1.1 	A bill for an act
1.2 	relating to retirement; various public pension plans;
1.3 	clarifying and revising various plan provisions;
1.4 	eliminating obsolete provisions; defining final
1.5 	average salary; modifying the definition of allowable
1.6 	service to include time on strike; permitting judges
1.7 	to purchase service credit for an authorized leave;
1.8 	requiring specified payments; clarifying references to
1.9 	actuarial services in determining actuarial
1.10 	equivalence; defining covered salary to include
1.11 	certain employer contributions to supplemental
1.12 	retirement plans; specifying itemized detail of plan
1.13 	administrative expenses in annual financial reporting;
1.14 	excluding police officers of the University of
1.15 	Minnesota from the public employees police and fire
1.16 	fund; clarifying collection procedures relating to
1.17 	charter schools; adding a uniform nonassignment and
1.18 	legal process exemption provision; providing for
1.19 	various member and employer contribution rate
1.20 	increases; adding employees of Bridges Medical
1.21 	Services, Hutchinson Area Health Care, and Northfield
1.22 	Hospital to privatization coverage; extending date for
1.23 	filing special law approval with the secretary of
1.24 	state for the RenVilla Nursing Home; requiring the
1.25 	privatization periodic filing of updated copies of
1.26 	articles of incorporation and bylaws; modifying a
1.27 	higher education individual retirement account plan
1.28 	investment option provision; implementing the
1.29 	recommendations of the Volunteer Firefighter Relief
1.30 	Association working group of the state auditor;
1.31 	modifying the trigger date for filing financial
1.32 	reports; revising the per firefighter financing
1.33 	requirements for monthly benefit service pensions;
1.34 	modifying the options for crediting interest on
1.35 	deferred service pensions; clarifying the deferred
1.36 	service pension options available to defined
1.37 	contribution plans; providing for the crediting of
1.38 	service during military service leaves; requiring the
1.39 	amortization of experience losses; clarifying the
1.40 	compliance requirements for the qualification for fire
1.41 	state aid; modifying a limit on mutual fund
1.42 	investments; clarifying corporate stock and
1.43 	exchange-traded funds investment authority; modifying
1.44 	the municipal representation requirements on relief
1.45 	association governing boards; clarifying exemptions
1.46 	from process and taxation; providing that certain laws
2.1 	do not apply to the consolidation of specified
2.2 	volunteer firefighter relief associations; providing
2.3 	an ad hoc postretirement adjustment to Eveleth police
2.4 	and fire trust fund benefit recipients; authorizing
2.5 	the Maplewood Firefighters Relief Association to
2.6 	transfer assets to the Oakdale Firefighters Relief
2.7 	Association to cover service credits earned by certain
2.8 	individuals; restructuring the statewide Teachers
2.9 	Retirement Fund Association fund and benefit plan;
2.10 	providing a special post retirement adjustment to
2.11 	certain pre-1969 teachers; changing deferred annuities
2.12 	augmentation for new retirement plan members; creating
2.13 	a public pension plan default insurance pool;
2.14 	increasing the maximum retirement plan covered salary
2.15 	figure; providing certain early retirement incentives;
2.16 	creating a task force to study creation of a statewide
2.17 	volunteer firefighter retirement plan; appropriating
2.18 	money; amending Minnesota Statutes 2004, sections
2.19 	3A.01, subdivisions 1, 2, 6, 8, by adding
2.20 	subdivisions; 3A.011; 3A.02, subdivisions 1, 1b, 3, 4,
2.21 	5; 3A.03, subdivisions 1, 2; 3A.04, subdivisions 1, 2,
2.22 	3, 4, by adding a subdivision; 3A.05; 3A.07; 3A.10,
2.23 	subdivision 1; 3A.12; 3A.13; 43A.17, subdivision 9;
2.24 	69.011, subdivision 2b, by adding a subdivision;
2.25 	69.021, subdivisions 5, 11; 69.051, subdivisions 1,
2.26 	1a; 69.33; 69.77, subdivision 4; 69.771; 69.772,
2.27 	subdivisions 3, 4; 69.773, subdivisions 4, 5; 69.775;
2.28 	352.01, subdivisions 2a, 4, 5, 12, 13, 21, 23, by
2.29 	adding a subdivision; 352.021, subdivisions 1, 2, 3,
2.30 	4; 352.04, subdivisions 1, 2, 3, 12; 352.041,
2.31 	subdivisions 1, 2, 3, 5; 352.115, subdivisions 2, 3;
2.32 	352.116, subdivision 1a; 352.15, subdivisions 1, 3, 4;
2.33 	352.22, subdivision 10; 352.72, subdivision 2; 352.87,
2.34 	subdivision 3; 352.91, by adding a subdivision;
2.35 	352.911, subdivision 5; 352.92, subdivisions 1, 2;
2.36 	352.93, subdivision 1; 352B.01, subdivisions 1, 2, 3,
2.37 	11; 352B.02, subdivisions 1a, 1c, 1d, 1e; 352B.071;
2.38 	352B.30, subdivision 2; 352C.021, by adding a
2.39 	subdivision; 352C.091, subdivision 1; 352C.10;
2.40 	352D.01; 352D.015, subdivisions 3, 4; 352D.02,
2.41 	subdivision 1; 352D.03; 352D.04, subdivision 2;
2.42 	352D.05, subdivision 4; 352D.085, subdivision 1;
2.43 	352D.09, subdivisions 5, 7; 352D.12; 353.01,
2.44 	subdivisions 6, 10, 14, 32, 33, by adding a
2.45 	subdivision; 353.025; 353.026; 353.027; 353.028;
2.46 	353.14; 353.15, subdivisions 1, 3; 353.27,
2.47 	subdivisions 1, 2, 3, 3a, 11, by adding a subdivision;
2.48 	353.271; 353.28, subdivisions 5, 6; 353.29,
2.49 	subdivision 3; 353.30, subdivision 5; 353.31,
2.50 	subdivision 1c; 353.32, subdivision 9; 353.33,
2.51 	subdivisions 3, 12; 353.64, by adding a subdivision;
2.52 	353.65, subdivisions 2, 3, 6; 353.651, subdivision 3;
2.53 	353.656, subdivision 1; 353.71, subdivision 2;
2.54 	353B.02, subdivision 10; 353E.01, subdivision 5;
2.55 	353E.05; 353F.02, subdivision 4; 354.05, subdivisions
2.56 	2, 7, 13, 35, by adding a subdivision; 354.091;
2.57 	354.094, subdivision 1; 354.10, subdivisions 1, 3, 4;
2.58 	354.33, subdivision 5; 354.39; 354.41, subdivision 2;
2.59 	354.42, subdivisions 2, 3, by adding subdivisions;
2.60 	354.44, subdivisions 2, 6; 354.55, subdivision 11;
2.61 	354A.011, subdivisions 3a, 15a, 24, 27, by adding a
2.62 	subdivision; 354A.021, subdivisions 1, 4, 5, by adding
2.63 	a subdivision; 354A.092; 354A.093, subdivision 1;
2.64 	354A.095; 354A.096; 354A.097, subdivision 1; 354A.12,
2.65 	subdivisions 1, 2, 2a, 3a, 3b, 3c, 3d; 354A.30;
2.66 	354A.31, subdivisions 4, 4a, 5, 7; 354A.32,
2.67 	subdivision 1; 354A.37, subdivision 2; 354A.39;
2.68 	354A.40, subdivision 1; 354A.41; 354B.21, subdivisions
2.69 	2, 3; 354B.25, subdivision 2; 355.01, subdivision 3e;
2.70 	356.20, subdivisions 2, 4; 356.214, subdivision 1;
2.71 	356.215, subdivisions 8, 11; 356.216; 356.24,
3.1 	subdivision 1; 356.30, subdivisions 1, 3; 356.302,
3.2 	subdivision 7; 356.303, subdivision 4; 356.315, by
3.3 	adding a subdivision; 356.42, subdivision 3; 356.465,
3.4 	subdivision 3; 356.47, subdivision 3; 356.551;
3.5 	356.611, subdivision 1; 356.65, subdivision 2;
3.6 	356A.06, subdivision 7; 383B.46, subdivision 2;
3.7 	383B.47; 383B.48; 383B.49; 422A.01, subdivisions 6,
3.8 	11, by adding subdivisions; 422A.05, subdivision 2c;
3.9 	422A.06, subdivisions 3, 5, 7, 8; 422A.10,
3.10 	subdivisions 1, 2; 422A.101, subdivision 3; 422A.15,
3.11 	subdivision 1; 422A.16, subdivision 9; 422A.22,
3.12 	subdivisions 1, 3, 4, 6; 422A.231; 422A.24; 423A.02,
3.13 	subdivision 1b; 423B.01, by adding a subdivision;
3.14 	423B.05, subdivision 3; 423B.09, subdivision 1, by
3.15 	adding a subdivision; 423B.10, subdivision 1; 423B.17;
3.16 	423C.01, by adding a subdivision; 423C.05, subdivision
3.17 	2; 423C.09; 424A.02, subdivisions 3, 4, 7; 424A.04,
3.18 	subdivision 1; 424B.10, subdivision 1; 471A.10;
3.19 	490.121, subdivisions 1, 4, 6, 7, 13, 14, 15, 20, 21,
3.20 	22, by adding subdivisions; 490.122; 490.123,
3.21 	subdivisions 1, 1a, 1b, 1c, 2, 3; 490.124,
3.22 	subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13;
3.23 	490.125, subdivisions 1, 2; 490.126; 490.133; 525.05;
3.24 	Laws 1999, chapter 222, article 16, section 16, as
3.25 	amended; Laws 2000, chapter 461, article 4, section 4,
3.26 	as amended; Laws 2004, chapter 267, article 12,
3.27 	section 4; proposing coding for new law in Minnesota
3.28 	Statutes, chapters 128D; 352C; 354; 356; 383B; 423C;
3.29 	424A; proposing coding for new law as Minnesota
3.30 	Statutes, chapter 490A; repealing Minnesota Statutes
3.31 	2004, sections 3A.01, subdivisions 3, 4, 6a, 7; 3A.02,
3.32 	subdivision 2; 3A.04, subdivision 1a; 3A.09; 352.119,
3.33 	subdivision 1; 352.15, subdivision 1a; 352C.01;
3.34 	352C.011; 352C.021; 352C.031; 352C.033; 352C.04;
3.35 	352C.051; 352C.09; 352C.091, subdivisions 2, 3;
3.36 	353.15, subdivision 2; 353.29, subdivision 2; 353.34,
3.37 	subdivision 3b; 353.36, subdivisions 2, 2a, 2b, 2c;
3.38 	353.46, subdivision 4; 353.651, subdivision 2;
3.39 	353.663; 353.74; 353.75; 354.10, subdivision 2;
3.40 	354.59; 354A.051; 354A.105; 354A.23, subdivision 1;
3.41 	354A.28; 422A.101, subdivision 4; 422A.22,
3.42 	subdivisions 2, 5; 422A.221; 490.021; 490.025;
3.43 	490.101; 490.102; 490.103; 490.105; 490.106; 490.107;
3.44 	490.108; 490.109; 490.1091; 490.12; 490.121,
3.45 	subdivisions 2, 3, 5, 8, 9, 10, 11, 12, 16, 17, 18,
3.46 	19, 20; 490.124, subdivision 6; 490.132; 490.15;
3.47 	490.16; 490.18.
3.48 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
3.49 	2005 OMNIBUS RETIREMENT BILL

3.50 	ARTICLE 1
3.51 	CLARIFICATION AND RECODIFICATION OF
3.52 	STATEWIDE SPECIALTY RETIREMENT PLANS

3.53 	Section 1. Minnesota Statutes 2004, section 3A.01,
3.54 	subdivision 1, is amended to read:
3.55 		Subdivision 1.Purposes. Each of the terms defined in
3.56 	this section,for the purposes of this chapter shall be
3.57 	given has the meanings meaning ascribed to them.

