1.1                          A bill for an act 
  1.2             relating to retirement; authorizing the purchase of 
  1.3             service credit in the teachers retirement association; 
  1.4             providing an exemption from certain payment deadlines 
  1.5             for certain members of the teachers retirement 
  1.6             association. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
  1.9   PRIOR SERVICE CREDIT.] 
  1.10     Subdivision 1.  [ELIGIBILITY; INDEPENDENT SCHOOL DISTRICT 
  1.11  NO. 77 TEACHER.] (a) Notwithstanding any provision of Minnesota 
  1.12  Statutes, section 354.094, or other law to the contrary, an 
  1.13  eligible person described in paragraph (b) is entitled to obtain 
  1.14  allowable and formula service credit in the teachers retirement 
  1.15  association for the period described in paragraph (c) upon the 
  1.16  payment of the full service credit purchase amount specified in 
  1.17  subdivision 2. 
  1.18     (b) An eligible person is a person who was: 
  1.19     (1) born on June 23, 1946; 
  1.20     (2) granted an extended leave of absence from employment 
  1.21  under the teacher mobility program by independent school 
  1.22  district No. 77 on March 3, 1986, for the period July 1, 1986, 
  1.23  to June 30, 1989; and 
  1.24     (3) granted leave which was erroneously characterized in 
  1.25  the "other" category on the leave of absence report submitted to 
  1.26  the teachers retirement association. 
  2.1      (c) The period for service credit purchase is July 1, 1986, 
  2.2   to June 30, 1989. 
  2.3      Subd. 2.  [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit 
  2.4   under subdivision 1, there must be paid to the teachers 
  2.5   retirement association an amount equal to the present value, on 
  2.6   the date of payment, of the amount of the additional retirement 
  2.7   annuity obtained by purchase of the additional allowable and 
  2.8   formula service credit. 
  2.9      (b) Calculation of this amount must be made by the 
  2.10  executive director of the teachers retirement association using 
  2.11  the applicable preretirement interest rate specified in 
  2.12  Minnesota Statutes, section 356.215, subdivision 4d, and the 
  2.13  mortality table adopted for the coordinated program of the 
  2.14  retirement association.  The calculation must assume continuous 
  2.15  future service in the association until, and retirement at, the 
  2.16  age at which the minimum requirements of the retirement 
  2.17  association for normal retirement or retirement with an annuity 
  2.18  unreduced for retirement at an early age, including Minnesota 
  2.19  Statutes, section 356.30, are met with the additional service 
  2.20  credit purchased.  The calculation must also assume a future 
  2.21  salary history that includes annual salary increases at the 
  2.22  applicable salary increase rates specified in Minnesota 
  2.23  Statutes, section 356.215, subdivision 4d.  The present value 
  2.24  calculation must be reviewed by the consulting actuary retained 
  2.25  by the legislative commission on pensions and retirement. 
  2.26     (c) The eligible person must establish in the records of 
  2.27  the association proof of the leave of absence for which the 
  2.28  purchase of service credit is requested.  The manner of the 
  2.29  proof must be in accordance with procedures prescribed in 
  2.30  advance by the executive director of the teachers retirement 
  2.31  association and published in the State Register. 
  2.32     Subd. 3.  [PAYMENT RESPONSIBILITY; ADMINISTRATIVE 
  2.33  HEARING.] (a) In order to receive allowable and formula service 
  2.34  credit for the service credit purchase period specified in 
  2.35  subdivision 1, paragraph (c), the eligible person must pay the 
  2.36  member contribution equivalent amount specified in paragraph (b) 
  3.1   and the portion of the balance of the present value amount 
  3.2   determined to be the eligible person's responsibility under 
  3.3   paragraph (c).  The portion of the balance of the present value 
  3.4   amount determined to be the responsibility of a party other than 
  3.5   the eligible person under paragraph (c) must be paid by the 
  3.6   responsible party within 30 days of the date of payment by the 
  3.7   eligible person.  The executive director of the teachers 
  3.8   retirement association must notify the applicable parties of the 
  3.9   relevant payment amounts and payment dates. 
  3.10     (b) The member contribution equivalent amount is an amount 
  3.11  equal to the applicable employee contribution rate specified in 
  3.12  Minnesota Statutes, section 354.42, applied to the person's 
  3.13  actual salary rate in the year immediately preceding the 
  3.14  extended leave, plus 8.5 percent annually compounded interest 
  3.15  from June 30 of each year of the leave until payment is made.  
  3.16  Payment must be made in a lump sum.  Authority to make the 
  3.17  member contribution equivalent amount expires on September 1, 
  3.18  1997, or at the date of retirement, whichever is earlier. 
  3.19     (c) The teachers retirement association shall hold an 
  3.20  administrative hearing under Minnesota Statutes, sections 14.57 
  3.21  to 14.62, to determine the relative responsibility of the 
  3.22  eligible person, independent school district No. 77, and the 
  3.23  teachers retirement association for the error in classifying the 
  3.24  leave taken by the eligible person on the teachers retirement 
  3.25  association leave of absence report and the failure to 
  3.26  previously correct that reporting error.  The hearing must be 
  3.27  held before September 1, 1997.  The hearing must be conducted by 
  3.28  an administrative law judge, who shall question all persons with 
  3.29  pertinent information on the matter, establish the relevant 
  3.30  facts relating to the reporting error, and assign to the 
  3.31  eligible person, independent school district No. 77, and the 
  3.32  teachers retirement association the percentage of responsibility 
  3.33  for the reporting error and its continuation that applies.  The 
  3.34  percentage assigned by the administrative law judge governs the 
  3.35  payment obligation for the balance of the full actuarial cost 
  3.36  under paragraph (a). 
  4.1      Subd. 4.  [STATE SCHOOL AID ADJUSTMENT.] (a) Participation 
  4.2   by independent school district No. 77 in the administrative 
  4.3   hearing under subdivision 3 is a condition precedent for the 
  4.4   receipt by the school district of school year 1997-1998 state 
  4.5   education aid under Minnesota Statutes, section 124.12. 
  4.6      (b) If independent school district No. 77 is determined to 
  4.7   be responsible for any portion of the service credit grant 
  4.8   purchase payment, if the eligible person pays the person's 
  4.9   applicable portion of the payment amount, and if the school 
  4.10  district fails to pay its applicable portion of the payment 
  4.11  amount by the due date, the executive director of the teachers 
  4.12  retirement association shall immediately notify the commissioner 
  4.13  of finance of those facts, and the commissioner of finance shall 
  4.14  deduct the applicable amount from the next payment of state 
  4.15  education aid under Minnesota Statutes, section 124.12, to the 
  4.16  school district and transmit it to the teachers retirement 
  4.17  association. 
  4.18     Subd. 5.  [SERVICE CREDIT GRANT.] Service credit for the 
  4.19  purchase period may be granted to the account of the eligible 
  4.20  person only upon receipt of the full purchase payment amount 
  4.21  specified in subdivision 2. 
  4.22     Sec. 2.  [EFFECTIVE DATE.] 
  4.23     Section 1 is effective June 1, 1997.