1.1 	A bill for an act
1.2 	relating to retirement; general state employees retirement plan; correctional state 
1.3 	employees retirement plan; legislators retirement plan; judges retirement plan; 
1.4 	State Patrol retirement plan; increasing certain contribution rates; temporarily 
1.5 	reducing certain postretirement adjustment increase rates; reducing interest rates 
1.6 	on refunds; reducing deferred annuity augmentation rates; eliminating interest 
1.7 	on reemployed annuitant earnings limitation deferred accounts; increasing 
1.8 	certain vesting requirements; increasing certain early retirement reduction 
1.9 	rates; reducing certain benefit accrual rates; extending certain amortization 
1.10 	periods; amending Minnesota Statutes 2008, sections 3A.02, subdivision 
1.11 	4; 352.113, subdivision 1; 352.115, subdivision 1; 352.12, subdivision 2; 
1.12 	352.22, subdivisions 2, 3; 352.72, subdivisions 1, 2; 352.93, subdivisions 1, 
1.13 	2a, 3a; 352.931, subdivision 1; 352B.02, as amended; 352B.08, subdivisions 
1.14 	1, 2a; 352B.11, subdivision 2b; 352B.30, subdivisions 1, 2; 352F.07; 356.30, 
1.15 	subdivision 1; 356.302, subdivisions 3, 4, 5; 356.303, subdivision 2; 356.315, 
1.16 	subdivision 5; 356.47, subdivision 3; Minnesota Statutes 2009 Supplement, 
1.17 	sections 352.75, subdivision 4; 352.95, subdivision 2; 356.215, subdivision 11; 
1.18 	356.415, subdivision 1, by adding a subdivision.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	Section 1. Minnesota Statutes 2008, section 3A.02, subdivision 4, is amended to read:
1.21 		Subd. 4.Deferred annuities augmentation.  (a) The deferred retirement allowance 
1.22 	of any former legislator must be augmented as provided herein.
1.23 	(b) The required reserves applicable to the deferred retirement allowance, 
1.24 	determined as of the date the benefit begins to accrue using an appropriate mortality table 
1.25 	and an interest assumption of six percent, must be augmented from the first of the month 
1.26 	following the termination of active service, or July 1, 1973, whichever is later, to the first 
1.27 	day of the month in which the allowance begins to accrue, at the following annually 
1.28 	compounded rate or rates:
1.29 	(1) five percent until January 1, 1981;
2.1 	(2) three percent from January 1, 1981, or from the first day of the month following 
2.2 	the termination of active service, whichever is later, until January 1 of the year in which 
2.3 	the former legislator attains age 55 or until January 1, 2011, whichever is earlier; and
2.4 	(3) five percent from the period end date under clause (2) tountil the effective date 
2.5 	of retirement or until January 1, 2011, whichever is earlier; and
2.6 	(4) two percent after December 31, 2010.

2.7 	Sec. 2. Minnesota Statutes 2008, section 352.113, subdivision 1, is amended to read:
2.8 		Subdivision 1.Age and service requirements. (a) An employee covered by the 
2.9 	system, who is less than normal retirement age and who becomes totally and permanently 
2.10 	disabled after three or more years of allowable service if employed before July 1, 2010, or 
2.11 	after five or more years of allowable service if employed after June 30, 2010, is entitled to 
2.12 	a disability benefit in an amount provided in subdivision 3.
2.13 	(b) If the disabled employee's state service has terminated at any time, the employee 
2.14 	must have at least two years of allowable service after last becoming a state employee 
2.15 	covered by the system.
2.16 	(c) Refunds may be repaid under section 352.23 before the effective accrual date of 
2.17 	the disability benefit under subdivision 2. 

2.18 	Sec. 3. Minnesota Statutes 2008, section 352.115, subdivision 1, is amended to read:
2.19 		Subdivision 1.Age and service requirements. After separation from state service, 
2.20 	any employee (1) who has attained the age of at least 55 years and who is entitled to 
2.21 	credit for at least three years allowable service if employed before July 1, 2010, or after 
2.22 	five or more years of allowable service if employed after June 30, 2010, or (2) who has 
2.23 	received credit for at least 30 years allowable service regardless of age, is entitled upon 
2.24 	application to a retirement annuity.

2.25 	Sec. 4. Minnesota Statutes 2008, section 352.12, subdivision 2, is amended to read:
2.26 		Subd. 2.Surviving spouse benefit. (a) If an employee or former employee has 
2.27 	credit for at least three years allowable service if the employee was employed before July 
2.28 	1, 2010, or for at least five years of allowable service if the employee was employed 
2.29 	after June 30, 2010, and dies before an annuity or disability benefit has become payable, 
2.30 	notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the 
2.31 	employee may elect to receive, in lieu of the refund with interest under subdivision 1, an 
2.32 	annuity equal to the joint and 100 percent survivor annuity which the employee or former 
2.33 	employee could have qualified for on the date of death.
3.1 	(b) If the employee was under age 55 and has credit for at least 30 years of allowable 
3.2 	service on the date of death, the surviving spouse may elect to receive a 100 percent joint 
3.3 	and survivor annuity based on the age of the employee and surviving spouse on the date 
3.4 	of death. The annuity is payable using the full early retirement reduction under section 
3.5 	352.116, subdivision 1, paragraph (a), to age 55 and one-half of the early retirement 
3.6 	reduction from age 55 to the age payment begins. 
3.7 	(c) If the employee was under age 55 and has credit for at least three years of 
3.8 	allowable service credit on the date of death if the employee was employed before July 1, 
3.9 	2010, or for at least five years of allowable service if the employee was employed after 
3.10 	June 30, 2010, but did not yet qualify for retirement, the surviving spouse may elect 
3.11 	to receive a 100 percent joint and survivor annuity based on the age of the employee 
3.12 	and surviving spouse at the time of death. The annuity is payable using the full early 
3.13 	retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of 
3.14 	the early retirement reduction from age 55 to the age payment begins. 
3.15 	(d) The surviving spouse eligible for benefits under paragraph (a) may apply for the 
3.16 	annuity at any time after the date on which the employee or former employee would 
3.17 	have attained the required age for retirement based on the allowable service earned. 
3.18 	The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) 
3.19 	may apply for the annuity at any time after the employee's death. The annuity must be 
3.20 	computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 
3.21 	1a, and 3. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred 
3.22 	annuity or surviving spouse benefit payable under this subdivision. The annuity must cease 
3.23 	with the last payment received by the surviving spouse in the lifetime of the surviving 
3.24 	spouse, or upon expiration of a term certain benefit payment to a surviving spouse under 
3.25 	subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions 
3.26 	credited to the account of the deceased employee in excess of the total of the benefits paid 
3.27 	and payable to the surviving spouse must be paid to the deceased employee's or former 
3.28 	employee's last designated beneficiary or, if none, as specified under subdivision 1. 
3.29 	(e) Any employee or former employee may request in writing, with the signed 
3.30 	consent of the spouse, that this subdivision not apply and that payment be made only to a 
3.31 	designated beneficiary as otherwise provided by this chapter.

