 	If the account receivables transferred to Special School District No. 1, Minneapolis, 
24.25 	are subsequently recovered by the school district, the superintendent of Special School 
24.26 	District No. 1, Minneapolis, shall transfer the recovered amount to the executive director 
24.27 	of the Teachers Retirement Association, in cash, for deposit in the teachers retirement 
24.28 	fund, less the reasonable expenses of the school district related to the recovery.
24.29 	(b) As of June 30, 2006, assets of the special retirement fund of the Minneapolis 
24.30 	Teachers Retirement Fund Association are assets of the Teachers Retirement Association 
24.31 	to be invested by the State Board of Investment pursuant to the provisions of section 
24.32 	354.07, subdivision 4. The Teachers Retirement Association is the successor in interest to 
24.33 	all claims which the Minneapolis Teachers Retirement Fund Association may have or may 
24.34 	assert against any person and is the successor in interest to all claims which could have 
25.1 	been asserted against the former Minneapolis Teachers Retirement Fund Association, 
25.2 	subject to the following exceptions and qualifications: 
25.3 	(1) the Teachers Retirement Association is not liable for any claim against the 
25.4 	Minneapolis Teachers Retirement Fund Association, its former board or board members, 
25.5 	which is founded upon a claim of breach of fiduciary duty, where the act or acts 
25.6 	constituting the claimed breach were not done in good faith;
25.7 	 (2) the Teachers Retirement Association may assert any applicable defense to any 
25.8 	claim in any judicial or administrative proceeding that the former Minneapolis Teachers 
25.9 	Retirement Fund Association or its board would otherwise have been entitled to assert; 
25.10 	(3) the Teachers Retirement Association may assert any applicable defense that the 
25.11 	Teachers Retirement Association may assert in its capacity as a statewide agency; and 
25.12 	(4) the Teachers Retirement Association shall indemnify any former fiduciary of the 
25.13 	Minneapolis Teachers Retirement Fund Association consistent with the provisions of the 
25.14 	Public Pension Fiduciary Responsibility Act, in section 356A.11.
25.15 	(c) From the assets of the former Minneapolis Teachers Retirement Fund Association 
25.16 	transferred to the Teachers Retirement Association, an amount equal to the percentage 
25.17 	figure that represents the ratio between the market value of the Minnesota postretirement 
25.18 	investment fund as of June 30, 2006, and the required reserves of the Minnesota 
25.19 	postretirement investment fund as of June 30, 2006, applied to the present value of 
25.20 	future benefits payable to annuitants of the former Minneapolis Teachers Retirement 
25.21 	Fund Association as of June 30, 2006, including any postretirement adjustment from the 
25.22 	Minnesota postretirement investment fund expected to be payable on January 1, 2007, 
25.23 	must be transferred to the Minnesota postretirement investment fund. The executive 
25.24 	director of the State Board of Investment shall estimate this ratio at the time of the 
25.25 	transfer. By January 1, 2007, after all necessary financial information becomes available 
25.26 	to determine the actual funded ratio of the Minnesota postretirement investment fund, the 
25.27 	postretirement investment fund must refund to the Teachers Retirement Association any 
25.28 	excess assets or the Teachers Retirement Association must contribute any deficiency to 
25.29 	the Minnesota postretirement investment fund with interest under Minnesota Statutes 
25.30 	2008, section 11A.18, subdivision 6. The balance of the assets of the former Minneapolis 
25.31 	Teachers Retirement Fund Association after the transfer to the Minnesota postretirement 
25.32 	investment fund must be credited to the Teachers Retirement Association.
25.33 	(d) If the assets transferred by the Minneapolis Teachers Retirement Fund 
25.34 	Association to the Teachers Retirement Association are insufficient to meet its obligation 
25.35 	to the Minnesota postretirement investment fund, additional assets must be transferred by 
25.36 	the executive director of the Teachers Retirement Association to meet the amount required.