3.58 	Sec. 2. Minnesota Statutes 2004, section 3A.01, is amended
3.59 	by adding a subdivision to read:
4.1 		Subd. 1a.Actuarial equivalent. "Actuarial equivalent"
4.2 	means the condition of one allowance or benefit having an equal
4.3 	actuarial present value to another allowance or benefit,
4.4 	determined by the actuary retained under section 356.214 as of a
4.5 	given date at a specified age with each actuarial present value
4.6 	based on the mortality table applicable for the plan and
4.7 	approved under section 356.215, subdivision 18, and using the
4.8 	applicable preretirement or postretirement interest rate
4.9 	assumption specified in section 356.215, subdivision 8.

4.10 	Sec. 3. Minnesota Statutes 2004, section 3A.01, is amended
4.11 	by adding a subdivision to read:
4.12 		Subd. 1b.Average monthly salary. "Average monthly
4.13 	salary" means the average of the member's highest five
4.14 	successive years of salary that was received as a member of the
4.15 	legislature and upon which the member has made contributions
4.16 	under section 3A.03, subdivision 1, or for which the member of
4.17 	the legislature has made payments for past service under
4.18 	Minnesota Statutes 2004, section 3A.02, subdivision 2, or has
4.19 	made, before July 1, 1994, payments in lieu of contributions
4.20 	under Minnesota Statutes 1992, section 3A.031.

4.21 	Sec. 4. Minnesota Statutes 2004, section 3A.01, is amended
4.22 	by adding a subdivision to read:
4.23 		Subd. 1c.Constitutional officer. "Constitutional
4.24 	officer" means a person who was duly elected, qualifies for, and
4.25 	serves as the governor, the lieutenant governor, the attorney
4.26 	general, the secretary of state, or the state auditor of the
4.27 	state of Minnesota.

4.28 	Sec. 5. Minnesota Statutes 2004, section 3A.01,
4.29 	subdivision 2, is amended to read:
4.30 		Subd. 2.Dependent child. (a) "Dependent child" means
4.31 	any natural or adopted child of a deceased member of the
4.32 	legislature or a former legislator who is under the age of 18,
4.33 	or who is under the age of 22 and is a full-time student, and
4.34 	who,in either case,is unmarried and was actually dependent for
4.35 	more than one-half of support upon such the legislator for a
4.36 	period of at least 90 days immediately prior to before the
5.1 	legislator's death. It 
5.2 	(b) The term also includes any child of the member of the
5.3 	legislature or former legislator who was conceived during the
5.4 	lifetime of, and who was born after the death of, the member or
5.5 	former legislator. This subdivision shall be retroactive as to
5.6 	any dependent child under the age of 22 years as of April 1,
5.7 	1975.

5.8 	Sec. 6. Minnesota Statutes 2004, section 3A.01,
5.9 	subdivision 6, is amended to read:
5.10 		Subd. 6.Director.  "Director" means the executive
5.11 	director of the Minnesota State Retirement System who was
5.12 	appointed under section 352.03, subdivision 5.

5.13 	Sec. 7. Minnesota Statutes 2004, section 3A.01, is amended
5.14 	by adding a subdivision to read:
5.15 		Subd. 6b.Former legislator. "Former legislator" means a
5.16 	legislator who has ceased to be a member of the legislature for
5.17 	any reason, including, but not limited to, the expiration of the
5.18 	term for which a member of the legislature was elected or the
5.19 	death of the member.

5.20 	Sec. 8. Minnesota Statutes 2004, section 3A.01, is amended
5.21 	by adding a subdivision to read:
5.22 		Subd. 6c.Member of the legislature. "Member of the
5.23 	legislature" means a person who was a member of the house of
5.24 	representatives or of the senate of the state of Minnesota who
5.25 	has subscribed to the oath of office after July 1, 1965, and who
5.26 	was first elected to a legislative office before July 1, 1997,
5.27 	and retained coverage by the plan under Laws 1997, chapter 233,
5.28 	article 2, section 15.

5.29 	Sec. 9. Minnesota Statutes 2004, section 3A.01,
5.30 	subdivision 8, is amended to read:
5.31 		Subd. 8.Normal retirement age.  "Normal retirement age"
5.32 	means the age of 60 years with regard to any member of the
5.33 	legislature whose service terminates prior to the beginning of
5.34 	the 1981 legislative session, and the age of 62 years with
5.35 	regard to any member of the legislature whose service terminates
5.36 	after the beginning of the 1981 session.

6.1 	Sec. 10. Minnesota Statutes 2004, section 3A.01, is
6.2 	amended by adding a subdivision to read:
6.3 		Subd. 9.Retirement. "Retirement" means the period of
6.4 	time after which a former legislator is entitled to a retirement
6.5 	allowance.

6.6 	Sec. 11. Minnesota Statutes 2004, section 3A.01, is
6.7 	amended by adding a subdivision to read:
6.8 		Subd. 10.Salary. (a) "Salary" means the regular
6.9 	compensation payable under law to a member of the legislature
6.10 	and paid to the person for service as a legislator.
6.11 	(b) The term includes the monthly compensation paid to the
6.12 	member of the legislature and the per diem payments paid during
6.13 	a regular or special session to the member of the legislature.
6.14 	(c) The term does not include per diem payments paid to a
6.15 	member of the legislature other than during the regular or
6.16 	special session; additional compensation attributable to a
6.17 	leadership position under section 3.099, subdivision 3; living
6.18 	expense payments under section 3.101; and special session living
6.19 	expense payments under section 3.103.

6.20 	Sec. 12. Minnesota Statutes 2004, section 3A.011, is
6.21 	amended to read:
6.22 	3A.011 ADMINISTRATION OF PLAN.
6.23 	The executive director and the board of directors of the 
6.24 	Minnesota State Retirement System shall administer the
6.25 	legislators retirement plan in accordance with this chapter and 
6.26 	chapter 356A.

6.27 	Sec. 13. Minnesota Statutes 2004, section 3A.02,
6.28 	subdivision 1, is amended to read:
6.29 		Subdivision 1.Qualifications.  (a) A former legislator
6.30 	is entitled, upon written application to the director, to
6.31 	receive a retirement allowance monthly, if the person:
6.32 	(1) has either served at least six full years, without
6.33 	regard to the application of section 3A.10, subdivision 2, or
6.34 	has served during all or part of four regular sessions as a
6.35 	member of the legislature, which service need not be continuous;
6.36 	(2) has attained the normal retirement age;
7.1 	(3) has retired as a member of the legislature; and
7.2 	(4) has made all contributions provided for in section
7.3 	3A.03, has made payments for past service under subdivision 2,
7.4 	or has made payments in lieu of contributions under Minnesota
7.5 	Statutes 1992, section 3A.031, prior to before July 1, 1994.
7.6 	(b) This paragraph applies to members of the legislature
7.7 	who terminate service as a legislator before July 1, 1997.  For
7.8 	service rendered before the beginning of the 1979 legislative
7.9 	session, but not to exceed eight years of service, the
7.10 	retirement allowance is an amount equal to five percent per year
7.11 	of service of that member's average monthly salary.  For service
7.12 	in excess of eight years rendered before the beginning of the
7.13 	1979 legislative session, and for service rendered after the
7.14 	beginning of the 1979 legislative session,Unless the former
7.15 	legislator has legislative service before January 1, 1979,the
7.16 	retirement allowance is an amount equal to 2-1/2 percent per
7.17 	year of service of that member's average monthly salary.
7.18 	(c) This paragraph applies to members of the legislature
7.19 	who terminate service as a legislator after June 30, 1997.  The
7.20 	retirement allowance is an amount equal to the applicable rate
7.21 	or rates under paragraph (b) per year of service of the member's
7.22 	average monthly salary and adjusted for that person on an
7.23 	actuarial equivalent basis to reflect the change in the
7.24 	postretirement interest rate actuarial assumption under section
7.25 	356.215, subdivision 8, from five percent to six percent.  The
7.26 	adjustment must be calculated by or, alternatively, the
7.27 	adjustment procedure must be specified by, the actuary retained
7.28 	by the Legislative Commission on Pensions and Retirement under
7.29 	section 356.214.  The purpose of this adjustment is to ensure
7.30 	that the total amount of benefits that the actuary predicts an
7.31 	individual member will receive over the member's lifetime under
7.32 	this paragraph will be the same as the total amount of benefits
7.33 	the actuary predicts the individual member would receive over
7.34 	the member's lifetime under the law in effect before enactment
7.35 	of this paragraph. If the former legislator has legislative
7.36 	service before January 1, 1979, the person's benefit must
8.1 	include the additional benefit amount in effect on January 1,
8.2 	1979, and adjusted as otherwise provided in this paragraph.
8.3 	(d) (c) The retirement allowance accrues beginning with the
8.4 	first day of the month of receipt of the application, but not
8.5 	before age 60, and for the remainder of the former legislator's
8.6 	life, if the former legislator is not serving as a member of the
8.7 	legislature or as a constitutional officer or commissioner as
8.8 	defined in section 352C.021, subdivisions 2 and 3 3A.01,
8.9 	subdivision 1c. The annuity does not begin to accrue prior to 
8.10 	before the person's retirement as a legislator.  No annuity
8.11 	payment may be made retroactive for more than 180 days before
8.12 	the date that the annuity application is filed with the director.
8.13 	(e) (d) Any member who has served during all or part of
8.14 	four regular sessions is considered to have served eight years
8.15 	as a member of the legislature.
8.16 	(f) (e) The retirement allowance ceases with the last
8.17 	payment that accrued to the retired legislator during the
8.18 	retired legislator's lifetime, except that the surviving spouse,
8.19 	if any, is entitled to receive the retirement allowance of the
8.20 	retired legislator for the calendar month in which the retired
8.21 	legislator died.