3.32 	Sec. 5. Minnesota Statutes 2008, section 352.22, subdivision 2, is amended to read:
3.33 		Subd. 2.Amount of refund. Except as provided in subdivision 3, the refund 
3.34 	payable to a person who ceased to be a state employee by reason of a termination of state 
3.35 	service is an amount equal to employee accumulated contributions plus interest at the rate 
4.1 	of six percent per year compounded daily from the date that the contribution was made 
4.2 	until June 30, 2011, or until the date on which the refund is paid, whichever is earlier, and 
4.3 	at the rate of four percent per year compounded daily from the date that the contribution 
4.4 	was made or from July 1, 2011, whichever is later, until the date on which the refund is 
4.5 	paid. Included with the refund is any interest paid as part of repayment of a past refund, 
4.6 	plus interest thereon from the date of repayment.

4.7 	Sec. 6. Minnesota Statutes 2008, section 352.22, subdivision 3, is amended to read:
4.8 		Subd. 3.Deferred annuity. (a) An employee who has at least three years of 
4.9 	allowable service if employed before July 1, 2010, or who has at least five years of 
4.10 	allowable service if employed after June 30, 2010, when termination occurs may elect 
4.11 	to leave the accumulated contributions in the fund and thereby be entitled to a deferred 
4.12 	retirement annuity. The annuity must be computed under the law in effect when state 
4.13 	service terminated, on the basis of the allowable service credited to the person before 
4.14 	the termination of service.
4.15 	(b) An employee on layoff or on leave of absence without pay, except a leave of 
4.16 	absence for health reasons, and who does not return to state service must have an annuity, 
4.17 	deferred annuity, or other benefit to which the employee may become entitled computed 
4.18 	under the law in effect on the employee's last working day.
4.19 	(c) No application for a deferred annuity may be made more than 60 days before 
4.20 	the time the former employee reaches the required age for entitlement to the payment of 
4.21 	the annuity. The deferred annuity begins to accrue no earlier than 60 days before the date 
4.22 	the application is filed in the office of the system, but not (1) before the date on which 
4.23 	the employee reaches the required age for entitlement to the annuity nor (2) before the 
4.24 	day following the termination of state service in a position which is not covered by the 
4.25 	retirement system.
4.26 	(d) Application for the accumulated contributions left on deposit with the fund may 
4.27 	be made at any time following the date of the termination of service.

4.28 	Sec. 7. Minnesota Statutes 2008, section 352.72, subdivision 1, is amended to read:
4.29 		Subdivision 1.Entitlement to annuity. (a) Any person who has been an employee 
4.30 	covered by a retirement system listed in paragraph (b) is entitled when qualified to an 
4.31 	annuity from each fund if total allowable service in all funds or in any two of these funds 
4.32 	totals three or more years if employed before July 1, 2010, or totals five or more years 
4.33 	if employed after June 30, 2010.
5.1 	(b) This section applies to the Minnesota State Retirement System, the Public 
5.2 	Employees Retirement Association including the Public Employees Retirement 
5.3 	Association police and fire fund, the Teachers Retirement Association, the State Patrol 
5.4 	Retirement Association, or any other public employee retirement system in the state with 
5.5 	a similar provision, except as noted in paragraph (c).
5.6 	(c) This section does not apply to other funds providing benefits for police officers 
5.7 	or firefighters.
5.8 	(d) No portion of the allowable service upon which the retirement annuity from 
5.9 	one fund is based shall be again used in the computation for benefits from another fund. 
5.10 	No refund may have been taken from any one of these funds since service entitling the 
5.11 	employee to coverage under the system or the employee's membership in any of the 
5.12 	associations last terminated. The annuity from each fund must be determined by the 
5.13 	appropriate provisions of the law except that the requirement that a person must have at 
5.14 	least threea specific number of years of allowable service in the respective system or 
5.15 	association does not apply for the purposes of this section if the combined service in two 
5.16 	or more of these funds equals three or more years at least the longest period of allowable 
5.17 	service of any of the applicable retirement plans.

5.18 	Sec. 8. Minnesota Statutes 2008, section 352.72, subdivision 2, is amended to read:
5.19 		Subd. 2.Computation of deferred annuity. (a) The deferred annuity, if any, 
5.20 	accruing under subdivision 1, or section 352.22, subdivision 3, must be computed as 
5.21 	provided in section 352.22, subdivision 3, on the basis of allowable service before 
5.22 	termination of state service and augmented as provided herein. The required reserves 
5.23 	applicable to a deferred annuity or to an annuity for which a former employee was eligible 
5.24 	but had not applied or to any deferred segment of an annuity must be determined as of 
5.25 	the date the benefit begins to accrue and augmented by interest compounded annually 
5.26 	from the first day of the month following the month in which the employee ceased to be 
5.27 	a state employee, or July 1, 1971, whichever is later, to the first day of the month in 
5.28 	which the annuity begins to accrue. The rates of interest used for this purpose must be 
5.29 	five percent compounded annually until January 1, 1981, and three percent compounded 
5.30 	annually thereafter until January 1 of the year following the year in which the former 
5.31 	employee attains age 55 or until January 1, 2011, whichever is earlier, and from that date
5.32 	the January 1 next following the attainment of age 55 to the effective date of retirement or 
5.33 	until January 1, 2011, whichever is earlier, the rate is five percent compounded annually if 
5.34 	the employee became an employee before July 1, 2006, and at 2.5 percent compounded 
5.35 	annually until January 1, 2011, if the employee becomes an employee after June 30, 2006, 
6.1 	and two percent compounded annually after December 31, 2010, irrespective of when the 
6.2 	employee became a state employee. If a person has more than one period of uninterrupted 
6.3 	service, the required reserves related to each period must be augmented by interest under 
6.4 	this subdivision. The sum of the augmented required reserves so determined is the present 
6.5 	value of the annuity. "Uninterrupted service" for the purpose of this subdivision means 
6.6 	periods of covered employment during which the employee has not been separated from 
6.7 	state service for more than two years. If a person repays a refund, the service restored by 
6.8 	the repayment must be considered continuous with the next period of service for which the 
6.9 	employee has credit with this system. The formula percentages used for each period of 
6.10 	uninterrupted service must be those applicable to a new employee. The mortality table 
6.11 	and interest assumption used to compute the annuity must be those in effect when the 
6.12 	employee files application for annuity. This section does not reduce the annuity otherwise 
6.13 	payable under this chapter. 
6.14 	(b) The retirement annuity or disability benefit of, or the survivor benefit payable on 
6.15 	behalf of, a former state employee who terminated service before July 1, 1997, which is 
6.16 	not first payable until after June 30, 1997, must be increased on an actuarial equivalent 
6.17 	basis to reflect the change in the postretirement interest rate actuarial assumption under 
6.18 	section 356.215, subdivision 8, from five percent to six percent under a calculation 
6.19 	procedure and the tables adopted by the board and approved by the actuary retained under 
6.20 	section 356.214. 

