1.1 	A bill for an act
1.2 	relating to retirement; statewide and major local
1.3 	retirement plans; modifying the manner for dividing
1.4 	public pension benefits as marital property in a
1.5 	marriage dissolution action; amending Minnesota
1.6 	Statutes 2004, sections 356.20, subdivision 4;
1.7 	356.215, subdivision 13; 518.58, subdivision 4;
1.8 	proposing coding for new law in Minnesota Statutes,
1.9 	chapter 356.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2004, section 356.20,
1.12 	subdivision 4, is amended to read:
1.13 		Subd. 4.Contents of financial report.  (a) The financial
1.14 	report required by this section must contain financial
1.15 	statements and disclosures that indicate the financial
1.16 	operations and position of the retirement plan and fund.  The
1.17 	report must conform with generally accepted governmental
1.18 	accounting principles, applied on a consistent basis.  The
1.19 	report must be audited.  The report must include, as part of its
1.20 	exhibits or footnotes, an actuarial disclosure item based on the
1.21 	actuarial valuation calculations prepared by the
1.22 	commission-retained actuary or by the actuary retained by the
1.23 	retirement fund or plan, if applicable, according to applicable
1.24 	actuarial requirements enumerated in section 356.215, and
1.25 	specified in the most recent standards for actuarial work
1.26 	adopted by the Legislative Commission on Pensions and
1.27 	Retirement.  The accrued assets, the accrued liabilities,
2.1 	including accrued reserves, and the unfunded actuarial accrued
2.2 	liability of the fund or plan must be disclosed.  The disclosure
2.3 	item must contain a declaration by the actuary retained by the
2.4 	Legislative Commission on Pensions and Retirement or the actuary
2.5 	retained by the fund or plan, whichever applies, specifying that
2.6 	the required reserves for any retirement, disability, or
2.7 	survivor benefits provided under a benefit formula are computed
2.8 	in accordance with the entry age actuarial cost method and with
2.9 	the most recent applicable standards for actuarial work adopted
2.10 	by the Legislative Commission on Pensions and Retirement.
2.11 	(b) Assets of the fund or plan contained in the disclosure
2.12 	item must include the following statement of the actuarial value
2.13 	of current assets as defined in section 356.215, subdivision 1:
2.14 	Value         Value
2.15 	at cost       at market
2.16 	Cash, cash equivalents, and
2.17 	short-term securities           .........     .........
2.18 	Accounts receivable               .........     .........
2.19 	Accrued investment income         .........     .........
2.20 	Fixed income investments          .........     .........
2.21 	Equity investments other
2.22 	than real estate                .........     .........
2.23 	Real estate investments           .........     .........
2.24 	Equipment                         .........     .........
2.25 	Equity in the Minnesota
2.26 	postretirement investment
2.27 	fund                            .........     .........
2.28 	Other                             .........     .........
2.29 	
2.30 	Total assets
2.31 	Value at cost                                 .........
2.32 	Value at market                               .........
2.33 	Value of current assets                       .........
2.34 	(c) The unfunded actuarial accrued liability of the fund or
2.35 	plan contained in the disclosure item must include the following
2.36 	measures of unfunded actuarial accrued liability, using the
3.1 	value of current assets:
3.2 	(1) unfunded actuarial accrued liability, determined by
3.3 	subtracting the current assets and the present value of future
3.4 	normal costs from the total current and expected future benefit
3.5 	obligations; and
3.6 	(2) unfunded pension benefit obligation, determined by
3.7 	subtracting the current assets from the actuarial present value
3.8 	of credited projected benefits.
3.9 	If the current assets of the fund or plan exceed the
3.10 	actuarial accrued liabilities, the excess must be disclosed and
3.11 	indicated as a surplus.