26.1 	Sec. 68. Minnesota Statutes 2008, section 354.70, subdivision 6, is amended to read:
26.2 		Subd. 6.Benefit calculation. (a) For every deferred, inactive, disabled, and retired 
26.3 	member of the Minneapolis Teachers Retirement Fund Association transferred under 
26.4 	subdivision 1, and the survivors of these members, annuities or benefits earned before 
26.5 	the date of the transfer, other than future postretirement adjustments, must be calculated 
26.6 	and paid by the Teachers Retirement Association under the laws, articles of incorporation, 
26.7 	and bylaws of the former Minneapolis Teachers Retirement Fund Association that were 
26.8 	in effect relative to the person on the date of the person's termination of active service 
26.9 	covered by the former Minneapolis Teachers Retirement Fund Association.
26.10 	(b) Former Minneapolis Teachers Retirement Fund Association members who 
26.11 	retired before July 1, 2006, must receive postretirement adjustments after December 31, 
26.12 	2006, only as provided in Minnesota Statutes 2008, section 11A.18 or section 356.415. All 
26.13 	other benefit recipients of the former Minneapolis Teachers Retirement Fund Association 
26.14 	must receive postretirement adjustments after December 31, 2006, only as provided in 
26.15 	section 356.41 356.415.
26.16 	(c) This consolidation does not impair or diminish benefits for an active, deferred, 
26.17 	or retired member or a survivor of an active, deferred, or retired member under the 
26.18 	former Minneapolis Teachers Retirement Fund Association in existence at the time of the 
26.19 	consolidation, except that any future guaranteed or investment-related postretirement 
26.20 	adjustments must be paid after July 1, 2006, in accordance with paragraph (b), and all 
26.21 	benefits based on service on or after July 1, 2006, must be determined only by laws 
26.22 	governing the Teachers Retirement Association.

26.23 	Sec. 69. Minnesota Statutes 2008, section 356.215, subdivision 1, is amended to read:
26.24 		Subdivision 1.Definitions. (a) For the purposes of sections 3.85 and 356.20 to 
26.25 	356.23, each of the terms in the following paragraphs has the meaning given. 
26.26 	(b) "Actuarial valuation" means a set of calculations prepared by an actuary retained 
26.27 	under section 356.214 if so required under section 3.85, or otherwise, by an approved 
26.28 	actuary, to determine the normal cost and the accrued actuarial liabilities of a benefit 
26.29 	plan, according to the entry age actuarial cost method and based upon stated assumptions 
26.30 	including, but not limited to rates of interest, mortality, salary increase, disability, 
26.31 	withdrawal, and retirement and to determine the payment necessary to amortize over a 
26.32 	stated period any unfunded accrued actuarial liability disclosed as a result of the actuarial 
26.33 	valuation of the benefit plan. 
26.34 	(c) "Approved actuary" means a person who is regularly engaged in the business of 
26.35 	providing actuarial services and who is a fellow in the Society of Actuaries.
27.1 	(d) "Entry age actuarial cost method" means an actuarial cost method under which 
27.2 	the actuarial present value of the projected benefits of each individual currently covered 
27.3 	by the benefit plan and included in the actuarial valuation is allocated on a level basis over 
27.4 	the service of the individual, if the benefit plan is governed by section 69.773, or over the 
27.5 	earnings of the individual, if the benefit plan is governed by any other law, between the 
27.6 	entry age and the assumed exit age, with the portion of the actuarial present value which is 
27.7 	allocated to the valuation year to be the normal cost and the portion of the actuarial present 
27.8 	value not provided for at the valuation date by the actuarial present value of future normal 
27.9 	costs to be the actuarial accrued liability, with aggregation in the calculation process to be 
27.10 	the sum of the calculated result for each covered individual and with recognition given to 
27.11 	any different benefit formulas which may apply to various periods of service.
27.12 	(e) "Experience study" means a report providing experience data and an actuarial 
27.13 	analysis of the adequacy of the actuarial assumptions on which actuarial valuations are 
27.14 	based.