6.21 	Sec. 9. Minnesota Statutes 2009 Supplement, section 352.75, subdivision 4, is 
6.22 	amended to read:
6.23 		Subd. 4.Existing deferred retirees. Any former member of the former 
6.24 	Metropolitan Transit Commission-Transit Operating Division employees retirement 
6.25 	fund is entitled to a retirement annuity from the Minnesota State Retirement System if 
6.26 	the employee:
6.27 	(1) is not an active employee of the Transit Operating Division of the former 
6.28 	Metropolitan Transit Commission on July 1, 1978; (2) has at least ten years of active 
6.29 	continuous service with the Transit Operating Division of the former Metropolitan 
6.30 	Transit Commission as defined by the former Metropolitan Transit Commission-Transit 
6.31 	Operating Division employees retirement plan document in effect on December 31, 1977; 
6.32 	(3) has not received a refund of contributions; (4) has not retired or begun receiving an 
6.33 	annuity or benefit from the former Metropolitan Transit Commission-Transit Operating 
6.34 	Division employees retirement fund; (5) is at least 55 years old; and (6) submits a valid 
7.1 	application for a retirement annuity to the executive director of the Minnesota State 
7.2 	Retirement System.
7.3 	The person is entitled to a retirement annuity in an amount equal to the normal 
7.4 	old age retirement allowance calculated under the former Metropolitan Transit 
7.5 	Commission-Transit Operating Division employees retirement fund plan document in 
7.6 	effect on December 31, 1977, subject to an early retirement reduction or adjustment in 
7.7 	amount on account of retirement before the normal retirement age specified in that former 
7.8 	Metropolitan Transit Commission-Transit Operating Division employees retirement fund 
7.9 	plan document.
7.10 	The deferred retirement annuity of any person to whom this subdivision applies 
7.11 	must be augmented. The required reserves applicable to the deferred retirement annuity, 
7.12 	determined as of the date the allowance begins to accrue using an appropriate mortality 
7.13 	table and an interest assumption of five percent, must be augmented by interest at the 
7.14 	rate of five percent per year compounded annually from January 1, 1978, to January 1, 
7.15 	1981, and three percent per year compounded annually from January 1, 1981, until the 
7.16 	date that the annuity begins to accrue or June 30, 2010, whichever is earlier, and two 
7.17 	percent after June 30, 2010, to the first day of the month in which the annuity begins to 
7.18 	accrue. After the commencement of the retirement annuity, the annuity is eligible for 
7.19 	postretirement adjustments under section 356.415. On applying for a retirement annuity 
7.20 	under this subdivision, the person is entitled to elect a joint and survivor optional annuity 
7.21 	under section 352.116, subdivision 3. 

7.22 	Sec. 10. Minnesota Statutes 2008, section 352.93, subdivision 1, is amended to read:
7.23 		Subdivision 1.Basis of annuity; when to apply. After separation from state 
7.24 	service, an employee covered under section 352.91 who has reached age 55 years and has 
7.25 	credit for at least three years of covered correctional service or a combination of covered 
7.26 	correctional service and general state employees state retirement plan allowable service 
7.27 	if first employed as a state employee before July 1, 2010, or has credit for at least ten 
7.28 	years of covered correctional service or a combination of covered correctional service 
7.29 	and general state employees retirement plan allowable service if first employed as a state 
7.30 	employee after June 30, 2010, is entitled upon application to a retirement annuity under 
7.31 	this section, based only on covered correctional employees' service. Application may be 
7.32 	made no earlier than 60 days before the date the employee is eligible to retire by reason of 
7.33 	both age and service requirements.

7.34 	Sec. 11. Minnesota Statutes 2008, section 352.93, subdivision 2a, is amended to read:
8.1 		Subd. 2a.Early retirement. Any covered correctional employee who becomes at 
8.2 	least 50 years old and who has at least three years of allowable service if first employed 
8.3 	as a correctional state employee before July 1, 2010, or has credit for at least ten years 
8.4 	of allowable service if first employed as a correctional state employee after June 30, 
8.5 	2010, is entitled upon application to a reduced retirement annuity equal to the annuity 
8.6 	calculated under subdivision 2, reduced by two-tenths of one percent for each month that 
8.7 	the correctional employee is under age 55 at the time of retirement if first employed as 
8.8 	a correctional state employee before July 1, 2010, and if retired before July 1, 2015, or 
8.9 	reduced by 0.417 percent for each month that the correctional employee is under age 55 
8.10 	at the time of retirement if first employed as a correctional state employee after June 30, 
8.11 	2010, or if first employed as a correctional state employee before July 1, 2010, and if 
8.12 	retired after June 30, 2015.

8.13 	Sec. 12. Minnesota Statutes 2008, section 352.93, subdivision 3a, is amended to read:
8.14 		Subd. 3a.Optional annuities. The board may establish optional annuity forms to 
8.15 	pay a higher amount from the date of retirement until an employee is first eligible to draw 
8.16 	Social Security benefits, reaches age 65, or up toreaches the age the employee is eligible 
8.17 	to receive unreduced Social Security benefits, at which time the monthly benefits must be 
8.18 	reduced. The optional annuity forms must be actuarially equivalent to the normal single 
8.19 	life annuity form provided in subdivision 2. The optional annuity forms must be approved
8.20 	certified as actuarially equivalent by the actuary retained under section 356.214.

8.21 	Sec. 13. Minnesota Statutes 2008, section 352.931, subdivision 1, is amended to read:
8.22 		Subdivision 1.Surviving spouse benefit. (a) If the correctional employee was at 
8.23 	least age 50, has credit for at least three years of allowable service if first employed as 
8.24 	a correctional state employee before July 1, 2010, or has credit for at least ten years of 
8.25 	allowable service if first employed as a correctional state employee after June 30, 2010, 
8.26 	and dies before an annuity or disability benefit has become payable, notwithstanding any 
8.27 	designation of beneficiary to the contrary, the surviving spouse of the employee may 
8.28 	elect to receive, in lieu of the refund under section 352.12, subdivision 1, an annuity for 
8.29 	life equal to the joint and 100 percent survivor annuity which the employee could have 
8.30 	qualified for had the employee terminated service on the date of death. The election 
8.31 	may be made at any time after the date of death of the employee. The surviving spouse 
8.32 	benefit begins to accrue as of the first of the month next following the date on which 
8.33 	the application for the benefit was filed. 
9.1 	(b) If the employee was under age 50, dies, and had credit for at least three years 
9.2 	of allowable service credit on the date of death if first employed as a correctional state 
9.3 	employee before July 1, 2010, or had credit for at least ten years of allowable service on 
9.4 	the date of death if first employed as a correctional state employee after June 30, 2010, but 
9.5 	did not yet qualify for retirement, the surviving spouse may elect to receive a 100 percent 
9.6 	joint and survivor annuity based on the age of the employee and surviving spouse at the 
9.7 	time of death. The annuity is payable using the early retirement reduction under section 
9.8 	352.93, subdivision 2a, to age 50, and one-half of the early retirement reduction from age 
9.9 	50 to the age payment begins. The surviving spouse eligible for surviving spouse benefits 
9.10 	under this paragraph may apply for the annuity at any time after the employee's death. 
9.11 	Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply to a deferred annuity or 
9.12 	surviving spouse benefit payable under this subdivision. 
9.13 	(c) The annuity must cease with the last payment received by the surviving spouse 
9.14 	in the lifetime of the surviving spouse. Any employee may request in writing, with the 
9.15 	signed consent of the spouse, that this subdivision not apply and that payment be made 
9.16 	only to a designated beneficiary as otherwise provided by this chapter.