8.22 	Sec. 14. Minnesota Statutes 2004, section 3A.02,
8.23 	subdivision 1b, is amended to read:
8.24 		Subd. 1b.Reduced retirement allowance.  (a) Upon
8.25 	separation from service after the beginning of the 1981
8.26 	legislative session, a former member of the legislature who has
8.27 	attained the age set by the board of directors of the Minnesota
8.28 	State Retirement System and who is otherwise qualified in
8.29 	accordance with under subdivision 1 is entitled,upon making
8.30 	written application on forms supplied a form prescribed by the
8.31 	director,to a reduced retirement allowance in .  The reduced
8.32 	retirement allowance is an amount equal to the retirement
8.33 	allowance specified in subdivision 1, paragraph (b), that is 
8.34 	reduced so that the reduced annuity allowance is the actuarial
8.35 	equivalent of the annuity allowance that would be payable if the
8.36 	former member of the legislature deferred receipt of the annuity 
9.1 	allowance and the annuity allowance amount were was augmented
9.2 	at an annual rate of three percent compounded annually from the
9.3 	date the annuity allowance begins to accrue until age 62.
9.4 	(b) The age set by the board of directors under paragraph
9.5 	(a) cannot be less an earlier age than the early retirement age
9.6 	under section 352.116, subdivision 1a.
9.7 	(c) If there is an actuarial cost to the plan of resetting
9.8 	the early retirement age under paragraph (a), the retired
9.9 	legislator is required to pay an additional amount to cover the
9.10 	full actuarial value.  The additional amount must be paid in a
9.11 	lump sum within 30 days of the certification of the amount by
9.12 	the executive director.
9.13 	(d) The executive director of the Minnesota State
9.14 	Retirement System shall report to the Legislative Commission on
9.15 	Pensions and Retirement on the utilization of this
9.16 	provision annually on or before September 1, 2000.

9.17 	Sec. 15. Minnesota Statutes 2004, section 3A.02,
9.18 	subdivision 3, is amended to read:
9.19 		Subd. 3.Appropriation.  The amounts required for payment
9.20 	of retirement allowances provided by this section are
9.21 	appropriated annually to the director from the participation of
9.22 	the legislators retirement plan in the Minnesota postretirement
9.23 	investment fund and shall .  The retirement allowance must be
9.24 	paid monthly to the recipients entitled thereto to those
9.25 	retirement allowances.

9.26 	Sec. 16. Minnesota Statutes 2004, section 3A.02,
9.27 	subdivision 4, is amended to read:
9.28 		Subd. 4.Deferred annuities augmentation.  (a) The
9.29 	deferred annuity retirement allowance of any former legislator
9.30 	must be augmented as provided herein.
9.31 	(b) The required reserves applicable to the
9.32 	deferred annuity retirement allowance, determined as of the date
9.33 	the benefit begins to accrue using an appropriate mortality
9.34 	table and an interest assumption of six percent, must be
9.35 	augmented from the first of the month following the termination
9.36 	of active service, or July 1, 1973, whichever is later, to the
10.1 	first day of the month in which the annuity allowance begins to
10.2 	accrue, at the following annually compounded rate of five
10.3 	percent per annum compounded annually until January 1, 1981, and
10.4 	thereafter at the rate of three percent per annum compounded
10.5 	annually until January 1 of the year in which the former
10.6 	legislator attains age 55.  From that date to the effective date
10.7 	of retirement, the rate is five percent compounded annually.or
10.8 	rates:
10.9 	rate period
10.10 	     (1) five percent until January 1, 1981 
10.11 	(2) three percent from January 1, 1981, or from the
10.12 	                          first day of the month following
10.13 	                          the termination of active service,
10.14 	                          whichever is later, until January 1
10.15 	                          of the year in which the former
10.16 	                          legislator attains age 55
10.18 	     (3) five percent from the period end date under
10.19 	                          clause (2) to the effective date
10.20 	                          of retirement.
10.21 	(b) The retirement allowance of, or the survivor benefit
10.22 	payable on behalf of, a former member of the legislature who
10.23 	terminated service before July 1, 1997, which is not first
10.24 	payable until after June 30, 1997, must be increased on an
10.25 	actuarial equivalent basis to reflect the change in the
10.26 	postretirement interest rate actuarial assumption under section
10.27 	356.215, subdivision 8, from five percent to six percent under a
10.28 	calculation procedure and tables adopted by the board of
10.29 	directors of the Minnesota State Retirement System and approved
10.30 	by the actuary retained by the Legislative Commission on
10.31 	Pensions and Retirement.

10.32 	Sec. 17. Minnesota Statutes 2004, section 3A.02,
10.33 	subdivision 5, is amended to read:
10.34 		Subd. 5.Optional annuities.  (a) The board of directors
10.35 	shall establish an optional retirement annuity in the form of a
10.36 	joint and survivor annuity and an optional retirement annuity in
11.1 	the form of a period certain and life thereafter.  Except as
11.2 	provided in paragraph (b), these optional annuity forms must be
11.3 	actuarially equivalent to the normal annuity allowance computed
11.4 	under this section, plus the actuarial value of any surviving
11.5 	spouse benefit otherwise potentially payable at the time of
11.6 	retirement under section 3A.04, subdivision 1.  An individual
11.7 	selecting an optional annuity under this subdivision waives and
11.8 	the person's spouse waive any rights to surviving spouse
11.9 	benefits under section 3A.04, subdivision 1.
11.10 	(b) If a retired legislator selects the joint and survivor
11.11 	annuity option, the retired legislator must receive a normal
11.12 	single-life annuity allowance if the designated optional annuity
11.13 	beneficiary dies before the retired legislator and no reduction
11.14 	may be made in the annuity to provide for restoration of the
11.15 	normal single-life annuity allowance in the event of the death
11.16 	of the designated optional annuity beneficiary.
11.17 	(c) The surviving spouse of a legislator who has attained
11.18 	at least age 60 and who dies while a member of the legislature
11.19 	may elect an optional joint and survivor annuity under paragraph
11.20 	(a), in lieu of surviving spouse benefits under section 3A.04,
11.21 	subdivision 1.

11.22 	Sec. 18. Minnesota Statutes 2004, section 3A.03,
11.23 	subdivision 1, is amended to read:
11.24 		Subdivision 1.Percentage. (a) Every member of the
11.25 	legislature shall contribute nine percent of total salary,.
11.26 	(b) The contribution must be made by payroll deduction,
11.27 	to and must be paid into the state treasury and deposited in the
11.28 	general fund. It shall be the duty of 
11.29 	(c) The director to must record the periodic contributions
11.30 	of each member of the legislature and must credit such each 
11.31 	contribution to the member's account.

11.32 	Sec. 19. Minnesota Statutes 2004, section 3A.03,
11.33 	subdivision 2, is amended to read:
11.34 		Subd. 2.Refund.  (a) A former member who has made
11.35 	contributions under subdivision 1 and who is no longer a member
11.36 	of the legislature is entitled to receive, upon written
12.1 	application to the executive director on a form prescribed by
12.2 	the executive director, a refund from the general fund of all
12.3 	contributions credited to the member's account with interest
12.4 	computed as provided in section 352.22, subdivision 2.
12.5 	(b) The refund of contributions as provided in paragraph (a)
12.6 	terminates all rights of a former member of the legislature and
12.7 	the survivors of the former member under this chapter.
12.8 	(c) If the former member of the legislature again becomes a
12.9 	member of the legislature after having taken a refund as
12.10 	provided in paragraph (a), the member must be considered is a
12.11 	new member of this plan the unclassified employees retirement
12.12 	program of the Minnesota State Retirement System.
12.13 	(d) However, the member may reinstate the rights and credit
12.14 	for service previously forfeited under this chapter if the
12.15 	member repays all refunds taken,plus interest at an annual rate
12.16 	of 8.5 percent compounded annually from the date on which the
12.17 	refund was taken to the date on which the refund is repaid.
12.18 	(d) (e) No person may be required to apply for or to accept
12.19 	a refund.

12.20 	Sec. 20. Minnesota Statutes 2004, section 3A.04,
12.21 	subdivision 1, is amended to read:
12.22 		Subdivision 1.Surviving spouse. (a) Upon the death of a
12.23 	member of the legislature while serving as such a member after
12.24 	June 30, 1973, or upon the death of a former member of the
12.25 	legislature with at least the number of six full years of
12.26 	service as required by section 3A.02, subdivision 1, clause
12.27 	(1) or service in all or part of four regular legislative
12.28 	sessions, the surviving spouse shall be paid is entitled to a
12.29 	survivor benefit in the amount of .
12.30 	(b) The surviving spouse benefit is one-half of the
12.31 	retirement allowance of the member of the legislature computed
12.32 	as though the member were at least normal retirement age on the
12.33 	date of death and based upon the member's allowable service
12.34 	or upon eight years,whichever is greater.  The augmentation
12.35 	provided in section 3A.02, subdivision 4, if applicable, shall 
12.36 	must be applied for the period up to, and including,the month
13.1 	of death.
13.2 	(c) Upon the death of a former legislator receiving a
13.3 	retirement allowance, the surviving spouse shall be is entitled
13.4 	to one-half of the amount of the retirement allowance being paid
13.5 	to the legislator. Such 
13.6 	(d) The surviving spouse benefit shall be paid during is
13.7 	payable for the lifetime of the surviving spouse.