27.15 	(f) "Actuarial value of assets" means:
27.16 	(1) For the July 1, 2009, actuarial valuation, the market value of all assets as of 
27.17 	the preceding June 30, 2009, reduced by:
27.18 	(1)(i) 20 percent of the difference between the actual net change in the market 
27.19 	value of the active fund assets between the June 30 that occurred three years earlier, 
27.20 	2006, and the June 30 that occurred four years earlier, 2005, and the computed increase 
27.21 	in the market value of the active fund assets over that fiscal year period if the assets had 
27.22 	increased at the percentage preretirement interest rate assumption used in the actuarial 
27.23 	valuation for the July 1 that occurred four years earlier earned a rate of return on assets 
27.24 	equal to 8.5 percent annually;
27.25 	(2) (ii) 40 percent of the difference between the actual net change in the market 
27.26 	value of the active fund assets between the June 30 that occurred two years earlier, 2007,
27.27 	and the June 30 that occurred three years earlier, 2006, and the computed increase in 
27.28 	the market value of the active fund assets over that fiscal year period if the assets had 
27.29 	increased at the percentage preretirement interest rate assumption used in the actuarial 
27.30 	valuation for the July 1 that occurred three years earlier earned a rate of return on assets 
27.31 	equal to 8.5 percent annually;
27.32 	(3) (iii) 60 percent of the difference between the actual net change in the active 
27.33 	fund market value of assets between the June 30 that occurred one year earlier, 2008,
27.34 	and the June 30 that occurred two years earlier, 2007, and the computed increase in the 
27.35 	active fund market value of assets over that fiscal year period if the assets had increased 
27.36 	at the percentage preretirement interest rate assumption used in the actuarial valuation 
28.1 	for the July 1 that occurred two years earlier earned a rate of return on assets equal to 
28.2 	8.5 percent annually; and
28.3 	(4) (iv) 80 percent of the difference between the actual net change in the market 
28.4 	value of the active fund assets between the immediately prior June 30, 2009, and the June 
28.5 	30 that occurred one year earlier, 2008, and the computed increase in the market value 
28.6 	of the active fund assets over that fiscal year period if the assets had increased at the 
28.7 	percentage preretirement interest rate assumption used in the actuarial valuation for the 
28.8 	July 1 that occurred one year earlier. earned a rate of return on assets equal to 8.5 percent 
28.9 	annually; and
28.10 	(v) 80 percent of the difference between the actual net change in the market value of 
28.11 	the Minnesota postretirement investment fund between June 30, 2009, and June 30, 2008, 
28.12 	and the computed increase in the market value of assets over that fiscal year period if the 
28.13 	assets had increased at 8.5 percent annually.
28.14 	(2) For the July 1, 2010, actuarial valuation, the market value of all assets as of 
28.15 	June 30, 2010, reduced by: 
28.16 	(i) 20 percent of the difference between the actual net change in the market value 
28.17 	of the active fund assets between June 30, 2007, and June 30, 2006, and the computed 
28.18 	increase in the market value of the active fund assets over that fiscal year period if the 
28.19 	assets had earned a rate of return on assets equal to 8.5 percent annually;
28.20 	(ii) 40 percent of the difference between the actual net change in the market value 
28.21 	of the active fund assets between June 30, 2008, and June 30, 2007, and the computed 
28.22 	increase in the market value of the active fund assets over that fiscal year period if the 
28.23 	assets had earned a rate of return on assets equal to 8.5 percent annually;
28.24 	(iii) 60 percent of the difference between the actual net change in the market value 
28.25 	of the active fund assets between June 30, 2009, and June 30, 2008, and the computed 
28.26 	increase in the market value of the active fund assets over that fiscal year period if the 
28.27 	assets had earned a rate of return on assets equal to 8.5 percent annually; 
28.28 	(iv) 80 percent of the difference between the actual net change in the market value of 
28.29 	total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 
28.30 	market value of total assets over that fiscal year period if the assets had earned a rate of 
28.31 	return on assets equal to 8.5 percent annually; and
28.32 	(v) 60 percent of the difference between the actual net change in the market value of 
28.33 	the Minnesota postretirement investment fund between June 30, 2009, and June 30, 2008, 
28.34 	and the computed increase in the market value of assets over that fiscal year period if the 
28.35 	assets had increased at 8.5 percent annually.