9.17 	Sec. 14. Minnesota Statutes 2009 Supplement, section 352.95, subdivision 2, is 
9.18 	amended to read:
9.19 		Subd. 2.Regular disability; computation of benefit. A covered correctional 
9.20 	employee who was hired before July 1, 2009, after rendering at least one year of covered 
9.21 	correctional service, or a covered correctional employee who was first hired after June 
9.22 	30, 2009, after rendering at least three years of covered correctional plan service if first 
9.23 	employed as a correctional state employee before July 1, 2010, or after rendering at least 
9.24 	ten years of covered correctional plan service if first employed as a correctional state 
9.25 	employee after June 30, 2010, and who is determined to have a regular disability, physical 
9.26 	or psychological, as defined under section 352.01, subdivision 17c, is entitled to a regular 
9.27 	disability benefit. The regular disability benefit must be based on covered correctional 
9.28 	service only. The regular disability benefit must be computed as provided in section 
9.29 	352.93, subdivisions 1 and 2. The regular disability benefit of a covered correctional 
9.30 	employee who was first hired before July 1, 2009, and who is determined to have a regular 
9.31 	disability, physical or psychological, under this subdivision must be computed as though 
9.32 	the employee had at least 15 years of covered correctional service.

10.1 	Sec. 15. Minnesota Statutes 2008, section 352B.02, as amended by Laws 2009, chapter 
10.2 	101, article 2, section 109; and chapter 169, article 1, section 23; article 2, section 16; and 
10.3 	article 4, sections 3 and 4, is amended to read:
10.4 	352B.02 STATE PATROL RETIREMENT FUND.
10.5 		Subdivision 1.Fund created; membership. A State Patrol retirement fund 
10.6 	is established. Its membership consists of all persons defined in section 352B.011, 
10.7 	subdivision 10. 
10.8 		Subd. 1a.Member contributions. (a) The member contribution is 10.40percent
10.9 	the following percentage of the member's salary.:

10.10
10.11		(1) before the first day of the first pay 
period beginning after July 1, 2011
	10.40 percent
	
10.12
10.13		(2) on or after the first day of the first 
pay period beginning after July 1, 2011
	11.20 percent
	
10.14 	(b) These contributions must be made by deduction from salary as provided in 
10.15 	section 352.04, subdivision 4.
10.16 		Subd. 1b.Salary deductions. Member contribution amounts must be deducted each 
10.17 	pay period by the department head, who shall have the total amount of the deductions paid 
10.18 	to the commissioner of management and budget for deposit in the State Patrol retirement 
10.19 	fund, and have a detailed report of all deductions made each pay period to the executive 
10.20 	director of the Minnesota State Retirement System.
10.21 		Subd. 1c.Employer contributions. (a) In addition to member contributions, 
10.22 	department heads shall pay a sum equal to 15.60percent the specified percentage of the 
10.23 	salary upon which deductions were made, which constitutes the employer contribution 
10.24 	to the fund. as follows:

10.25
10.26		(1) before the first day of the first pay 
period beginning after July 1, 2011
	15.60 percent
	
10.27
10.28		(2) on or after the first day of the first 
pay period beginning after July 1, 2011
	16.80 percent
	
10.29 	(b) Department contributions must be paid out of money appropriated to departments 
10.30 	for this purpose.
10.31 		Subd. 1d.Additional employer contributions. (a) In addition to the regular 
10.32 	employer contribution under subdivision 1c, department heads shall pay a sum equal to 
10.33 	ten percent of the salary upon which member contribution deductions were made, which is 
10.34 	the additional employer contribution to the fund.
10.35 	(b) Department additional employer contributions must be paid from departmental 
10.36 	appropriations or revenue.
11.1 		Subd. 1d 1e.Fund revenue and expenses. The amounts provided for in this section 
11.2 	must be credited to the State Patrol retirement fund. All money received must be deposited 
11.3 	by the commissioner of management and budget in the State Patrol retirement fund. The 
11.4 	fund must be used to pay the administrative expenses of the retirement fund, and the 
11.5 	benefits and annuities provided in this chapter. 
11.6 		Subd. 1e 1f.Audit; regular actuarial valuation; supplemental valuations. (a) 
11.7 	The legislative auditor shall audit the fund.
11.8 	(b) Any actuarial valuation of the fund required under section 356.215 must be 
11.9 	prepared by the actuary retained under section 356.214.
11.10 	(c) Any approved actuary retained by the executive director under section 352.03, 
11.11 	subdivision 6, may perform actuarial valuations and experience studies to supplement 
11.12 	those performed by the actuary retained under section 356.214. Any supplemental 
11.13 	actuarial valuation or experience studies must be filed with the executive director of the 
11.14 	Legislative Commission on Pensions and Retirement.

11.15 	Sec. 16. Minnesota Statutes 2008, section 352B.08, subdivision 1, is amended to read:
11.16 		Subdivision 1.Eligibility; when to apply; accrual. (a) Every member who is 
11.17 	credited with three or more years of allowable service if first employed before July 1, 
11.18 	2010, or with at least five years of allowable service if first employed after June 30, 2010, 
11.19 	is entitled to separate from state service and upon becoming 50 years old, is entitled to 
11.20 	receive a life annuity, upon separation from state service.
11.21 	(b) Members shallmust apply for an annuity in a form and manner prescribed by the 
11.22 	executive director.
11.23 	(c) No application may be made more than 90 days before the date the member is 
11.24 	eligible to retire by reason of both age and service requirements.
11.25 	(d) An annuity begins to accrue no earlier than 180 days before the date the 
11.26 	application is filed with the executive director.

11.27 	Sec. 17. Minnesota Statutes 2008, section 352B.08, subdivision 2a, is amended to read:
11.28 		Subd. 2a.Early retirement. Any member who has become at least 50 years old and 
11.29 	who has at least three years of allowable service if first employed before July 1, 2010, or 
11.30 	who has at least five years of allowable service if first employed after June 30, 2010, is 
11.31 	entitled upon application to a reduced retirement annuity equal to the annuity calculated 
11.32 	under subdivision 2, reduced by one-tenth of one percent for each month that the member 
11.33 	is under age 55 at the time of retirement if first employed before July 1, 2010, or reduced 
12.1 	by two-tenths of one percent for each month that the member is under age 55 at the time of 
12.2 	retirement if first employed after June 30, 2010.