3.12 	(d) The pension benefit obligations schedule included in
3.13 	the disclosure must contain the following information on the
3.14 	benefit obligations:
3.15 	(1) the pension benefit obligation, determined as the
3.16 	actuarial present value of credited projected benefits on
3.17 	account of service rendered to date, separately identified as
3.18 	follows:
3.19 	(i) for annuitants;
3.20 	               retirement annuities for retired members;
3.21 	               retirement annuities for alternate payees;
3.22 	               disability benefits;
3.23 	               surviving spouse and child benefits;
3.24 	         (ii)  for former members without vested rights;
3.25 	         (iii) for deferred annuitants' benefits, including
3.26 	               any augmentation;
3.27 	         (iv)  for active employees;
3.28 	               accumulated employee contributions,
3.29 	               including allocated investment income;
3.30 	               employer-financed benefits vested;
3.31 	               employer-financed benefits nonvested;
3.32 	               total pension benefit obligation; and
3.33 	(2) if there are additional benefits not appropriately
3.34 	covered by the foregoing items of benefit obligations, a
3.35 	separate identification of the obligation.
3.36 	(e) Any additional statements or exhibits or more detailed
4.1 	or subdivided itemization of a disclosure item that will enable
4.2 	the management of the fund to portray a true interpretation of
4.3 	the fund's financial condition must be included in the
4.4 	additional statements or exhibits.

4.5 	Sec. 2. Minnesota Statutes 2004, section 356.215,
4.6 	subdivision 13, is amended to read:
4.7 		Subd. 13.Membership tabulation.  (a) The actuarial
4.8 	valuation must contain a tabulation of active membership and
4.9 	annuitants in the fund.  If the membership of a fund is under
4.10 	more than one general benefit program, a separate tabulation
4.11 	must be made for each general benefit program.
4.12 	(b) The tabulations must be prepared by the administration
4.13 	of the pension fund and must contain the following information:
4.14 	(1) Active members                               Number
4.15 	     As of last valuation date
4.16 	     New entrants
4.17 	     Total
4.18 	     Separations from active service
4.19 	     Refund of contributions
4.20 	     Separation with deferred annuity
4.21 	     Separation with neither refund
4.22 	          nor deferred annuity
4.23 	     Disability
4.24 	     Death
4.25 	     Retirement with service annuity
4.26 	Total separations
4.27 	     As of current valuation date
4.28 	(2) Annuitants                                   Number
4.29 	     As of last valuation date
4.30 	     New entrants annuitants 
4.31 	     Total
4.32 	     Terminations
4.33 	     Deaths
4.34 	     Other
4.35 	Total terminations
4.36 	     As of current valuation date
5.1 	(c) The tabulation required under paragraph (b), clause
5.2 	(2), must be made separately for each of the following classes
5.3 	of benefit recipients:
5.4 	(1) service retirement annuitants;
5.5 	(2) alternate payee annuitants;
5.6 	(3) disability benefit recipients;
5.7 	(3) (4) survivor benefit recipients; and
5.8 	(4) (5) deferred annuitants.

5.9 	Sec. 3. [356.48] MARRIAGE DISSOLUTION PUBLIC RETIREMENT
5.10 	ANNUITY DIVISION.
5.11 		Subdivision 1.Definitions. (a) For the purposes of this
5.12 	section, the terms defined in this subdivision have the meanings
5.13 	given them, unless the context clearly indicates otherwise.
5.14 	(b) "Alternate payee" means the person designated in a
5.15 	domestic relations order as a person to whom a portion or all of
5.16 	a participant's retirement annuity or service pension under the
5.17 	retirement plan is payable.
5.18 	(c) "Domestic relations order" means a judgment, decree, or
5.19 	order issued by a court of competent jurisdiction under a
5.20 	domestic relations law of any state or territory of the United
5.21 	States relating to a marriage that terminated after July 1,
5.22 	2005, and conforms to the requirements of subdivision 2.
5.23 	(d) "Participant" means an active member, a retired member,
5.24 	or a deferred member of a covered retirement plan.
5.25 	(e) "Retirement plan" means a covered retirement plan under
5.26 	subdivision 6.