29.1 	(3) For the July 1, 2011, actuarial valuation, the market value of all assets as of 
29.2 	June 30, 2011, reduced by:
29.3 	(i) 20 percent of the difference between the actual net change in the market value 
29.4 	of the active fund assets between June 30, 2008, and June 30, 2007, and the computed 
29.5 	increase in the market value of the active fund assets over that fiscal year period if the 
29.6 	assets had earned a rate of return on assets equal to 8.5 percent annually;
29.7 	(ii) 40 percent of the difference between the actual net change in the market value of 
29.8 	the active fund assets between June 30, 2009, and the June 30, 2008, and the computed 
29.9 	increase in the market value of the active fund assets over that fiscal year period if the 
29.10 	assets had earned a rate of return on assets equal to 8.5 percent annually;
29.11 	(iii) 60 percent of the difference between the actual net change in the market value 
29.12 	of the total assets between June 30, 2010, and June 30, 2009, and the computed increase in 
29.13 	the market value of the total assets over that fiscal year period if the assets had earned a 
29.14 	rate of return on assets equal to 8.5 percent annually;
29.15 	(iv) 80 percent of the difference between the actual net change in the market value of 
29.16 	total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 
29.17 	market value of total assets over that fiscal year period if the assets had earned a rate of 
29.18 	return on assets equal to 8.5 percent annually; and
29.19 	(v) 40 percent of the difference between the actual net change in the market value of 
29.20 	the Minnesota postretirement investment fund between June 30, 2009, and June 30, 2008, 
29.21 	and the computed increase in the market value of assets over that fiscal year period if the 
29.22 	assets had increased at 8.5 percent annually.
29.23 	(4) For the July 1, 2012, actuarial valuation, the market value of all assets as of 
29.24 	June 30, 2012, reduced by:
29.25 	(i) 20 percent of the difference between the actual net change in the market value 
29.26 	of the active fund assets between June 30, 2009, and June 30, 2008, and the computed 
29.27 	increase in the market value of the active fund assets over that fiscal year period if the 
29.28 	assets had earned a rate of return on assets equal to 8.5 percent annually;
29.29 	(ii) 40 percent of the difference between the actual net change in the market value of 
29.30 	total assets between June 30, 2010, and June 30, 2009, and the computed increase in the 
29.31 	market value of total assets over that fiscal year period if the assets had earned a rate of 
29.32 	return on assets equal to 8.5 percent annually;
29.33 	(iii) 60 percent of the difference between the actual net change in the market value 
29.34 	of total assets between June 30, 2011, and June 30, 2010, and the computed increase in the 
29.35 	market value of total assets over that fiscal year period if the assets had earned a rate of 
29.36 	return on assets equal to 8.5 percent annually;
30.1 	(iv) 80 percent of the difference between the actual net change in the market value of 
30.2 	total assets between June 30, 2012, and June 30, 2011, and the computed increase in the 
30.3 	market value of total assets over that fiscal year period if the assets had earned a rate of 
30.4 	return on assets equal to 8.5 percent annually; and
30.5 	(v) 20 percent of the difference between the actual net change in the market value of 
30.6 	the Minnesota postretirement investment fund between June 30, 2009, and June 30, 2008, 
30.7 	and the computed increase in the market value of assets over that fiscal year period if the 
30.8 	assets had increased at 8.5 percent annually.
30.9 	(5) For the July 1, 2013, and following actuarial valuations, the market value of all 
30.10 	assets as of the preceding June 30, reduced by:
30.11 	(i) 20 percent of the difference between the actual net change in the market value 
30.12 	of total assets between the June 30 that occurred three years earlier and the June 30 that 
30.13 	occurred four years earlier and the computed increase in the market value of total assets 
30.14 	over that fiscal year period if the assets had earned a rate of return on assets equal to 
30.15 	8.5 percent annually;
30.16 	(ii) 40 percent of the difference between the actual net change in the market value 
30.17 	of total assets between the June 30 that occurred two years earlier and the June 30 that 
30.18 	occurred three years earlier and the computed increase in the market value of total assets 
30.19 	over that fiscal year period if the assets had earned a rate of return on assets equal to 
30.20 	8.5 percent annually;
30.21 	(iii) 60 percent of the difference between the actual net change in the market value 
30.22 	of total assets between the June 30 that occurred one year earlier and the June 30 that 
30.23 	occurred two years earlier and the computed increase in the market value of total assets 
30.24 	over that fiscal year period if the assets had earned a rate of return on assets equal to 
30.25 	8.5 percent annually; and
30.26 	(iv) 80 percent of the difference between the actual net change in the market value of 
30.27 	total assets between the most recent June 30 and the June 30 that occurred one year earlier 
30.28 	and the computed increase in the market value of total assets over that fiscal year period if 
30.29 	the assets had earned a rate of return on assets equal to 8.5 percent annually.