12.3 	Sec. 18. Minnesota Statutes 2008, section 352B.11, subdivision 2b, is amended to read:
12.4 		Subd. 2b.Surviving spouse benefit eligibility. (a) If an active member with three or 
12.5 	more years of allowable service if first employed before July 1, 2010, or with at least five 
12.6 	years of allowable service if first employed after June 30, 2010, dies before attaining age 
12.7 	55, the surviving spouse is entitled to the benefit specified in subdivision 2c, paragraph (b).
12.8 	(b) If an active member with less than three years of allowable service if first 
12.9 	employed before July 1, 2010, or with fewer than five years of allowable service if first 
12.10 	employed after June 30, 2010, dies at any age, the surviving spouse is entitled to receive 
12.11 	the benefit specified in subdivision 2c, paragraph (c).
12.12 	(c) If an active member with three or more years of allowable service if first 
12.13 	employed before July 1, 2010, or with at least five years of allowable service if first 
12.14 	employed after June 30, 2010, dies on or after attaining exact age 55, the surviving spouse 
12.15 	is entitled to receive the benefits specified in subdivision 2c, paragraph (d).
12.16 	(d) If a disabilitant dies while receiving a disability benefit under section 352B.10 or 
12.17 	before the benefit under that section commenced, and an optional annuity was not elected 
12.18 	under section 352B.10, subdivision 5, the surviving spouse is entitled to receive the benefit 
12.19 	specified in subdivision 2c, paragraph (b).  
12.20 	(e) If a former member with three or more years of allowable service if first 
12.21 	employed before July 1, 2010, or with at least five years of allowable service if first 
12.22 	employed after June 30, 2010, who terminated from service and has not received a refund 
12.23 	or commenced receipt of any other benefit provided by this chapter, dies, the surviving 
12.24 	spouse is entitled to receive the benefit specified in subdivision 2c, paragraph (e).
12.25 	(f) If a former member with less than three years of allowable service if first 
12.26 	employed before July 1, 2010, or with fewer than five years of allowable service if first 
12.27 	employed after June 30, 2010, who terminated from service and has not received a refund 
12.28 	or commenced receipt of any other benefit, if applicable, provided by this chapter, dies, the 
12.29 	surviving spouse is entitled to receive the refund specified in subdivision 2c, paragraph (f).

12.30 	Sec. 19. Minnesota Statutes 2008, section 352B.30, subdivision 1, is amended to read:
12.31 		Subdivision 1.Entitlement to annuity. Any person who has been an employee 
12.32 	covered by the Minnesota State Retirement System, or a member of the Public Employees 
12.33 	Retirement Association including the Public Employees Retirement Association Police 
12.34 	and Fire Fund, or the Teachers Retirement Association, or the State Patrol retirement fund, 
13.1 	or any other public employee retirement system in Minnesota having a like provision but 
13.2 	excluding all other funds providing benefits for police or firefighters is entitled when 
13.3 	qualified to an annuity from each fund if total allowable service in all funds or in any two 
13.4 	of these funds totals three or morethe number of years of allowable service required by 
13.5 	the applicable retirement plan with the longest vesting period for the person. No part of 
13.6 	the allowable service upon which the retirement annuity from one fund is based may 
13.7 	again be used in the computation for benefits from another fund. The member must not 
13.8 	have taken a refund from any one of these funds since service entitling the member to 
13.9 	coverage under the system or membership in any of the associations last terminated. 
13.10 	The annuity from each fund must be determined by the appropriate law except that the 
13.11 	requirement that a person must have at least threea specific number of years allowable 
13.12 	service in the respective system or association does not apply for the purposes of this 
13.13 	section if the combined service in two or more of these funds equals three or morethe 
13.14 	number of years of allowable service required by the applicable retirement plan with 
13.15 	the longest vesting period for the person.

13.16 	Sec. 20. Minnesota Statutes 2008, section 352B.30, subdivision 2, is amended to read:
13.17 		Subd. 2.Computation of deferred annuity. Deferred annuities must be computed 
13.18 	according to this chapter on the basis of allowable service before termination of service 
13.19 	and augmented as provided in this chapter. The required reserves applicable to a deferred 
13.20 	annuity must be augmented by interest compounded annually from the first day of the 
13.21 	month following the month in which the member terminated service, or July 1, 1971, 
13.22 	whichever is later, to the first day of the month in which the annuity begins to accrue. The 
13.23 	rates of interest used for this purpose shallmust be five percent per year compounded 
13.24 	annually until January 1, 1981, and after that date three percent per year compounded 
13.25 	annually after January 1, 1981, until January 1, 2011, if the employee became an employee 
13.26 	before July 1, 2006, and at 2.5 percent compounded annually if the employee becomes 
13.27 	an employee after June 30, 2006, and two percent per year compounded annually after 
13.28 	December 31, 2010, irrespective of when the employee was first employed. The mortality 
13.29 	table and interest assumption used to compute the annuity shallmust be those in effect 
13.30 	when the member files application for annuity.

13.31 	Sec. 21. Minnesota Statutes 2008, section 352F.07, is amended to read:
13.32 	352F.07 EFFECT ON REFUND.
13.33 	Notwithstanding any provision of chapter 352 to the contrary, terminated hospital 
13.34 	employees may receive a refund of employee accumulated contributions plus interest 
14.1 	at the rate of six percent per year compounded annually in accordance with Minnesota 
14.2 	Statutes 1994, section 352.22, subdivision 2, at any time after the transfer of employment 
14.3 	to Fairview, University of Minnesota Physicians, or University Affiliated Family 
14.4 	Physicians. If a terminated hospital employee has received a refund from a pension plan 
14.5 	enumerated in section 356.30, subdivision 3, the person may not repay that refund unless 
14.6 	the person again becomes a member of one of those enumerated plans and complies 
14.7 	with section 356.30, subdivision 2.  