13.8 	Sec. 21. Minnesota Statutes 2004, section 3A.04,
13.9 	subdivision 2, is amended to read:
13.10 		Subd. 2.Dependent children. (a) Upon the death of a
13.11 	member of the legislature while serving as a member, or upon the
13.12 	death of a former member of the legislature who has rendered at
13.13 	least the number of six full years of service as required by
13.14 	section 3A.02, subdivision 1, clause (1) or service in all or
13.15 	part of four regular legislative sessions and who was not
13.16 	receiving a retirement allowance, each dependent child of the
13.17 	member or former legislator shall be is entitled to receive a
13.18 	survivor benefit in the following amount:
13.19 	(1) for the first dependent child, a monthly allowance
13.20 	which equals benefit equal to 25 percent of the monthly
13.21 	retirement allowance of the member of the legislature or the 
13.22 	former legislator computed as though the member or the former
13.23 	legislator had attained at least the normal retirement age on
13.24 	the date of death and based upon the average monthly salary as
13.25 	of the date of death or as of the date of termination, whichever
13.26 	is applicable applies, and the member's allowable service or
13.27 	eight years,whichever is greater;
13.28 	(2) for each additional dependent child, a monthly
13.29 	allowance which equals benefit equal to 12-1/2 percent of the
13.30 	monthly retirement allowance of the member or the former
13.31 	legislator computed as provided in the case of the first child 
13.32 	clause (1); but and 
13.33 	(3) the total amount paid to the surviving spouse and to
13.34 	the dependent child or children shall may not exceed,in any
13.35 	one month,100 percent of the monthly retirement allowance of
13.36 	the member or of the former legislator computed as provided in
14.1 	the case of the first child clause (1).
14.2 	(b) The augmentation provided in section 3A.02, subdivision
14.3 	4, if applicable, shall be applied applies from the first day of
14.4 	the month next following the date of the termination of the
14.5 	person from service as a member of the legislature to the month
14.6 	of the death of the person.
14.7 	(c) Upon the death of a former legislator who was receiving
14.8 	a retirement allowance, the a surviving dependent child shall be 
14.9 	is entitled to the applicable percentage specified above in
14.10 	paragraph (a), clause (1) or (2), whichever applies,of the
14.11 	amount of the allowance which was paid to the former legislator
14.12 	for the month immediately prior to before the date of death of
14.13 	the former legislator.
14.14 	(d) The payments for dependent children shall must be made
14.15 	to the surviving spouse or to the guardian of the estate of the
14.16 	dependent children, if there is one.

14.17 	Sec. 22. Minnesota Statutes 2004, section 3A.04,
14.18 	subdivision 3, is amended to read:
14.19 		Subd. 3.Payment.  The surviving spouse's spouse and
14.20 	dependent children's child or children survivor benefits payable
14.21 	under this section shall be paid are payable by the director
14.22 	monthly in the same manner as retirement allowances are
14.23 	authorized to be paid by this chapter.

14.24 	Sec. 23. Minnesota Statutes 2004, section 3A.04,
14.25 	subdivision 4, is amended to read:
14.26 		Subd. 4.Death refunds. (a) Upon the death of a member
14.27 	of the legislature or of a former legislator who was not
14.28 	receiving a retirement allowance,without leaving either a
14.29 	surviving spouse or a dependent child or dependent children, the
14.30 	last designated beneficiary named on a form that was filed with
14.31 	the director before the death of the legislator, or if no
14.32 	designation is filed, the estate of the member or the former
14.33 	legislator, upon application, shall be is entitled to a refund.
14.34 	(b) The refund is the amount of contributions credited to
14.35 	the person's account plus interest as provided in section 3A.03,
14.36 	subdivision 2, clause (2) paragraph (a).

15.1 	Sec. 24. Minnesota Statutes 2004, section 3A.04, is
15.2 	amended by adding a subdivision to read:
15.3 		Subd. 5.Appropriation. The survivor benefits and the
15.4 	death refunds authorized by this section are appropriated to the
15.5 	director from the general fund when they are due and payable.

15.6 	Sec. 25. Minnesota Statutes 2004, section 3A.05, is
15.7 	amended to read:
15.8 	3A.05 APPLICATION FOR SURVIVOR BENEFIT.
15.9 	(a) Applications for survivor benefits pursuant to under 
15.10 	section 3A.04shall must be filed with the director by the
15.11 	surviving spouse and dependent child or children entitled to
15.12 	benefits pursuant to under section 3A.04, or by the guardian of
15.13 	the estate, if there is one, of the dependent child or children.
15.14 	(b) Survivor benefits shall accrue as of the first day of
15.15 	the month following the death of the member of the legislature
15.16 	or former legislator and payments shall commence as of the first
15.17 	of the month next following the filing of the application,
15.18 	and shall be are retroactive to the date the benefit accrues;
15.19 	provided, however, that no payment shall be retroactive for more
15.20 	than or the first of the month occurring 12 months prior
15.21 	to before the month in which the application is filed with the
15.22 	director, whichever is earlier.

15.23 	Sec. 26. Minnesota Statutes 2004, section 3A.07, is
15.24 	amended to read:
15.25 	3A.07 APPLICATION.
15.26 	(a) Except as provided in paragraph (b), this chapter
15.27 	applies to members of the legislature in service after July 1,
15.28 	1965, who otherwise meet the requirements of this chapter.
15.29 	(b) Members of the legislature who were elected for the
15.30 	first time after June 30, 1997, or members of the legislature
15.31 	who were elected before July 1, 1997, and who, after July 1,
15.32 	1998, elect not to be members of the plan established by this
15.33 	chapter are covered by the unclassified employees retirement
15.34 	program governed by chapter 352D.
15.35 	(c) The post-July 1, 1998, coverage election under
15.36 	paragraph (b) is irrevocable and must be made on a form
16.1 	prescribed by the director. The second chance referendum
16.2 	election under Laws 2002, chapter 392, article 15, also is
16.3 	irrevocable.

16.4 	Sec. 27. Minnesota Statutes 2004, section 3A.10,
16.5 	subdivision 1, is amended to read:
16.6 		Subdivision 1.Service credit for legislative term. (a) 
16.7 	In the case of a member of the house of representatives,one
16.8 	full term of office shall must be considered two full years of 
16.9 	service,notwithstanding the fact that the oath of office may be 
16.10 	was taken on different days each biennium.
16.11 	(b) In the case of a member of the senate, one full term of
16.12 	office shall must be considered four full years of service,
16.13 	notwithstanding the fact that the oath of office may be was 
16.14 	taken on different days at the start of each term.
16.15 	(c) For purposes of this chapter, a legislative term shall 
16.16 	must be deemed to commence on January 1st 1 and to end on
16.17 	December 31st 31.

16.18 	Sec. 28. Minnesota Statutes 2004, section 3A.12, is
16.19 	amended to read:
16.20 	3A.12 COVERAGE BY MORE THAN ONE RETIREMENT SYSTEM OR
16.21 	ASSOCIATION.
16.22 		Subdivision 1.Entitlement to annuity. (a) Any
16.23 	legislator who has been an employee covered by a member of a
16.24 	retirement plan listed in paragraph (b) is entitled, when
16.25 	otherwise qualified, to a retirement allowance or annuity from
16.26 	each plan if the total allowable service in all plans or in any
16.27 	two of these plans totals ten or more years.
16.28 	(b) This section applies to any retirement plan or program
16.29 	administered by the Minnesota State Retirement System, or a
16.30 	member of any retirement plan administered by the Public
16.31 	Employees Retirement Association,including the Public Employees
16.32 	Retirement Association police and fire fund, or the Teachers
16.33 	Retirement Association, or the Minneapolis employees
16.34 	retirement Fund plan, or the State Patrol retirement fund plan,
16.35 	or any other public employee retirement system in the state of
16.36 	Minnesota having a like provision but excluding all .
17.1 	(c) This section does not apply to other funds retirement
17.2 	plans providing benefits for police or firefighters, shall be
17.3 	entitled when qualified to an annuity from each fund if the
17.4 	total allowable service for which the legislator has credit in
17.5 	all funds or in any two of these funds totals ten or more years,
17.6 	provided .
17.7 	(d) No portion of the allowable service upon which the
17.8 	retirement annuity from one fund plan is based is again used in
17.9 	the computation for benefits from another fund plan.  The
17.10 	annuity from each fund shall plan must be determined by the
17.11 	appropriate provisions of the law,except that the requirement
17.12 	that a person must have at least ten a minimum number of years
17.13 	of allowable service in the respective system or
17.14 	association shall does not apply for the purposes of this
17.15 	section provided if the combined service in two or more of these
17.16 	funds plans equals ten or more years.  The augmentation of
17.17 	deferred annuities provided in section 3A.02, subdivision
17.18 	4, shall apply applies to the annuities accruing hereunder under
17.19 	this section.
17.20 		Subd. 2.Refund repayment. Any A former legislator who
17.21 	has received a refund as provided in section 3A.03, subdivision
17.22 	2, who is a currently contributing member of a retirement fund 
17.23 	plan specified in subdivision 1, paragraph (b), may repay the
17.24 	refund as provided in section 3A.03, subdivision 2. Any A 
17.25 	member of the legislature who has received a refund from any of
17.26 	the funds retirement plans specified in subdivision 1,may repay
17.27 	the refund to the respective fund plan under such terms and
17.28 	conditions consistent with the law governing such fund the
17.29 	retirement plan if the law governing such fund the plan permits
17.30 	the repayment of refunds.  If the total amount to be repaid,
17.31 	including principal and interest exceeds $2,000, repayment may
17.32 	be made in three equal installments over a period of 18 months,
17.33 	with the interest accrued during the period of the repayment
17.34 	added to the final installment.

17.35 	Sec. 29. Minnesota Statutes 2004, section 3A.13, is
17.36 	amended to read:
18.1 	3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
18.2 	DEDUCTION.
18.3 	(a) The provisions of section 352.15shall apply to the
18.4 	legislators retirement plan, chapter 3A.
18.5 	(b) The executive director of the Minnesota State
18.6 	Retirement System must, at the request of a retired legislator
18.7 	who is enrolled in a health insurance plan covering state
18.8 	employees, deduct the person's health insurance premiums from
18.9 	the person's annuity and transfer the amount of the premium to a
18.10 	health insurance carrier covering state employees.

18.11 	Sec. 30. [352C.001] RETIREMENT PLAN; APPLICATION.
18.12 	(a) The retirement plan applicable to a former
18.13 	constitutional officer who was first elected to a constitutional
18.14 	office after July 1, 1967, and before July 1, 1997, is the
18.15 	applicable portions of this chapter and chapter 356 in effect on
18.16 	the date on which the person terminated active service as a
18.17 	constitutional officer.
18.18 	(b) Nothing in this section or section 31 or 84,
18.19 	subdivision 2, is intended to reduce the benefits of former
18.20 	constitutional officers or to adversely modify their eligibility
18.21 	for benefits in effect as of the day before the effective date
18.22 	of this section.

18.23 	Sec. 31. Minnesota Statutes 2004, section 352C.091,
18.24 	subdivision 1, is amended to read:
18.25 		Subdivision 1.Administrative agency and standards. This
18.26 	chapter (a) The elected officers retirement plan must be
18.27 	administered by the board of directors and the executive
18.28 	director of the Minnesota State Retirement System.
18.29 	(b) The elected state officers retirement plan must be
18.30 	administered consistent with this chapter the applicable
18.31 	statutory provisions governing the plan and chapters 356 and
18.32 	356A.