30.30 	(6) Notwithstanding the calculations in clauses (1) to (5), the actuarial value of 
30.31 	assets is the lesser of the amount calculated in clauses (1) to (5), or 120 percent of the 
30.32 	market value of assets as of the June 30 immediately preceding the valuation date.
30.33 	(7) Notwithstanding the calculations in clauses (1) to (6), the actuarial value of 
30.34 	assets is the greater of the amount calculated in clause (6), or 80 percent of the market 
30.35 	value of assets as of the June 30 immediately preceding the valuation date.
31.1 	(g) "Unfunded actuarial accrued liability" means the total current and expected 
31.2 	future benefit obligations, reduced by the sum of the actuarial value of assets and the 
31.3 	present value of future normal costs.
31.4 	(h) "Pension benefit obligation" means the actuarial present value of credited 
31.5 	projected benefits, determined as the actuarial present value of benefits estimated to be 
31.6 	payable in the future as a result of employee service attributing an equal benefit amount, 
31.7 	including the effect of projected salary increases and any step rate benefit accrual rate 
31.8 	differences, to each year of credited and expected future employee service.

31.9 	Sec. 70. Minnesota Statutes 2008, section 356.215, subdivision 11, is amended to read:
31.10 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating 
31.11 	the level normal cost, the actuarial valuation of the retirement plan must contain an 
31.12 	exhibit for financial reporting purposes indicating the additional annual contribution 
31.13 	sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 
31.14 	for contribution determination purposes indicating the additional contribution sufficient 
31.15 	to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 
31.16 	subdivision 8, paragraph (c), the additional contribution must be calculated on a level 
31.17 	percentage of covered payroll basis by the established date for full funding in effect when 
31.18 	the valuation is prepared, assuming annual payroll growth at the applicable percentage 
31.19 	rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional 
31.20 	annual contribution must be calculated on a level annual dollar amount basis. 
31.21 	(b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 
31.22 	the general employees retirement plan of the Public Employees Retirement Association, 
31.23 	and the St. Paul Teachers Retirement Fund Association, if there has not been a change in 
31.24 	the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 
31.25 	change in the benefit plan governing annuities and benefits payable from the fund, a 
31.26 	change in the actuarial cost method used in calculating the actuarial accrued liability of all 
31.27 	or a portion of the fund, or a combination of the three, which change or changes by itself 
31.28 	or by themselves without inclusion of any other items of increase or decrease produce a 
31.29 	net increase in the unfunded actuarial accrued liability of the fund, the established date for 
31.30 	full funding is the first actuarial valuation date occurring after June 1, 2020.