5.27 		Subd. 2.Domestic relations order requirements. A
5.28 	domestic relations order must:
5.29 	(1) relate to a marriage that terminates after July 1,
5.30 	2005, except as provided in section 5;
5.31 	(2) assign all or a portion of the value of a participant's
5.32 	accumulated retirement coverage credited in a retirement plan
5.33 	under this section to a former spouse to satisfy a marriage
5.34 	dissolution marital property division obligation;
5.35 	(3) name the retirement plan and be submitted to the chief
5.36 	administrative officer of the retirement plan;
6.1 	(4) clearly specify the following information:
6.2 	(i) the name, last known mailing address, date of birth,
6.3 	and tax reporting identification numbers of the participant and
6.4 	the alternate payee; and 
6.5 	(ii) the percentage of the participant's benefits to be
6.6 	paid to the alternate payee, but not to exceed 100 percent;
6.7 	(5) not require a form of payment or any other benefit to
6.8 	the alternate payee that is not otherwise provided under the
6.9 	retirement plan;
6.10 	(6) not require the payment of benefits to an alternate
6.11 	payee which are required by a prior domestic relations order to
6.12 	be paid to another alternate payee or another person; and 
6.13 	(7) satisfy the requirements of an applicable rule
6.14 	established by the governing board of the retirement plan under
6.15 	chapter 14.
6.16 		Subd. 3.Domestic relations review order. (a) When the
6.17 	chief administrative officer of the retirement plan receives a
6.18 	domestic relations order, the administrative officer shall
6.19 	determine whether or not the document is a qualified domestic
6.20 	relations order.  The administrative officer shall promptly
6.21 	notify the participant and the alternate payee of that
6.22 	determination.
6.23 	(b) The chief administrative officer may place a
6.24 	restrictive hold on a participant's account for up to 90 days
6.25 	while the administrator determines the validity of the domestic
6.26 	relations order and processes the order.  The restrictive hold
6.27 	functions as a delay in processing any refund application or
6.28 	retirement annuity application.
6.29 	(c) The governing body of the retirement plan, the
6.30 	participant's employer, and the chief administrative officer of
6.31 	the retirement plan and any of their employees or agents are
6.32 	immune from civil liability for any act or omission directly
6.33 	resulting from implementing a domestic relations order and
6.34 	consistent with the order.
6.35 		Subd. 4.Division of benefits. (a) Notwithstanding any
6.36 	provision of law to the contrary, a participant's accumulated
7.1 	rights and benefits in a retirement plan may be divided by a
7.2 	court of competent jurisdiction under a qualified domestic
7.3 	relations order.  The qualified domestic relations order must
7.4 	provide for a division of marital property in connection with a
7.5 	marriage dissolution only as specified in this section.
7.6 	(b) If the participant is an active member or deferred
7.7 	member on the decree date, the division must be the percentages
7.8 	specified by the court, but not to exceed 100 percent in total,
7.9 	of the participant's allowable or formula service credit,
7.10 	whichever applies, on the day before the decree date.
7.11 	(c) If the participant is a retired member on the decree
7.12 	date, the division must be the percentages specified by the
7.13 	court, but not to exceed 100 percent in total, of the present
7.14 	value of the participant's retirement annuity, retirement
7.15 	allowance, or service pension, whichever applies, on the day
7.16 	before the decree date, calculated on the basis of the
7.17 	postretirement actuarial interest assumption and the retired
7.18 	life mortality assumption applicable to the retirement plan.
7.19 	(d) Upon division under this subdivision, the participant's
7.20 	account in the retirement plan must be reduced by the service
7.21 	credit amount or percent value amount transferred to the
7.22 	applicable alternate payee for all purposes except for
7.23 	eligibility to retire under section 352.116, subdivision 1,
7.24 	paragraph (a) or (b); 353.30, subdivision 1a or 1b; 354.44,
7.25 	subdivision 1 or 6, paragraph (c), clause (ii) or (iii); or
7.26 	354A.31, subdivision 6, paragraph (a) or (b).  An account must
7.27 	be established by the retirement plan for the alternate payee.