14.8 	Sec. 22. Minnesota Statutes 2009 Supplement, section 356.215, subdivision 11, 
14.9 	is amended to read:
14.10 		Subd. 11.Amortization contributions. (a) In addition to the exhibit indicating 
14.11 	the level normal cost, the actuarial valuation of the retirement plan must contain an 
14.12 	exhibit for financial reporting purposes indicating the additional annual contribution 
14.13 	sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit 
14.14 	for contribution determination purposes indicating the additional contribution sufficient 
14.15 	to amortize the unfunded actuarial accrued liability. For the retirement plans listed in 
14.16 	subdivision 8, paragraph (c), the additional contribution must be calculated on a level 
14.17 	percentage of covered payroll basis by the established date for full funding in effect when 
14.18 	the valuation is prepared, assuming annual payroll growth at the applicable percentage 
14.19 	rate set forth in subdivision 8, paragraph (c). For all other retirement plans, the additional 
14.20 	annual contribution must be calculated on a level annual dollar amount basis. 
14.21 	(b) For any retirement plan other than the Minneapolis Employees Retirement Fund, 
14.22 	the general employees retirement plan of the Public Employees Retirement Association, 
14.23 	the general state employees retirement plan of the Minnesota State Retirement System, 
14.24 	and the St. Paul Teachers Retirement Fund Association, if there has not been a change in 
14.25 	the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a 
14.26 	change in the benefit plan governing annuities and benefits payable from the fund, a 
14.27 	change in the actuarial cost method used in calculating the actuarial accrued liability of all 
14.28 	or a portion of the fund, or a combination of the three, which change or changes by itself 
14.29 	or by themselves without inclusion of any other items of increase or decrease produce a 
14.30 	net increase in the unfunded actuarial accrued liability of the fund, the established date for 
14.31 	full funding is the first actuarial valuation date occurring after June 1, 2020.
14.32 	(c) For any retirement plan other than the Minneapolis Employees Retirement 
14.33 	Fund and the general employees retirement plan of the Public Employees Retirement 
14.34 	Association, if there has been a change in any or all of the actuarial assumptions used 
14.35 	for calculating the actuarial accrued liability of the fund, a change in the benefit plan 
15.1 	governing annuities and benefits payable from the fund, a change in the actuarial cost 
15.2 	method used in calculating the actuarial accrued liability of all or a portion of the fund, 
15.3 	or a combination of the three, and the change or changes, by itself or by themselves and 
15.4 	without inclusion of any other items of increase or decrease, produce a net increase in the 
15.5 	unfunded actuarial accrued liability in the fund, the established date for full funding must 
15.6 	be determined using the following procedure:
15.7 	(i) the unfunded actuarial accrued liability of the fund must be determined in 
15.8 	accordance with the plan provisions governing annuities and retirement benefits and the 
15.9 	actuarial assumptions in effect before an applicable change;
15.10 	(ii) the level annual dollar contribution or level percentage, whichever is applicable, 
15.11 	needed to amortize the unfunded actuarial accrued liability amount determined under item 
15.12 	(i) by the established date for full funding in effect before the change must be calculated 
15.13 	using the interest assumption specified in subdivision 8 in effect before the change;
15.14 	(iii) the unfunded actuarial accrued liability of the fund must be determined in 
15.15 	accordance with any new plan provisions governing annuities and benefits payable from 
15.16 	the fund and any new actuarial assumptions and the remaining plan provisions governing 
15.17 	annuities and benefits payable from the fund and actuarial assumptions in effect before 
15.18 	the change;
15.19 	(iv) the level annual dollar contribution or level percentage, whichever is applicable, 
15.20 	needed to amortize the difference between the unfunded actuarial accrued liability amount 
15.21 	calculated under item (i) and the unfunded actuarial accrued liability amount calculated 
15.22 	under item (iii) over a period of 30 years from the end of the plan year in which the 
15.23 	applicable change is effective must be calculated using the applicable interest assumption 
15.24 	specified in subdivision 8 in effect after any applicable change;
15.25 	(v) the level annual dollar or level percentage amortization contribution under item 
15.26 	(iv) must be added to the level annual dollar amortization contribution or level percentage 
15.27 	calculated under item (ii);
15.28 	(vi) the period in which the unfunded actuarial accrued liability amount determined 
15.29 	in item (iii) is amortized by the total level annual dollar or level percentage amortization 
15.30 	contribution computed under item (v) must be calculated using the interest assumption 
15.31 	specified in subdivision 8 in effect after any applicable change, rounded to the nearest 
15.32 	integral number of years, but not to exceed 30 years from the end of the plan year in 
15.33 	which the determination of the established date for full funding using the procedure set 
15.34 	forth in this clause is made and not to be less than the period of years beginning in the 
15.35 	plan year in which the determination of the established date for full funding using the 
16.1 	procedure set forth in this clause is made and ending by the date for full funding in effect 
16.2 	before the change; and
16.3 	(vii) the period determined under item (vi) must be added to the date as of which 
16.4 	the actuarial valuation was prepared and the date obtained is the new established date 
16.5 	for full funding.
16.6 	(d) For the Minneapolis Employees Retirement Fund, the established date for full 
16.7 	funding is June 30, 2020.
16.8 	(e) For the general employees retirement plan of the Public Employees Retirement 
16.9 	Association, the established date for full funding is June 30, 2031.
16.10 	(f) For the Teachers Retirement Association, the established date for full funding is 
16.11 	June 30, 2037.
16.12 	(g) For the correctional state employees retirement plan of the Minnesota State 
16.13 	Retirement System, the established date for full funding is June 30, 2038.
16.14 	(h) For the judges retirement plan, the established date for full funding is June 
16.15 	30, 2038.
16.16 	(i) For the public employees police and fire retirement plan, the established date 
16.17 	for full funding is June 30, 2038.
16.18 	(j) For the St. Paul Teachers Retirement Fund Association, the established date for 
16.19 	full funding is June 30 of the 25th year from the valuation date. In addition to other 
16.20 	requirements of this chapter, the annual actuarial valuation shall contain an exhibit 
16.21 	indicating the funded ratio and the deficiency or sufficiency in annual contributions when 
16.22 	comparing liabilities to the market value of the assets of the fund as of the close of the 
16.23 	most recent fiscal year.
16.24 	(k) For the general state employees retirement plan of the Minnesota State 
16.25 	Retirement System, the established date for full funding is June 30, 2040.
16.26 	(l) For the retirement plans for which the annual actuarial valuation indicates an 
16.27 	excess of valuation assets over the actuarial accrued liability, the valuation assets in 
16.28 	excess of the actuarial accrued liability must be recognized as a reduction in the current 
16.29 	contribution requirements by an amount equal to the amortization of the excess expressed 
16.30 	as a level percentage of pay over a 30-year period beginning anew with each annual 
16.31 	actuarial valuation of the plan.