18.33 	Sec. 32. Minnesota Statutes 2004, section 352C.10, is
18.34 	amended to read:
18.35 	352C.10 BENEFIT ADJUSTMENTS.
18.36 	Retirement allowances payable to retired constitutional
19.1 	officers pursuant to section 352C.031and surviving spouse
19.2 	benefits payable pursuant to section 352C.04, shall must be
19.3 	adjusted in the same manner, at the same times and in the same
19.4 	amounts as are benefits payable from the Minnesota
19.5 	postretirement investment fund to retirees of a participating
19.6 	public pension fund.

19.7 	Sec. 33. Minnesota Statutes 2004, section 352D.02,
19.8 	subdivision 1, is amended to read:
19.9 		Subdivision 1.Coverage.  (a) Employees enumerated in
19.10 	paragraph (c), clauses (2), (3), (4), and (6) to (14), if they
19.11 	are in the unclassified service of the state or Metropolitan
19.12 	Council and are eligible for coverage under the general state
19.13 	employees retirement plan under chapter 352, are participants in
19.14 	the unclassified plan under this chapter unless the employee
19.15 	gives notice to the executive director of the Minnesota State
19.16 	Retirement System within one year following the commencement of
19.17 	employment in the unclassified service that the employee desires
19.18 	coverage under the general state employees retirement plan.  For
19.19 	the purposes of this chapter, an employee who does not file
19.20 	notice with the executive director is deemed to have exercised
19.21 	the option to participate in the unclassified plan.
19.22 	(b) Persons referenced in paragraph (c), clauses (1) and 
19.23 	clause (5), are participants in the unclassified program under
19.24 	this chapter unless the person is eligible to elect different
19.25 	coverage under section 3A.07or 352C.011and, after July 1,
19.26 	1998, elects elected retirement coverage by the applicable
19.27 	alternative retirement plan.  Persons referenced in paragraph
19.28 	(c), clause (15), are participants in the unclassified program
19.29 	under this chapter for judicial employment in excess of the
19.30 	service credit limit in section 490.121, subdivision 22.
19.31 	(c) Enumerated employees and referenced persons are:
19.32 	(1) the governor, the lieutenant governor, the secretary of
19.33 	state, the state auditor, and the attorney general;
19.34 	(2) an employee in the Office of the Governor, Lieutenant
19.35 	Governor, Secretary of State, State Auditor, Attorney General;
19.36 	(3) an employee of the State Board of Investment;
20.1 	(4) the head of a department, division, or agency created
20.2 	by statute in the unclassified service, an acting department
20.3 	head subsequently appointed to the position, or an employee
20.4 	enumerated in section 15A.0815 or 15A.083, subdivision 4;
20.5 	(5) a member of the legislature;
20.6 	(6) a full-time unclassified employee of the legislature or
20.7 	a commission or agency of the legislature who is appointed
20.8 	without a limit on the duration of the employment or a temporary
20.9 	legislative employee having shares in the supplemental
20.10 	retirement fund as a result of former employment covered by this
20.11 	chapter, whether or not eligible for coverage under the
20.12 	Minnesota State Retirement System;
20.13 	(7) a person who is employed in a position established
20.14 	under section 43A.08, subdivision 1, clause (3), or in a
20.15 	position authorized under a statute creating or establishing a
20.16 	department or agency of the state, which is at the deputy or
20.17 	assistant head of department or agency or director level;
20.18 	(8) the regional administrator, or executive director of
20.19 	the Metropolitan Council, general counsel, division directors,
20.20 	operations managers, and other positions as designated by the
20.21 	council, all of which may not exceed 27 positions at the council
20.22 	and the chair;
20.23 	(9) the executive director, associate executive director,
20.24 	and not to exceed nine positions of the Higher Education
20.25 	Services Office in the unclassified service, as designated by
20.26 	the Higher Education Services Office before January 1, 1992, or
20.27 	subsequently redesignated with the approval of the board of
20.28 	directors of the Minnesota State Retirement System, unless the
20.29 	person has elected coverage by the individual retirement account
20.30 	plan under chapter 354B;
20.31 	(10) the clerk of the appellate courts appointed under
20.32 	article VI, section 2, of the Constitution of the state of
20.33 	Minnesota;
20.34 	(11) the chief executive officers of correctional
20.35 	facilities operated by the Department of Corrections and of
20.36 	hospitals and nursing homes operated by the Department of Human
21.1 	Services;
21.2 	(12) an employee whose principal employment is at the state
21.3 	ceremonial house;
21.4 	(13) an employee of the Minnesota Educational Computing
21.5 	Corporation;
21.6 	(14) an employee of the State Lottery who is covered by the
21.7 	managerial plan established under section 43A.18, subdivision 3;
21.8 	and
21.9 	(15) a judge who has exceeded the service credit limit in
21.10 	section 490.121, subdivision 22.

21.11 	Sec. 34. Minnesota Statutes 2004, section 355.01,
21.12 	subdivision 3e, is amended to read:
21.13 		Subd. 3e.Judge.  "Judge" means a judge as defined in
21.14 	section 490.121, subdivision 3 21a.

21.15 	Sec. 35. Minnesota Statutes 2004, section 356.65,
21.16 	subdivision 2, is amended to read:
21.17 		Subd. 2.Disposition of abandoned amounts.  Any unclaimed
21.18 	public pension fund amounts existing in any public pension fund
21.19 	are presumed to be abandoned, but are not subject to the
21.20 	provisions of sections 345.31 to 345.60.  Unless the benefit
21.21 	plan of the public pension fund specifically provides for a
21.22 	different disposition of unclaimed or abandoned funds or
21.23 	amounts, any unclaimed public pension fund amounts cancel and
21.24 	must be credited to the public pension fund.  If the unclaimed
21.25 	public pension fund amount exceeds $25 and the inactive or
21.26 	former member again becomes a member of the applicable public
21.27 	pension plan or applies for a retirement annuity under section
21.28 	3A.12, 352.72, 352B.30, 352C.051,353.71, 354.60, 356.30, or
21.29 	422A.16, subdivision 8, whichever applies, the canceled amount
21.30 	must be restored to the credit of the person.

21.31 	Sec. 36. Minnesota Statutes 2004, section 490.121,
21.32 	subdivision 1, is amended to read:
21.33 		Subdivision 1.Scope.  For purposes of sections 490.121
21.34 	to 490.132, unless the context clearly indicates otherwise, each
21.35 	of the terms defined in this section have has the meanings 
21.36 	meaning given them unless the context clearly indicates
22.1 	otherwise it.

22.2 	Sec. 37. Minnesota Statutes 2004, section 490.121, is
22.3 	amended by adding a subdivision to read:
22.4 		Subd. 2a.Actuarial equivalent. "Actuarial equivalent"
22.5 	means the condition of one annuity or benefit having an equal
22.6 	actuarial present value as another annuity or benefit,
22.7 	determined as of a given date with each actuarial present value
22.8 	based on the appropriate mortality table adopted by the board of
22.9 	directors of the Minnesota State Retirement System based on the
22.10 	experience of the fund as recommended by the actuary retained
22.11 	under section 356.214 and approved under section 356.215,
22.12 	subdivision 18, and using the applicable preretirement or
22.13 	postretirement interest rate assumption specified in section
22.14 	356.215, subdivision 8.

22.15 	Sec. 38. Minnesota Statutes 2004, section 490.121,
22.16 	subdivision 4, is amended to read:
22.17 		Subd. 4.Allowable service. (a) "Allowable service"
22.18 	means any calendar month, subject to the service credit limit in
22.19 	subdivision 22, served as a judge at any time, or during which
22.20 	the judge received compensation for that service from the state,
22.21 	municipality, or county, whichever applies, and for which the
22.22 	judge made any required member contribution.  It also includes
22.23 	any month served as a referee in probate for all referees in
22.24 	probate who were in office prior to before January 1, 1974.
22.25 	(b) "Allowable service" does not mean service as a retired
22.26 	judge.

22.27 	Sec. 39. Minnesota Statutes 2004, section 490.121,
22.28 	subdivision 6, is amended to read:
22.29 		Subd. 6.Annuity.  "Annuity" means the payments that are 
22.30 	made each year to an annuitant from the judges' retirement fund,
22.31 	pursuant to the provisions of under sections 490.121 to 490.132.

22.32 	Sec. 40. Minnesota Statutes 2004, section 490.121,
22.33 	subdivision 7, is amended to read:
22.34 		Subd. 7.Annuitant.  "Annuitant" means a former judge, a 
22.35 	surviving spouse,or a dependent child who is entitled to and is
22.36 	receiving an annuity under the provisions of sections 490.121 to
23.1 	490.132.

23.2 	Sec. 41. Minnesota Statutes 2004, section 490.121, is
23.3 	amended by adding a subdivision to read:
23.4 		Subd. 7a.Approved actuary. "Approved actuary" means an
23.5 	actuary as defined in section 356.215, subdivision 1, paragraph
23.6 	(c).

23.7 	Sec. 42. Minnesota Statutes 2004, section 490.121, is
23.8 	amended by adding a subdivision to read:
23.9 		Subd. 7b.Court. "Court" means any court of this state
23.10 	that is established by the Minnesota Constitution.

23.11 	Sec. 43. Minnesota Statutes 2004, section 490.121, is
23.12 	amended by adding a subdivision to read:
23.13 		Subd. 7c.Dependent surviving child. "Dependent
23.14 	surviving child" means any natural or adopted child of a
23.15 	deceased judge who has not reached the age of 18 years, or
23.16 	having reached the age of 18, is under age 22 and who is a
23.17 	full-time student throughout the normal school year, is
23.18 	unmarried, and is actually dependent for more than one-half of
23.19 	the child's support upon the judge for a period of at least 90
23.20 	days before the judge's death. It also includes any natural
23.21 	child of the judge who was born after the death of the judge.

23.22 	Sec. 44. Minnesota Statutes 2004, section 490.121,
23.23 	subdivision 13, is amended to read:
23.24 		Subd. 13.Disability.  "Disability" means the permanent
23.25 	inability of a judge to continue to perform the functions of
23.26 	judge by reason of a physical or mental impairment resulting
23.27 	from a sickness or an injury.