31.31 	(c) For any retirement plan other than the Minneapolis Employees Retirement 
31.32 	Fund and the general employees retirement plan of the Public Employees Retirement 
31.33 	Association, if there has been a change in any or all of the actuarial assumptions used 
31.34 	for calculating the actuarial accrued liability of the fund, a change in the benefit plan 
31.35 	governing annuities and benefits payable from the fund, a change in the actuarial cost 
32.1 	method used in calculating the actuarial accrued liability of all or a portion of the fund, 
32.2 	or a combination of the three, and the change or changes, by itself or by themselves and 
32.3 	without inclusion of any other items of increase or decrease, produce a net increase in the 
32.4 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
32.5 	be determined using the following procedure:
32.6 	(i) the unfunded actuarial accrued liability of the fund must be determined in 
32.7 	accordance with the plan provisions governing annuities and retirement benefits and the 
32.8 	actuarial assumptions in effect before an applicable change;
32.9 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
32.10 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
32.11 	(i) by the established date for full funding in effect before the change must be calculated 
32.12 	using the interest assumption specified in subdivision 8 in effect before the change;
32.13 	(iii) the unfunded actuarial accrued liability of the fund must be determined in 
32.14 	accordance with any new plan provisions governing annuities and benefits payable from 
32.15 	the fund and any new actuarial assumptions and the remaining plan provisions governing 
32.16 	annuities and benefits payable from the fund and actuarial assumptions in effect before 
32.17 	the change;
32.18 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
32.19 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
32.20 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
32.21 	under item (iii) over a period of 30 years from the end of the plan year in which the 
32.22 	applicable change is effective must be calculated using the applicable interest assumption 
32.23 	specified in subdivision 8 in effect after any applicable change;
32.24 	(v) the level annual dollar or level percentage amortization contribution under item 
32.25 	(iv) must be added to the level annual dollar amortization contribution or level percentage 
32.26 	calculated under item (ii);
32.27 	(vi) the period in which the unfunded actuarial accrued liability amount determined 
32.28 	in item (iii) is amortized by the total level annual dollar or level percentage amortization 
32.29 	contribution computed under item (v) must be calculated using the interest assumption 
32.30 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
32.31 	integral number of years, but not to exceed 30 years from the end of the plan year in 
32.32 	which the determination of the established date for full funding using the procedure set 
32.33 	forth in this clause is made and not to be less than the period of years beginning in the 
32.34 	plan year in which the determination of the established date for full funding using the 
32.35 	procedure set forth in this clause is made and ending by the date for full funding in effect 
32.36 	before the change; and
33.1 	(vii) the period determined under item (vi) must be added to the date as of which 
33.2 	the actuarial valuation was prepared and the date obtained is the new established date 
33.3 	for full funding.
33.4 	(d) For the Minneapolis Employees Retirement Fund, the established date for full 
33.5 	funding is June 30, 2020.
33.6 	(e) For the general employees retirement plan of the Public Employees Retirement 
33.7 	Association, the established date for full funding is June 30, 2031.
33.8 	(f) For the Teachers Retirement Association, the established date for full funding is 
33.9 	June 30, 2037.
33.10 	(g) For the correctional state employees retirement plan of the Minnesota State 
33.11 	Retirement System, the established date for full funding is June 30, 2038.
33.12 	(h) For the judges retirement plan, the established date for full funding is June 
33.13 	30, 2038.
33.14 	(i) For the public employees police and fire retirement plan, the established date 
33.15 	for full funding is June 30, 2038.
33.16 	(j) For the St. Paul Teachers Retirement Fund Association, the established date for 
33.17 	full funding is June 30 of the 25th year from the valuation date. In addition to other 
33.18 	requirements of this chapter, the annual actuarial valuation shall contain an exhibit 
33.19 	indicating the funded ratio and the deficiency or sufficiency in annual contributions when 
33.20 	comparing liabilities to the market value of the assets of the fund as of the close of the 
33.21 	most recent fiscal year.
33.22 	(k) For the retirement plans for which the annual actuarial valuation indicates an 
33.23 	excess of valuation assets over the actuarial accrued liability, the valuation assets in 
33.24 	excess of the actuarial accrued liability must be recognized as a reduction in the current 
33.25 	contribution requirements by an amount equal to the amortization of the excess expressed 
33.26 	as a level percentage of pay over a 30-year period beginning anew with each annual 
33.27 	actuarial valuation of the plan.
33.28 	(l) In addition to calculating the unfunded actuarial accrued liability of the retirement 
33.29 	plan for financial reporting purposes under paragraphs (a) to (j), the actuarial valuation 
33.30 	of the retirement plan must also include a calculation of the unfunded actuarial accrued 
33.31 	liability of the retirement plan for purposes of determining the amortization contribution 
33.32 	sufficient to amortize the unfunded actuarial liability of the Minnesota Post Retirement 
33.33 	Investment Fund. For this exhibit, the calculation must be the unfunded actuarial accrued 
33.34 	liability net of the postretirement adjustment liability funded from the investment 
33.35 	performance of the Minnesota Post Retirement Investment Fund or the retirement benefit 
33.36 	fund.