7.28 	The following must be credited to the alternate payee's account:
7.29 	(1) the amount of service credit transferred; and 
7.30 	(2) the applicable final salary or final average salary
7.31 	figure of the participant as of the day before the decree date
7.32 	if the participant was an active or deferred member on the
7.33 	decree date or the present value transferred if the participant
7.34 	was a retired member on the decree date.
7.35 		Subd. 5.Commencement of benefit payment to alternate
7.36 	payee. (a) Upon filing of a written application for a refund of
8.1 	member contributions, plus interest, the alternate payee is
8.2 	entitled to receive a refund of the member contributions
8.3 	attributable to the alternate payee under the domestic relations
8.4 	order.  If the domestic relations order does not allocate the
8.5 	member contributions allocated to the alternate payee, the
8.6 	contributions must be allocated for each fiscal year in the same
8.7 	percentage division as the total pension benefits divided as
8.8 	marital property.
8.9 	(b) Upon filing a written application for a benefit on or
8.10 	after the date on which the participant attains or would have
8.11 	attained the minimum age for the commencement of an annuity,
8.12 	allowance, or pension under the governing provisions of the
8.13 	retirement plan, the alternate payee is eligible to receive a
8.14 	benefit on the basis of the alternate payee's account.
8.15 	(c) For an alternate payee where service credit has been
8.16 	divided and transferred, the alternate payee's benefit must be
8.17 	determined based on the present value of portions of the
8.18 	participant's retirement annuity represented by the service
8.19 	credit transferred to the alternate payee.  For an alternate
8.20 	payee where the present value of a current annuity has been
8.21 	divided and transferred, the alternate payee's benefit must be
8.22 	determined based on the present value figures transferred.
8.23 	(d) Where service credit has been divided and transferred,
8.24 	the present value determination of the transferred portion of
8.25 	the participant's annuity, allowance, or pension must be made
8.26 	under the retirement plan governing laws in effect on the date
8.27 	of the domestic relations order, based on the final salary or
8.28 	final average salary credited to the alternate payee, and is
8.29 	subject to deferred annuity augmentation, if the retirement plan
8.30 	so provides, from the date of the domestic relations order to
8.31 	the date on which the benefit becomes payable, and based on the
8.32 	age of the participant as of the date of the domestic relations
8.33 	order.
8.34 	(e) The alternate payee benefit under paragraph (c) or (d)
8.35 	is payable as a single life annuity for the lifetime of the
8.36 	alternate payee and the alternate payee may elect an actuarial
9.1 	equivalent optional retirement annuity form.  The optional
9.2 	retirement annuity form must be one of the forms generally
9.3 	provided by the plan to newly retiring members.  Notwithstanding
9.4 	section 518.58, subdivision 4, the alternate payee benefit under
9.5 	paragraph (c) or (d) is also payable in a lump sum amount.
9.6 	(f) All present value determinations must be made using the
9.7 	postretirement actuarial interest assumptions applicable to the
9.8 	retirement plan, the retired life mortality assumption
9.9 	applicable to the retirement plan, and the alternate payee's age
9.10 	on the decree date.