23.28 	Sec. 45. Minnesota Statutes 2004, section 490.121,
23.29 	subdivision 14, is amended to read:
23.30 		Subd. 14.Disability retirement date.  "Disability
23.31 	retirement date" means the last day of the first month after the
23.32 	date on which the governor determines, upon receipt of the 
23.33 	voluntary application by the judge or otherwise, that a judge
23.34 	suffers from a disability.

23.35 	Sec. 46. Minnesota Statutes 2004, section 490.121,
23.36 	subdivision 15, is amended to read:
24.1 		Subd. 15.Disability retirement annuity.  "Disability
24.2 	retirement annuity" means an annuity to which a judge is
24.3 	entitled under section 490.124, subdivisions 1 and 4,after the 
24.4 	retirement for reason of the judge because of a disability.

24.5 	Sec. 47. Minnesota Statutes 2004, section 490.121, is
24.6 	amended by adding a subdivision to read:
24.7 		Subd. 15a.Early retirement date. "Early retirement date"
24.8 	means the last day of the month after a judge attains the age of
24.9 	60 but before the judge reaches the normal retirement date.

24.10 	Sec. 48. Minnesota Statutes 2004, section 490.121, is
24.11 	amended by adding a subdivision to read:
24.12 		Subd. 15b.Early retirement annuity. "Early retirement
24.13 	annuity" means an annuity to which a judge is entitled under
24.14 	section 490.124, subdivisions 1 and 3, upon retirement by the
24.15 	judge at an early retirement date.

24.16 	Sec. 49. Minnesota Statutes 2004, section 490.121,
24.17 	subdivision 21, is amended to read:
24.18 		Subd. 21.Final average compensation.  "Final average
24.19 	compensation" means the total amount of the salary payable to a
24.20 	judge in the highest five years out of the last ten years prior
24.21 	to before the event of maturity of benefits termination of
24.22 	judicial service, divided by five; provided, however, that if
24.23 	the number of years of service by the judge equals or exceeds
24.24 	ten.  If the number of years of service by the judge is less
24.25 	than ten, but more than five, the highest five shall years of
24.26 	salary must be counted, and .If the number of years of service
24.27 	by the judge is less than five, the aggregate salary in such for
24.28 	the period shall of service must be divided by the number of
24.29 	months in such the period and multiplied by 12.

24.30 	Sec. 50. Minnesota Statutes 2004, section 490.121, is
24.31 	amended by adding a subdivision to read:
24.32 		Subd. 21a.Judge. "Judge" means a judge or a justice of
24.33 	any court as defined under subdivision 7b.

24.34 	Sec. 51. Minnesota Statutes 2004, section 490.121, is
24.35 	amended by adding a subdivision to read:
24.36 		Subd. 21b.Judges' retirement fund; retirement fund;
25.1 	fund. "Judges' retirement fund," "retirement fund," or "fund"
25.2 	means the fund created by section 490.123.

25.3 	Sec. 52. Minnesota Statutes 2004, section 490.121, is
25.4 	amended by adding a subdivision to read:
25.5 		Subd. 21c.Mandatory retirement date. "Mandatory
25.6 	retirement date" means the last day of the month in which a
25.7 	judge has attained 70 years of age.

25.8 	Sec. 53. Minnesota Statutes 2004, section 490.121, is
25.9 	amended by adding a subdivision to read:
25.10 		Subd. 21d.Normal retirement annuity. Except as
25.11 	otherwise provided in sections 490.121 to 490.132, "normal
25.12 	retirement annuity" means an annuity to which a judge is
25.13 	entitled under section 490.124, subdivision 1, upon retirement
25.14 	on or after the normal retirement date of the judge.

25.15 	Sec. 54. Minnesota Statutes 2004, section 490.121, is
25.16 	amended by adding a subdivision to read:
25.17 		Subd. 21e.Normal retirement date. "Normal retirement
25.18 	date" means the last day of the month in which a judge attains
25.19 	the age of 65.

25.20 	Sec. 55. Minnesota Statutes 2004, section 490.121,
25.21 	subdivision 22, is amended to read:
25.22 		Subd. 22.Service credit limit.  "Service credit limit"
25.23 	means the greater of:  (1) 24 years of allowable service
25.24 	under this chapter 490; or (2) for judges with allowable service
25.25 	rendered prior to before July 1, 1980, the number of years of
25.26 	allowable service under chapter 490, which, when multiplied by
25.27 	the percentage listed in section 356.315, subdivision 7 or 8,
25.28 	whichever is applicable to each year of service, equals 76.8.

25.29 	Sec. 56. Minnesota Statutes 2004, section 490.121, is
25.30 	amended by adding a subdivision to read:
25.31 		Subd. 23.Surviving spouse. "Surviving spouse" means the
25.32 	surviving legally married spouse of a deceased judge.

25.33 	Sec. 57. Minnesota Statutes 2004, section 490.121, is
25.34 	amended by adding a subdivision to read:
25.35 		Subd. 24.Survivor's annuity. "Survivor's annuity" means
25.36 	an annuity to which a surviving spouse or dependent child is
26.1 	entitled under section 490.124, subdivision 9.

26.2 	Sec. 58. Minnesota Statutes 2004, section 490.122, is
26.3 	amended to read:
26.4 	490.122 ADMINISTRATION OF JUDGES' RETIREMENT.
26.5 		Subdivision 1.Administration. The policy-making,
26.6 	management, and administrative functions governing the operation
26.7 	of the judges' retirement fund and the administration
26.8 	of sections 490.121 to 490.132this chapter are vested in the
26.9 	board of directors and executive director of the Minnesota State
26.10 	Retirement System with such .  In administering the plan and
26.11 	fund, the board and the director have the same duties,
26.12 	authority, and responsibility as are provided in chapter 352.
26.13 		Subd. 2.Inapplicability of certain laws. Except as
26.14 	otherwise specified, no provision of chapter 352 applies to the
26.15 	judges' retirement fund or any judge.
26.16 		Subd. 3.Fiduciary responsibility. Fiduciary
26.17 	activities of relating to the uniform judges' retirement and
26.18 	Survivors' Annuities for Judges plan must be undertaken in a
26.19 	manner consistent with chapter 356A.

26.20 	Sec. 59. Minnesota Statutes 2004, section 490.123,
26.21 	subdivision 1, is amended to read:
26.22 		Subdivision 1.Fund creation; revenue and authorized
26.23 	disbursements. (a) There is created a special fund to be known
26.24 	as the "judges' retirement fund."
26.25 	(b) The judges' retirement fund must be credited with all
26.26 	contributions,;all interest, dividends, and other investment
26.27 	proceeds;and all other income authorized by this chapter or
26.28 	other applicable law.
26.29 	(c) From this fund there are appropriated the payments
26.30 	authorized by sections 490.121 to 490.132, in the amounts and at
26.31 	the times provided, including the necessary and reasonable
26.32 	expenses of the Minnesota State Retirement System in
26.33 	administering the fund and the transfers to the Minnesota
26.34 	postretirement investment fund.

26.35 	Sec. 60. Minnesota Statutes 2004, section 490.123,
26.36 	subdivision 1a, is amended to read:
27.1 		Subd. 1a.Member contribution rates.  (a) A judge who is
27.2 	covered by the federal Old Age, Survivors, Disability, and
27.3 	Health Insurance Program and whose service does not exceed the
27.4 	service credit limit in section 490.121, subdivision 22, shall
27.5 	contribute to the fund from each salary payment a sum equal to
27.6 	8.00 percent of salary.
27.7 	(b) A judge not so covered whose service does not exceed
27.8 	the service credit limit in section 490.121, subdivision 22,
27.9 	shall contribute to the fund from each salary payment a sum
27.10 	equal to 8.15 percent of salary.
27.11 	(c) The contribution under this subdivision is payable by
27.12 	salary deduction. The deduction must be made by the state court
27.13 	administrator under section 352.04, subdivisions 4, 5, and 8.

27.14 	Sec. 61. Minnesota Statutes 2004, section 490.123,
27.15 	subdivision 1b, is amended to read:
27.16 		Subd. 1b.Employer contribution rate. (a) The employer
27.17 	contribution rate to the fund on behalf of a judge is 20.5
27.18 	percent of salary and .  The employer contribution obligation 
27.19 	continues after a judge exceeds the service credit limit in
27.20 	section 490.121, subdivision 22.
27.21 	(b) The employer contribution must be paid by the state
27.22 	court administrator and .  The employer contribution is payable
27.23 	at the same time as member contributions are made under
27.24 	subdivision 1a or as employee contributions are made to the
27.25 	unclassified plan in program governed by chapter 352D for judges
27.26 	whose service exceeds the limit in section 490.121, subdivision
27.27 	22, are remitted.

27.28 	Sec. 62. Minnesota Statutes 2004, section 490.123,
27.29 	subdivision 1c, is amended to read:
27.30 		Subd. 1c.Additional employer contribution. In the event
27.31 	that If the employer contribution under subdivision 1b and the
27.32 	assets of the judges retirement fund are insufficient to meet
27.33 	reserve transfers to the Minnesota postretirement investment
27.34 	fund or payments of survivor benefits before July 1, 1993 in a
27.35 	month, the necessary amount is appropriated from the general
27.36 	fund to the executive director of the Minnesota State Retirement
28.1 	System, upon the certification of the required amount by the
28.2 	executive director to the commissioner of finance.

28.3 	Sec. 63. Minnesota Statutes 2004, section 490.123,
28.4 	subdivision 2, is amended to read:
28.5 		Subd. 2.Commissioner of finance.  The commissioner of
28.6 	finance shall be is the ex officio treasurer of the judges'
28.7 	retirement fund and the .  The commissioner's general bond to the
28.8 	state shall must be so conditioned as to cover all liability for
28.9 	acting as the treasurer of this the fund.  All moneys money 
28.10 	received by the commissioner pursuant to under this section
28.11 	shall must be set aside in the state treasury to the credit of
28.12 	the judges' retirement fund. The commissioner shall transmit
28.13 	monthly to the executive director described in section 352.03,
28.14 	subdivision 5, a detailed statement of all amounts so received
28.15 	and credited to the fund.  The commissioner shall pay out the
28.16 	fund only upon vouchers signed by said executive director;
28.17 	provided that vouchers for investment may be signed by the
28.18 	secretary of the State Board of Investment.