34.1 	Sec. 71. Minnesota Statutes 2008, section 356.351, subdivision 2, is amended to read:
34.2 		Subd. 2.Incentive. (a) For an employee eligible under subdivision 1, if approved 
34.3 	under paragraph (b), the employer may provide an amount up to $17,000, to an employee 
34.4 	who terminates service, to be used: 
34.5 	(1) unless the appointing authority has designated the use under clause (2) or the use 
34.6 	under clause (3) for the initial retirement incentive applicable to that employing entity 
34.7 	under Laws 2007, chapter 134, after May 26, 2007, for deposit in the employee's account 
34.8 	in the health care savings plan established by section 352.98; 
34.9 	(2) notwithstanding section 352.01, subdivision 11, or 354.05, subdivision 13, 
34.10 	whichever applies, if the appointing authority has designated the use under this clause 
34.11 	for the initial retirement incentive applicable to that employing entity under Laws 2007, 
34.12 	chapter 134, after May 26, 2007, for purchase of service credit for unperformed service 
34.13 	sufficient to enable the employee to retire under section 352.116, subdivision 1, paragraph 
34.14 	(b); 353.30; 354.44, subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph 
34.15 	(b), whichever applies; or 
34.16 	(3) if the appointing authority has designated the use under this clause for the initial 
34.17 	retirement incentive applicable to the employing entity under Laws 2007, chapter 134, 
34.18 	after May 26, 2007, for purchase of a lifetime annuity or an annuity for a specific number 
34.19 	of years from the applicable retirement plan to provide additional benefits, as provided in 
34.20 	paragraph (d). 
34.21 	(b) Approval to provide the incentive must be obtained from the commissioner 
34.22 	of finance if the eligible employee is a state employee and must be obtained from the 
34.23 	applicable governing board with respect to any other employing entity. An employee is 
34.24 	eligible for the payment under paragraph (a), clause (2), if the employee uses money from 
34.25 	a deferred compensation account that, combined with the payment under paragraph (a), 
34.26 	clause (2), would be sufficient to purchase enough service credit to qualify for retirement 
34.27 	under section 352.116, subdivision 1, paragraph (b); 353.30, subdivision 1a; 354.44, 
34.28 	subdivision 6, paragraph (b), or 354A.31, subdivision 6, paragraph (b), whichever applies. 
34.29 	(c) The cost to purchase service credit under paragraph (a), clause (2), must be 
34.30 	made in accordance with section 356.551.
34.31 	(d) The annuity purchase under paragraph (a), clause (3), must be made using 
34.32 	annuity factors, as determined by the actuary retained under section 356.214, derived from 
34.33 	the applicable factors used by the applicable retirement plan to transfer amounts to the 
34.34 	Minnesota postretirement investment fund and to calculate optional annuity forms. The 
34.35 	purchased annuity must be the actuarial equivalent of the incentive amount.

35.1 	Sec. 72. [356.415] POSTRETIREMENT ADJUSTMENTS; STATEWIDE 
35.2 	RETIREMENT PLANS.
35.3 		Subdivision 1.Annual postretirement adjustments. (a) Retirement annuity, 
35.4 	disability benefit, or survivor benefit recipients of a covered retirement plan are entitled to 
35.5 	a postretirement adjustment annually on January 1, as follows:
35.6 	(1) a postretirement increase of 2.5 percent must be applied each year, effective 
35.7 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
35.8 	been receiving an annuity or a benefit for at least 12 full months prior to the January 1 
35.9 	increase; and
35.10 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
35.11 	benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent 
35.12 	for each month the person has been receiving an annuity or benefit must be applied, 
35.13 	effective January 1 following the year in which the person has been retired for less than 
35.14 	12 months.
35.15 	(b) The increases provided by this section commence on January 1, 2010.
35.16 	(c) An increase in annuity or benefit payments under this section must be made 
35.17 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
35.18 	executive director of the covered retirement plan requesting that the increase not be made.
35.19 	(d) The retirement annuity payable to a person who retires before becoming eligible 
35.20 	for Social Security benefits and who has elected the optional payment as provided in 
35.21 	section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain 
35.22 	retirement annuity and a life retirement annuity for the purposes of any postretirement 
35.23 	adjustment. The period certain retirement annuity plus the life retirement annuity must be 
35.24 	the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65, 
35.25 	or normal retirement age, as selected by the member at retirement, for an annuity amount 
35.26 	payable under section 354.35. A postretirement adjustment granted on the period certain 
35.27 	retirement annuity must terminate when the period certain retirement annuity terminates.