16.32 	Sec. 23. Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:
16.33 		Subdivision 1. Eligibility; computation of annuity. (a) Notwithstanding any 
16.34 	provisions of the laws governing the retirement plans enumerated in subdivision 3, a 
16.35 	person who has met the qualifications of paragraph (b) may elect to receive a retirement 
17.1 	annuity from each enumerated retirement plan in which the person has at least one-half 
17.2 	year of allowable service, based on the allowable service in each plan, subject to the 
17.3 	provisions of paragraph (c). 
17.4 	(b) A person may receive, upon retirement, a retirement annuity from each 
17.5 	enumerated retirement plan in which the person has at least one-half year of allowable 
17.6 	service, and augmentation of a deferred annuity calculated at the appropriate rate under 
17.7 	the laws governing each public pension plan or fund named in subdivision 3, based on 
17.8 	the date of the person's initial entry into public employment from the date the person 
17.9 	terminated all public service if: 
17.10 	(1) the person has allowable service totaling an amount that allows the person to 
17.11 	receive an annuity in any two or more of the enumerated plans; 
17.12 	(2) the person has sufficient allowable service in total that equals or exceeds the 
17.13 	applicable service credit vesting requirement of the retirement plan with the longest 
17.14 	applicable service credit vesting requirement; and 
17.15 	(2)(3) the person has not begun to receive an annuity from any enumerated plan or 
17.16 	the person has made application for benefits from each applicable plan and the effective 
17.17 	dates of the retirement annuity with each plan under which the person chooses to receive 
17.18 	an annuity are within a one-year period. 
17.19 	(c) The retirement annuity from each plan must be based upon the allowable service, 
17.20 	accrual rates, and average salary in the applicable plan except as further specified or 
17.21 	modified in the following clauses: 
17.22 	(1) the laws governing annuities must be the law in effect on the date of termination 
17.23 	from the last period of public service under a covered retirement plan with which the 
17.24 	person earned a minimum of one-half year of allowable service credit during that 
17.25 	employment; 
17.26 	(2) the "average salary" on which the annuity from each covered plan in which 
17.27 	the employee has credit in a formula plan must be based on the employee's highest five 
17.28 	successive years of covered salary during the entire service in covered plans; 
17.29 	(3) the accrual rates to be used by each plan must be those percentages prescribed by 
17.30 	each plan's formula as continued for the respective years of allowable service from one 
17.31 	plan to the next, recognizing all previous allowable service with the other covered plans; 
17.32 	(4) the allowable service in all the plans must be combined in determining eligibility 
17.33 	for and the application of each plan's provisions in respect to reduction in the annuity 
17.34 	amount for retirement prior to normal retirement age; and 
18.1 	(5) the annuity amount payable for any allowable service under a nonformula plan 
18.2 	of a covered plan must not be affected, but such service and covered salary must be used 
18.3 	in the above calculation. 
18.4 	(d) This section does not apply to any person whose final termination from the last 
18.5 	public service under a covered plan was before May 1, 1975. 
18.6 	(e) For the purpose of computing annuities under this section, the accrual rates 
18.7 	used by any covered plan, except the public employees police and fire plan, the judges 
18.8 	retirement fund, and the State Patrol retirement plan, must not exceed the percent specified 
18.9 	in section 356.315, subdivision 4, per year of service for any year of service or fraction 
18.10 	thereof. The formula percentage used by the judges retirement fund must not exceed the 
18.11 	percentage rate specified in section 356.315, subdivision 8, per year of service for any 
18.12 	year of service or fraction thereof. The accrual rate used by the public employees police 
18.13 	and fire plan and the State Patrol retirement plan must not exceed the percentage rate 
18.14 	specified in section 356.315, subdivision 6, per year of service for any year of service or 
18.15 	fraction thereof. The accrual rate or rates used by the legislators retirement plan must not 
18.16 	exceed 2.5 percent, but this limit does not apply to the adjustment provided under section 
18.17 	3A.02, subdivision 1, paragraph (c). 
18.18 	(f) Any period of time for which a person has credit in more than one of the covered 
18.19 	plans must be used only once for the purpose of determining total allowable service. 
18.20 	(g) If the period of duplicated service credit is more than one-half year, or the person 
18.21 	has credit for more than one-half year, with each of the plans, each plan must apply its 
18.22 	formula to a prorated service credit for the period of duplicated service based on a fraction 
18.23 	of the salary on which deductions were paid to that fund for the period divided by the total 
18.24 	salary on which deductions were paid to all plans for the period. 
18.25 	(h) If the period of duplicated service credit is less than one-half year, or when 
18.26 	added to other service credit with that plan is less than one-half year, the service credit 
18.27 	must be ignored and a refund of contributions made to the person in accord with that 
18.28 	plan's refund provisions. 

18.29 	Sec. 24. Minnesota Statutes 2008, section 356.302, subdivision 3, is amended to read:
18.30 		Subd. 3.General employee plan eligibility requirements. A disabled member 
18.31 	of a covered retirement plan who has credit for allowable service in a combination of 
18.32 	general employee retirement plans is entitled to a combined service disability benefit 
18.33 	if the member:
18.34 	(1) is less than the normal retirement age on the date of the application for the 
18.35 	disability benefit;
19.1 	(2) has become totally and permanently disabled;
19.2 	(3) has credit for allowable service in any combination of general employee 
19.3 	retirement plans totaling at least three years the number of years required by the applicable 
19.4 	retirement plan with the longest service credit requirement for disability benefit receipt;
19.5 	(4) has credit for at least one-half year of allowable service with the current general 
19.6 	employee retirement plan before the commencement of the disability;
19.7 	(5) has at least three continuous years of allowable service credit by the general 
19.8 	employee retirement plan or has at least a total of three years of allowable service credit 
19.9 	by a combination of general employee retirement plans in a 72-month period during 
19.10 	which no interruption of allowable service credit from a termination of employment 
19.11 	exceeded 29 days; and
19.12 	(6) was not receiving a retirement annuity or disability benefit from any covered 
19.13 	general employee retirement plan at the time of the commencement of the disability.

19.14 	Sec. 25. Minnesota Statutes 2008, section 356.302, subdivision 4, is amended to read:
19.15 		Subd. 4.Public safety plan eligibility requirements. A disabled member of a 
19.16 	covered retirement plan who has credit for allowable service in a combination of public 
19.17 	safety employee retirement plans is entitled to a combined service disability benefit if the 
19.18 	member:
19.19 	(1) has become occupationally disabled;
19.20 	(2) has credit for allowable service in any combination of public safety employee 
19.21 	retirement plans totaling at least one yearthe minimum period of service credit required by 
19.22 	the applicable retirement plan with the longest service credit eligibility requirement for the 
19.23 	receipt of a duty-related disability benefit if the disability is duty-related or totaling at least 
19.24 	three yearsthe minimum period of service credit required by the applicable retirement 
19.25 	plan with the longest service credit eligibility requirement for a disability benefit that is 
19.26 	not duty-related if the disability is not duty-related;
19.27 	(3) has credit for at least one-half year of allowable service with the current public 
19.28 	safety employee retirement plan before the commencement of the disability; and
19.29 	(4) was not receiving a retirement annuity or disability benefit from any covered 
19.30 	public safety employee retirement plan at the time of the commencement of the disability.

19.31 	Sec. 26. Minnesota Statutes 2008, section 356.302, subdivision 5, is amended to read:
19.32 		Subd. 5.General and public safety plan eligibility requirements. A disabled 
19.33 	member of a covered retirement plan who has credit for allowable service in a combination 
19.34 	of both a public safety employee retirement plan and general employee retirement plan 
20.1 	must meet the qualifying requirements in subdivisions 3 and 4 to receive a combined 
20.2 	service disability benefit from the applicable general employee and public safety 
20.3 	employee retirement plans, except that the person need only be a member of a covered 
20.4 	retirement plan at the time of the commencement of the disability, that the person must 
20.5 	have allowable service credit for the applicable retirement plan with the longest service 
20.6 	credit eligibility requirement for the receipt of a disability benefit, and that the minimum 
20.7 	allowable service requirements of subdivisions 3, clauses (3) and (5), and 4, clauses (3) 
20.8 	and (4), may be met in any combination of covered retirement plans.

20.9 	Sec. 27. Minnesota Statutes 2008, section 356.303, subdivision 2, is amended to read:
20.10 		Subd. 2.Entitlement; eligibility. Notwithstanding any provision of law to the 
20.11 	contrary governing a covered retirement plan, a person who is the survivor of a deceased 
20.12 	member of a covered retirement plan may receive a combined service survivor benefit 
20.13 	from each covered retirement plan in which the deceased member had credit for at least 
20.14 	one-half year of allowable service if the deceased member:
20.15 	(1) had credit for sufficient allowable service in any combination of covered 
20.16 	retirement plans to meet anythe minimum allowable service credit requirement of the 
20.17 	applicable covered retirement fund with the longest allowable service credit requirement 
20.18 	for qualification for a survivor benefit or annuity;
20.19 	(2) had credit for at least one-half year of allowable service with the most recent 
20.20 	covered retirement plan before the date of death and was an active member of that covered 
20.21 	retirement plan on the date of death; and
20.22 	(3) was not receiving a retirement annuity from any covered retirement plan on the 
20.23 	date of death.