28.19 	Sec. 64. Minnesota Statutes 2004, section 490.123,
28.20 	subdivision 3, is amended to read:
28.21 		Subd. 3.Investment. (a) The executive director referred
28.22 	to in subdivision 2 of the Minnesota State Retirement System 
28.23 	shall, from time to time, certify to the State Board of
28.24 	Investment such portions of the judges' retirement fund as in
28.25 	the director's judgment may not be required for immediate use.
28.26 	(b) Assets from the judges' retirement fund shall must be
28.27 	transferred to the Minnesota postretirement investment fund for
28.28 	retirement and disability benefits as provided in sections
28.29 	11A.18 and 352.119.
28.30 	(c) The State Board of Investment shall thereupon invest
28.31 	and reinvest sums so transferred, or certified, in such
28.32 	securities as are duly authorized legal investments for such
28.33 	purposes under section 11A.24in compliance with sections
28.34 	356A.04 and 356A.06.

28.35 	Sec. 65. Minnesota Statutes 2004, section 490.124,
28.36 	subdivision 1, is amended to read:
29.1 		Subdivision 1.Basic retirement annuity. (a) Except as
29.2 	qualified hereinafter from and after the mandatory retirement
29.3 	date, the normal retirement date, the early retirement date, or
29.4 	one year from the disability retirement date, as the case may
29.5 	be, a retiring judge is eligible to receive a retirement annuity
29.6 	shall be payable to a retiring judge from the judges' retirement
29.7 	fund in .
29.8 	(b) The retirement annuity is an amount equal to:  (1) the
29.9 	percent specified in section 356.315, subdivision 7, multiplied
29.10 	by the judge's final average compensation with that result then 
29.11 	multiplied by the number of years and fractions of years of
29.12 	allowable service rendered prior to before July 1, 1980; plus
29.13 	(2) the percent specified in section 356.315, subdivision 8,
29.14 	multiplied by the judge's final average compensation with that
29.15 	result then multiplied by the number of years and fractions of
29.16 	years of allowable service rendered after June 30, 1980.
29.17 	(c) Service that exceeds the service credit limit in
29.18 	section 490.121, subdivision 22, must be excluded in calculating
29.19 	the retirement annuity, but the compensation earned by the judge 
29.20 	during this period of judicial service must be used in
29.21 	determining a judge's final average compensation and calculating
29.22 	the retirement annuity.

29.23 	Sec. 66. Minnesota Statutes 2004, section 490.124,
29.24 	subdivision 2, is amended to read:
29.25 		Subd. 2.Minimum service requirement; extension of term.
 29.26 	No (a) Unless section 356.30 applies, a judge shall be is not 
29.27 	eligible for an annuity at the normal retirement date or the 
29.28 	early retirement date if the judge has less than five years of
29.29 	allowable service.
29.30 	(b) A judge who shall retire retires on or, as permitted
29.31 	under sections 490.121 to 490.132, after the judge's mandatory
29.32 	retirement date, shall be is entitled to a proportionate annuity
29.33 	based upon the allowable service of the judge at the date of
29.34 	retirement.
29.35 	A judge who was in office on December 31, 1973, and
29.36 	thereafter and who, by the date on which the current term
30.1 	expires, would not be eligible to retire with full benefits
30.2 	under statutes in effect on December 31, 1973, may apply to the
30.3 	governor for an extension to serve up to three additional years,
30.4 	stating the intention of the judge to retire upon attaining
30.5 	eligibility to receive a retirement allowance.  Notwithstanding
30.6 	section 490.125, the governor shall forthwith make a written
30.7 	order accepting the retirement application, and extending the
30.8 	term of office of the judge for the period of time, not to
30.9 	exceed three years, as may be necessary to make the judge
30.10 	eligible for retirement, solely for purposes of computing
30.11 	benefits hereunder.

30.12 	Sec. 67. Minnesota Statutes 2004, section 490.124,
30.13 	subdivision 3, is amended to read:
30.14 		Subd. 3.Early reduced retirement.  The retirement
30.15 	annuity provided by under subdivision 1 of any judge electing 
30.16 	who elects to retire at an early retirement date shall must be
30.17 	reduced by one-half of one percent per month from the retirement
30.18 	date to the normal retirement date.

30.19 	Sec. 68. Minnesota Statutes 2004, section 490.124,
30.20 	subdivision 4, is amended to read:
30.21 		Subd. 4.Disability retirement. (a) When the governor
30.22 	determines that a judge is disabled under section 490.121,
30.23 	subdivision 13, notice of the governor's determination must be
30.24 	sent to the judge, to the chief justice of the Supreme Court, to
30.25 	the state court administrator, and to the executive director of
30.26 	the Minnesota State Retirement System.
30.27 	(b) From and after disability retirement date, a disabled
30.28 	judge shall be is entitled to continuation of the judge's full
30.29 	salary payable by the judge's employer, as if the judge's office
30.30 	were not vacated by retirement, for a period of up to one full
30.31 	year, but in no event beyond the judge's mandatory retirement
30.32 	date.  During this year the judge will is entitled to earn
30.33 	additional service credit in the judges' retirement plan.  The
30.34 	salary earned will be payable to a disabled judge is subject to
30.35 	retirement deductions and will must be included in computing
30.36 	final average compensation of the judge. Thereafter 
31.1 	(c) At the conclusion of the year of continued salary
31.2 	following a disability or upon the judge's mandatory retirement
31.3 	date, whichever is earlier, the disabled judge is entitled to a
31.4 	disability retirement annuity computed as provided in
31.5 	subdivision 1 shall be paid, provided that .  If the computed
31.6 	retirement annuity is a smaller amount,the judge shall is
31.7 	entitled to receive a minimum annuity of 25 percent of the
31.8 	judge's final average compensation.

31.9 	Sec. 69. Minnesota Statutes 2004, section 490.124,
31.10 	subdivision 5, is amended to read:
31.11 		Subd. 5.Deferred benefits.  (a) Any A benefit to which a
31.12 	judge is entitled under this section may be deferred until the 
31.13 	early or normal retirement date or later, notwithstanding the 
31.14 	termination of such the judge's service prior thereto.
31.15 	(b) The retirement annuity of, or the survivor benefit
31.16 	payable on behalf of, a former judge, who terminated service
31.17 	before July 1, 1997, which is not first payable until after June
31.18 	30, 1997, must be increased on an actuarial equivalent basis to
31.19 	reflect the change in the postretirement interest rate actuarial
31.20 	assumption under section 356.215, subdivision 8, from five
31.21 	percent to six percent under a calculation procedure and tables
31.22 	adopted by the board of directors of the Minnesota State
31.23 	Retirement System and approved by the actuary retained by the
31.24 	Legislative Commission on Pensions and Retirement under section
31.25 	356.214.

31.26 	Sec. 70. Minnesota Statutes 2004, section 490.124,
31.27 	subdivision 8, is amended to read:
31.28 		Subd. 8.Exclusive normal retirement benefits. Any (a)
31.29 	Except as provided in paragraph (b), a judge who retires after
31.30 	December 31, 1973, shall be is entitled to a retirement pension,
31.31 	retirement compensation or other retirement payment under
31.32 	statutes applicable solely to judges pursuant to under this
31.33 	section only, except that any such .
31.34 	(b) A judge who was in office prior to before January 1,
31.35 	1974, who retires at or after normal retirement age may then
31.36 	elect to receive during the judge's lifetime a normal retirement
32.1 	annuity computed on the basis of retirement compensation
32.2 	provided for such judge under statutes in effect on December 31,
32.3 	1973, in lieu of the amount of normal retirement annuity
32.4 	otherwise computed under sections 490.121 to 490.132.
32.5 	For purposes of this subdivision, the Conciliation Court of
32.6 	the city of Duluth shall be deemed to have been a court of
32.7 	record by the statutes in effect on December 31, 1973.

32.8 	Sec. 71. Minnesota Statutes 2004, section 490.124,
32.9 	subdivision 9, is amended to read:
32.10 		Subd. 9.Survivors' annuity. (a) Upon the death of a
32.11 	judge prior to before retirement, or upon the death of a person
32.12 	who has qualified for an annuity under this section but who
32.13 	ceases to be a judge prior to before retirement and has who not
32.14 	received a refund of contributions pursuant to under subdivision
32.15 	12, a surviving spouse is entitled to,or, if there be no
32.16 	surviving spouse, dependent children, shall are entitled to 
32.17 	receive an annuity, payable monthly, equal in total to 60
32.18 	percent of the normal retirement annuity which would have been
32.19 	payable to the judge or former judge had the date of death been
32.20 	the normal retirement date, provided that the .
32.21 	(b)  The annuity payable to a surviving spouse or to 
32.22 	dependent children shall receive an annuity is an amount of not
32.23 	less than 25 percent of the judge's or the former judge's final
32.24 	average compensation.
32.25 	If a judge, whose surviving spouse was not entitled to
32.26 	survivors benefits provided solely for judges under statutes in
32.27 	effect prior to January 1, 1974, shall have died prior to
32.28 	retirement on or after May 23, 1973 and before January 1, 1974,
32.29 	a surviving spouse and dependent children, if any, shall be
32.30 	entitled to survivors benefits as provided hereunder as if such
32.31 	judge had died on January 1, 1974.

32.32 	Sec. 72. Minnesota Statutes 2004, section 490.124,
32.33 	subdivision 10, is amended to read:
32.34 		Subd. 10.Prior survivors' benefits; limitation. (a) 
32.35 	Benefits provided pursuant to under Minnesota Statutes 2004,
32.36 	section 490.102, subdivision 6, or 490.1091, for a surviving
33.1 	spouse of a retired judge, payable after the death of the judge,
33.2 	shall be are limited to:
33.3 	(a) spouses of judges who have retired prior to before 
33.4 	January 1, 1974; and .
33.5 	(b) spouses of judges in office on December 31, 1973 and
33.6 	thereafter who elect to continue contributions pursuant to
33.7 	section 490.102, subdivision 6 or 490.109.  The contributions
33.8 	shall be in addition to contributions pursuant to section
33.9 	490.123, and upon retirement the judge may not elect to receive
33.10 	any optional annuity pursuant to subdivision 11 unless the judge
33.11 	and the spouse shall waive any benefits pursuant to section
33.12 	490.102, subdivision 6 or 490.1091.
33.13 	No other judge in office on or after January 1, 1974, shall
33.14 	be is required to contribute pursuant to under Minnesota
33.15 	Statutes 2004,section 490.102, subdivision 6,or 490.109.