35.28 		Subd. 2.Covered retirement plans. The provisions of this section apply to the 
35.29 	following retirement plans:
35.30 	(1) the legislators retirement plan established under chapter 3A;
35.31 	(2) the correctional state employees retirement plan of the Minnesota State 
35.32 	Retirement System established under chapter 352;
35.33 	(3) the general state employees retirement plan of the Minnesota State Retirement 
35.34 	System established under chapter 352;
35.35 	(4) the State Patrol retirement plan established under chapter 352B;
35.36 	(5) the elective state officers retirement plan established under chapter 352C;
36.1 	(6) the general employee retirement plan of the Public Employees Retirement 
36.2 	Association established under chapter 353;
36.3 	(7) the public employees police and fire retirement plan of the Public Employees 
36.4 	Retirement Association established under chapter 353;
36.5 	(8) the local government correctional employees retirement plan of the Public 
36.6 	Employees Retirement Association established under chapter 353E;
36.7 	(9) the teachers retirement plan established under chapter 354; and
36.8 	(10) the judges retirement plan established under chapter 490.

36.9 	Sec. 73. Minnesota Statutes 2008, section 490.123, subdivision 1, is amended to read:
36.10 		Subdivision 1.Fund creation; revenue and authorized disbursements. (a) There 
36.11 	is created a special fund to be known as the "judges' retirement fund."
36.12 	(b) The judges' retirement fund must be credited with all contributions; all interest, 
36.13 	dividends, and other investment proceeds; and all other income authorized by this chapter 
36.14 	or other applicable law.
36.15 	(c) From this fund there are appropriated the payments authorized by this chapter, in 
36.16 	the amounts and at the times provided, including the necessary and reasonable expenses of 
36.17 	the Minnesota State Retirement System in administering the fund and the transfers to the 
36.18 	Minnesota postretirement investment fund.

36.19 	Sec. 74. Minnesota Statutes 2008, section 490.123, subdivision 3, is amended to read:
36.20 		Subd. 3.Investment. (a) The executive director of the Minnesota State Retirement 
36.21 	System shall, from time to time, certify to the State Board of Investment such portions 
36.22 	of the judges' retirement fund as in the director's judgment may not be required for 
36.23 	immediate use.
36.24 	(b) Assets from the judges' retirement fund must be transferred to the Minnesota 
36.25 	postretirement investment fund for retirement and disability benefits as provided in 
36.26 	sections 11A.18 and 352.119.
36.27 	(c)(b) The State Board of Investment shall thereupon invest and reinvest sums so 
36.28 	transferred, or certified, in such securities as are duly authorized legal investments for such 
36.29 	purposes under section 11A.24 in compliance with sections 356A.04 and 356A.06.

36.30 	Sec. 75. Minnesota Statutes 2008, section 490.124, is amended by adding a subdivision 
36.31 	to read:
36.32 		Subd. 14.Postretirement adjustment eligibility. A retirement annuity under 
36.33 	subdivision 1, 3, or 5, a disability benefit under subdivision 4, and a survivor's annuity 
37.1 	under subdivision 9 or 11 are eligible for postretirement adjustments under section 
37.2 	356.415.

37.3 	Sec. 76.  REPEALER.
 37.4 	Minnesota Statutes 2008, sections 11A.041; 11A.18; 11A.181; 352.119, subdivisions 
37.5 	2, 3, and 4; 352B.26, subdivisions 1 and 3; 353.271; 353A.02, subdivision 20; 353A.09, 
37.6 	subdivisions 2 and 3; 354.05, subdivision 26; 354.55, subdivision 14; 354.63; 356.41; 
37.7 	356.431, subdivision 2; 422A.01, subdivision 13; 422A.06, subdivision 4; and 490.123, 
37.8 	subdivisions 1c and 1e, are repealed.

37.9 	Sec. 77. EFFECTIVE DATE.
 37.10 	Sections 1 to 76 are effective July 1, 2009.