9.11 		Subd. 6.Covered retirement plans. This section applies
9.12 	to the following retirement plans:
9.13 	(1) the general state employees retirement plan of the
9.14 	Minnesota State Retirement System, established under chapter
9.15 	352;
9.16 	(2) the correctional state employees retirement plan of the
9.17 	Minnesota State Retirement System, established under chapter
9.18 	352;
9.19 	(3) the unclassified employees retirement program,
9.20 	established under chapter 352D;
9.21 	(4) the State Patrol retirement fund, established under
9.22 	chapter 352B;
9.23 	(5) the legislators retirement plan, established under
9.24 	chapter 3A;
9.25 	(6) the elective state officers retirement plan,
9.26 	established under chapter 352C;
9.27 	(7) the general employees retirement plan of the Public
9.28 	Employees Retirement Association, established under chapter 353;
9.29 	(8) the public employees police and fire retirement plan of
9.30 	the Public Employees Retirement Association, established under
9.31 	chapter 353;
9.32 	(9) the local government correctional service retirement
9.33 	plan of the Public Employees Retirement Association, established
9.34 	under chapter 353E;
9.35 	(10) the Teachers Retirement Association, established under
9.36 	chapter 354;
10.1 	(11) the Minneapolis Employees Retirement Fund, established
10.2 	under chapter 422A;
10.3 	(12) the Minneapolis Teachers Retirement Fund Association,
10.4 	established under chapter 354A;
10.5 	(13) the St. Paul Teachers Retirement Fund Association,
10.6 	established under chapter 354A;
10.7 	(14) the Duluth Teachers Retirement Fund Association,
10.8 	established under chapter 354A;
10.9 	(15) the judges' retirement fund, established by sections
10.10 	490.121 to 490.132;
10.11 	(16) the Bloomington Firefighters Relief Association,
10.12 	established under Laws 1965, chapter 446, as amended;
10.13 	(17) the Fairmont Police Relief Association, established
10.14 	under Minnesota Statutes 2000, sections 423.41 to 423.62;
10.15 	(18) the Minneapolis Firefighters Relief Association,
10.16 	established under chapter 423C;
10.17 	(19) the Minneapolis Police Relief Association, established
10.18 	under chapter 423B; and 
10.19 	(20) the Virginia Fire Department Relief Association,
10.20 	established under Laws 1953, chapter 399, as amended.

10.21 	Sec. 4. Minnesota Statutes 2004, section 518.58,
10.22 	subdivision 4, is amended to read:
10.23 		Subd. 4.Pension plans.  (a) The division of marital
10.24 	property that represents pension plan benefits or rights in the
10.25 	form of future pension plan payments:
10.26 	(1) is payable only to the extent of the amount of the
10.27 	pension plan benefit payable under the terms of the plan;
10.28 	(2) is not payable for a period that exceeds the time that
10.29 	pension plan benefits are payable to the pension plan benefit
10.30 	recipient;
10.31 	(3) is not payable in a lump sum amount from pension plan
10.32 	assets attributable in any fashion to a spouse with the status
10.33 	of an active member, deferred retiree, or benefit recipient of a
10.34 	pension plan;
10.35 	(4) if the former spouse to whom the payments are to be
10.36 	made dies prior to the end of the specified payment period with
10.37 	the right to any remaining payments accruing to an estate or to
11.1 	more than one survivor, is payable only to a trustee on behalf
11.2 	of the estate or the group of survivors for subsequent
11.3 	apportionment by the trustee; and
11.4 	(5) in the case of public pension plan benefits or rights,
11.5 	may not commence until the public plan member submits a valid
11.6 	application for a public pension plan benefit and the benefit
11.7 	becomes payable attains the minimum age for receipt of a
11.8 	retirement annuity and is divided under section 356.48.
11.9 	(b) The individual retirement account plans established
11.10 	under chapter 354B may provide in its plan document, if
11.11 	published and made generally available, for an alternative
11.12 	marital property division or distribution of individual
11.13 	retirement account plan assets.  If an alternative division or
11.14 	distribution procedure is provided, it applies in place of
11.15 	paragraph (a), clause (5).

11.16 	Sec. 5. RETROACTIVE APPLICATION TO CERTAIN MARRIAGE
11.17 	DISSOLUTIONS.
 11.18 	(a) Notwithstanding any provision of Minnesota Statutes,
11.19 	section 356.48, to the contrary, the general state employees
11.20 	retirement plan of the Minnesota State Retirement System shall
11.21 	implement a domestic relations order from an eligible person
11.22 	described in paragraph (b).
11.23 	(b) An eligible person is a person:
11.24 	(1) who was born on August 12, 1944;
11.25 	(2) who resides in Edina, Minnesota; and 
11.26 	(3) whose marriage was dissolved on December 15, 1999.
11.27 	(c) An eligible person must provide adequate written
11.28 	documentation to the chief administrative officer to confirm
11.29 	that the eligibility requirements in paragraph (b) are met.

11.30 	Sec. 6. EFFECTIVE DATE.
 11.31 	Sections 1 to 5 are effective July 1, 2005.