20.24 	Sec. 28. Minnesota Statutes 2008, section 356.315, subdivision 5, is amended to read:
20.25 		Subd. 5.Correctional plan members. The applicable benefit accrual rate is 2.4 
20.26 	percent if employed as a correctional state employee before July 1, 2010, or 2.2 percent if 
20.27 	employed as a correctional state employee after June 30, 2010.

20.28 	Sec. 29. Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is 
20.29 	amended to read:
20.30 		Subdivision 1.Annual postretirement adjustments; generally. (a) Retirement 
20.31 	annuity, disability benefit, or survivor benefit recipients of a covered retirement plan 
20.32 	other than the legislators retirement plan, the general state employees retirement plan, the 
20.33 	correctional state employees retirement plan, the State Patrol retirement plan, the elected 
21.1 	state officers retirement plan, the unclassified state employees retirement program, and the 
21.2 	judges retirement plan are entitled to a postretirement adjustment annually on January 
21.3 	1, as follows:
21.4 	(1) a postretirement increase of 2.5 percent must be applied each year, effective 
21.5 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has 
21.6 	been receiving an annuity or a benefit for at least 12 full months prior to the January 1 
21.7 	increase; and
21.8 	(2) for each annuitant or benefit recipient who has been receiving an annuity or a 
21.9 	benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent 
21.10 	for each month that the person has been receiving an annuity or benefit must be applied, 
21.11 	effective on January 1 following the calendar year in which the person has been retired 
21.12 	for less than 12 months.
21.13 	(b) The increases provided by this section subdivision commence on January 1, 2010.
21.14 	(c) An increase in annuity or benefit payments under this section must be made 
21.15 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
21.16 	executive director of the covered retirement plan requesting that the increase not be made.
21.17 	(d) The retirement annuity payable to a person who retires before becoming eligible 
21.18 	for Social Security benefits and who has elected the optional payment as provided in 
21.19 	section 353.29, subdivision 6, or 354.35 must be treated as the sum of a period certain 
21.20 	retirement annuity and a life retirement annuity for the purposes of any postretirement 
21.21 	adjustment. The period certain retirement annuity plus the life retirement annuity must be 
21.22 	the annuity amount payable until age 62 for section 353.29, subdivision 6, or age 62, 65, 
21.23 	or normal retirement age, as selected by the member at retirement, for an annuity amount 
21.24 	payable under section 354.35. A postretirement adjustment granted on the period certain 
21.25 	retirement annuity must terminate when the period certain retirement annuity terminates.

21.26 	Sec. 30. Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding 
21.27 	a subdivision to read:
21.28 		Subd. 3.Annual postretirement adjustments; Minnesota State Retirement 
21.29 	System-administered plans. (a) Retirement annuity, disability benefit, or survivor benefit 
21.30 	recipients of the legislators retirement plan, the general state employees retirement plan, 
21.31 	the correctional state employees retirement plan, the State Patrol retirement plan, the 
21.32 	elected state officers retirement plan, the unclassified state employees retirement program, 
21.33 	and the judges retirement plan are entitled to a postretirement adjustment annually on 
21.34 	January 1, as follows:
22.1 	(1) a postretirement increase of two percent must be applied each year, effective on 
22.2 	January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who 
22.3 	has been receiving an annuity or a benefit for at least 12 full months before the January 1 
22.4 	increase; and
22.5 	(2) for each annuitant or benefit recipient who has been receiving an annuity or 
22.6 	a benefit for at least six full months, an annual postretirement increase of 1/12 of two 
22.7 	percent for each month that the person has been receiving an annuity or benefit must be 
22.8 	applied, effective January 1, following the calendar year in which the person has been 
22.9 	retired for at least six months, but has been retired for less than 12 months.
22.10 	(b) The increases provided by this subdivision commence on January 1, 2011. 
22.11 	Increases under this subdivision for the general state employees retirement plan, the 
22.12 	correctional state employees retirement plan, the State Patrol retirement plan, or the judges 
22.13 	retirement plan terminate on December 31 of the calendar year in which the actuarial 
22.14 	valuation prepared by the approved actuary under sections 356.214 and 356.215 and the 
22.15 	standards for actuarial work promulgated by the Legislative Commission on Pensions 
22.16 	and Retirement indicates that the market value of assets of the retirement plan equals or 
22.17 	exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases 
22.18 	under subdivision 1 recommence after that date. Increases under this subdivision for 
22.19 	the legislators retirement plan or the elected state officers retirement plan terminate 
22.20 	on December 31 of the calendar year in which the actuarial valuation prepared by the 
22.21 	approved actuary under sections 356.214 and 356.215 and the standards for actuarial work 
22.22 	promulgated by the Legislative Commission on Pensions and Retirement indicates that the 
22.23 	market value of assets of the general state employees retirement plan equals or exceeds 
22.24 	90 percent of the actuarial accrued liability of the retirement plan and increases under 
22.25 	subdivision 1 recommence after that date.
22.26 	(c) An increase in annuity or benefit payments under this subdivision must be made 
22.27 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
22.28 	executive director of the applicable covered retirement plan requesting that the increase 
22.29 	not be made.

22.30 	Sec. 31. Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:
22.31 		Subd. 3.Payment. (a) Beginning one year after the reemployment withholding 
22.32 	period ends relating to the reemployment that gave rise to the limitation, and the filing 
22.33 	of a written application, the retired member is entitled to the payment, in a lump sum, of 
22.34 	the value of the person's amount under subdivision 2, plus annual compound interest at. 
22.35 	For the general state employees retirement plan and for the correctional state employees 
23.1 	retirement plan, the annual interest rate is six percent from the date on which the amount 
23.2 	was deducted from the retirement annuity to the date of payment or until January 1, 2011, 
23.3 	whichever is earlier, and no interest after January 1, 2011. For retirement plans governed 
23.4 	by section 353.37; 354.44, subdivision 5; or 354A.31, subdivision 3, the annual interest is
23.5 	the compound annual rate of six percent from the date that the amount was deducted from 
23.6 	the retirement annuity to the date of payment.
23.7 	(b) The written application must be on a form prescribed by the chief administrative 
23.8 	officer of the applicable retirement plan.
23.9 	(c) If the retired member dies before the payment provided for in paragraph (a) is 
23.10 	made, the amount is payable, upon written application, to the deceased person's surviving 
23.11 	spouse, or if none, to the deceased person's designated beneficiary, or if none, to the 
23.12 	deceased person's estate.
23.13 	(d) In lieu of the direct payment of the person's amount under subdivision 2, on 
23.14 	or after the payment date under paragraph (a), if the federal Internal Revenue Code so 
23.15 	permits, the retired member may elect to have all or any portion of the payment amount 
23.16 	under this section paid in the form of a direct rollover to an eligible retirement plan as 
23.17 	defined in section 402(c) of the federal Internal Revenue Code that is specified by the 
23.18 	retired member. If the retired member dies with a balance remaining payable under this 
23.19 	section, the surviving spouse of the retired member, or if none, the deceased person's 
23.20 	designated beneficiary, or if none, the administrator of the deceased person's estate may 
23.21 	elect a direct rollover under this paragraph.

23.22 	Sec. 32. EFFECTIVE DATE.
 23.23 	Sections 1 to 31 are effective the day following final enactment.