33.16 	Sec. 73. Minnesota Statutes 2004, section 490.124,
33.17 	subdivision 11, is amended to read:
33.18 		Subd. 11.limitation on survivor benefits;optional
33.19 	annuities. (a) No survivor or death benefits may be paid in
33.20 	connection with the death of a judge who retires after December
33.21 	31, 1973, except as otherwise provided in sections 490.121 to
33.22 	490.132.
33.23 	(b) Except as provided in subdivision 10, a judge may elect
33.24 	to receive, instead of the normal retirement annuity, an
33.25 	optional retirement annuity in the form of either (1) an annuity
33.26 	payable for a period certain and for life after that period, (2) 
33.27 	a joint and survivor annuity without reinstatement in the event
33.28 	of if the designated beneficiary predeceasing predeceases the
33.29 	retired judge, or (3) a joint and survivor annuity with
33.30 	reinstatement in the event of if the designated beneficiary
33.31 	predeceasing predeceases the retired judge.
33.32 	(c) An optional retirement annuity must be actuarially
33.33 	equivalent to a single-life annuity with no term certain and
33.34 	must be established by the board of directors of the Minnesota
33.35 	State Retirement System.  In establishing these optional
33.36 	retirement annuity forms, the board shall obtain the written
34.1 	recommendation of the actuary retained by the Legislative
34.2 	Commission on Pensions and Retirement under section 356.214.
34.3 	The recommendations must be retained as a part of the permanent
34.4 	records of the board.

34.5 	Sec. 74. Minnesota Statutes 2004, section 490.124,
34.6 	subdivision 12, is amended to read:
34.7 		Subd. 12.Refund.  (a) A person who ceases to be a
34.8 	judge but who does not qualify for a retirement annuity or other
34.9 	benefit under section 490.121is entitled to a refund in an
34.10 	amount that is equal to all of the member's employee
34.11 	contributions to the judges' retirement fund plus interest
34.12 	computed under section 352.22, subdivision 2.
34.13 	(b) A refund of contributions under paragraph (a)
34.14 	terminates all service credits and all rights and benefits of
34.15 	the judge and the judge's survivors under this chapter.
34.16 	(c) A person who becomes a judge again after taking a
34.17 	refund under paragraph (a) may reinstate the previously
34.18 	terminated allowable service credits credit, rights, and
34.19 	benefits by repaying the total amount of the previously received
34.20 	refund.  The refund repayment must include interest on the total
34.21 	amount previously received at an annual rate of 8.5 percent,
34.22 	compounded annually,from the date on which the refund was
34.23 	received until the date on which the refund is repaid.

34.24 	Sec. 75. Minnesota Statutes 2004, section 490.124,
34.25 	subdivision 13, is amended to read:
34.26 		Subd. 13.Death refund.  If a judge who has not received
34.27 	other benefits under this chapter dies and there are no survivor
34.28 	benefits payable under this chapter, a refund plus interest as
34.29 	provided in subdivision 12 is payable to the last designated
34.30 	beneficiary named on a form filed with the director before the
34.31 	death of the judge, or,if no designation is on file, the refund
34.32 	is payable to the estate of the deceased judge.

34.33 	Sec. 76. Minnesota Statutes 2004, section 490.125,
34.34 	subdivision 1, is amended to read:
34.35 		Subdivision 1.Mandatory retirement age.  Except as
34.36 	otherwise provided in sections 490.121 to 490.132, each a judge
35.1 	shall retire terminate active service as a judge on the judge's
35.2 	mandatory retirement date.

35.3 	Sec. 77. Minnesota Statutes 2004, section 490.125,
35.4 	subdivision 2, is amended to read:
35.5 		Subd. 2.Exception. Except as provided by sections
35.6 	490.025, subdivision 3, 490.102, subdivisions 3 and 3a and
35.7 	490.12, subdivision 2,Any judge in office on December 31, 1973
35.8 	who shall have attained 70 years of age on or prior to such date
35.9 	shall retire upon the expiration of the term of office of such
35.10 	judge.

35.11 	Sec. 78. Minnesota Statutes 2004, section 490.126, is
35.12 	amended to read:
35.13 	490.126 PROCEDURES.
35.14 		Subdivision 1.Compulsory retirement. Proceedings for
35.15 	compulsory retirement of a judge, if necessary, shall must be
35.16 	conducted in accordance with rules issued by the Supreme Court
35.17 	pursuant to under section 490.16 490A.02.
35.18 		Subd. 2.Vacancies. Any judge may make written
35.19 	application to the governor for retirement.  The governor
35.20 	thereupon shall direct the judge's retirement by written order
35.21 	which, when filed in the Office of the Secretary of State, shall
35.22 	effect effects a vacancy in the office to be filled as provided
35.23 	by law.
35.24 		Subd. 3.Application for annuity or refund. An 
35.25 	application for an annuity or a refund under sections 490.121 to
35.26 	490.132 may be made by the potential annuitant or by someone
35.27 	authorized to act for the potential annuitant.  Every
35.28 	application for an annuity or refund, with accompanied by a 
35.29 	proof of age and by a record of years of service when
35.30 	required, shall must be submitted to the governing
35.31 	body executive director of the Minnesota State Retirement System
35.32 	in a form prescribed by it the director.
35.33 		Subd. 4.Manner of payment. Unless otherwise
35.34 	specifically provided by statute or agreed upon by the annuitant
35.35 	and the governing body board of directors of the Minnesota State
35.36 	Retirement System, annuities payable under sections 490.121 to
36.1 	490.132 shall must be paid in the manner and at the intervals as
36.2 	prescribed by the executive director of the Minnesota State
36.3 	Retirement System.  The annuity shall cease ceases with the last
36.4 	payment received by the annuitant while living.
36.5 		Subd. 5.Exemption from process; no assignment. None of
36.6 	the money, annuities, or other benefits provided in this chapter
36.7 	is assignable either in law or equity or is subject to state
36.8 	estate tax, or to execution, levy, attachment, garnishment, or
36.9 	other legal process, except as provided in section 518.58,
36.10 	518.581, or 518.6111.

36.11 	Sec. 79. Minnesota Statutes 2004, section 490.133, is
36.12 	amended to read:
36.13 	490.133 RETIREMENT; TRANSITION PROVISIONS; TRANSFER TO
36.14 	COURT OF APPEALS.
36.15 	(a) If a judge to whom or to whose survivors benefits would
36.16 	be payable under Minnesota Statutes 2004,sections 490.101 to
36.17 	490.12, is elected or appointed to the Court of Appeals, that
36.18 	judge and the judge's survivors, shall continue to be eligible
36.19 	for benefits under those sections and not under sections 490.121
36.20 	to 490.132.
36.21 	(b) In that the case of a judge to whom paragraph (a)
36.22 	applies, the service of the judge in the Court of Appeals shall 
36.23 	must be added to the prior service as district judge, probate
36.24 	judge, or judge of any other court of record in determining
36.25 	eligibility and the compensation of a judge of the Court of
36.26 	Appeals at the time of the judge's death, disability, or
36.27 	retirement shall be is the "compensation allotted to the office"
36.28 	for the purposes of calculating benefit amounts.
36.29 	(c) All other judges of the Court of Appeals and their
36.30 	survivors shall be are subject to the retirement and survivor's
36.31 	annuity provisions of sections 490.121 to 490.132.

36.32 	Sec. 80. [490A.01] BOARD OF JUDICIAL STANDARDS;
36.33 	ESTABLISHMENT.
36.34 		Subdivision 1.Establishment; composition. The Board on
36.35 	Judicial Standards is established.  The board is a continuation
36.36 	of the board established by Laws 1971, chapter 909, sections 1
37.1 	and 2, as amended.  For the purposes of this chapter, "board"
37.2 	means the Board on Judicial Standards.
37.3 		Subd. 2.Composition; appointment. (a) The board
37.4 	consists of one judge of the Court of Appeals, three trial court
37.5 	judges, two lawyers who have practiced law in the state for at
37.6 	least ten years, and four citizens who are not judges, retired
37.7 	judges, or lawyers.
37.8 	(b) All members must be appointed by the governor with the
37.9 	advice and consent of the senate.  Senate confirmation is not
37.10 	required for judicial members.
37.11 		Subd. 3.Term maximum; membership termination. No member
37.12 	may serve more than two full four-year terms or their equivalent.
37.13 	Membership terminates if a member ceases to hold the position
37.14 	that qualified the member for appointment.
37.15 		Subd. 4.Member terms; compensation; removal. The
37.16 	membership terms, compensation, removal of members, and filling
37.17 	of vacancies on the board are as provided in section 15.0575.
37.18 		Subd. 5.Executive secretary appointment; salary. (a)
37.19 	The board shall appoint the executive secretary.
37.20 	(b) The salary of the executive secretary of the board is
37.21 	85 percent of the maximum salary provided for an administrative
37.22 	law judge under section 15A.083, subdivision 6a.

37.23 	Sec. 81. [490A.02] JUDICIAL STANDARDS BOARD; POWERS.
37.24 		Subdivision 1.Judicial disqualification. A judge is
37.25 	disqualified from acting as a judge, without a loss of salary,
37.26 	while there is pending an indictment or any information charging
37.27 	the judge with a crime that is punishable as a felony under
37.28 	either Minnesota law or federal law, or while there is pending a
37.29 	recommendation to the Supreme Court by the Board on Judicial
37.30 	Standards for the judge's removal or retirement.
37.31 		Subd. 2.Judicial suspension. On receipt of a
37.32 	recommendation of the Board on Judicial Standards or on its own
37.33 	motion, the Supreme Court may suspend a judge from office
37.34 	without salary when the judge pleads guilty to or no contest to
37.35 	or is found guilty of a crime that is punishable as a felony
37.36 	under either Minnesota law or federal law or any other crime
38.1 	that involves moral turpitude.  If the conviction is reversed,
38.2 	the suspension terminates and the judge must be paid a salary
38.3 	for the period of suspension.  If the judge is suspended and the
38.4 	conviction becomes final, the Supreme Court shall remove the
38.5 	judge from office.
38.6 		Subd. 3.Judicial disability. On receipt of a
38.7 	recommendation of the Board on Judicial Standards, the Supreme
38.8 	Court may retire a judge for a disability that the court
38.9 	determines seriously interferes with the performance of the
38.10 	judge's duties and is or is likely to become permanent, and
38.11 	censure or remove a judge for an action or inaction that may
38.12 	constitute persistent failure to perform the judge's duties,
38.13 	incompetence in performing the judge's duties, habitual
38.14 	intemperance, or conduct prejudicial to the administration of
38.15 	justice that brings the judicial office into disrepute.
38.16 		Subd. 4.Authority to reopen matters. The board is
38.17 	specifically empowered to reopen any matter wherein any
38.18 	information or evidence was previously precluded by a statute of
38.19 	limitations or by a previously existing provision of time
38.20 	limitation.
38.21 		Subd. 5.Retirement status. (a) A judge who is retired
38.22 	by the Supreme Court must be considered to have retired
38.23 	voluntarily.
38.24 	(b) This section and section 490A.01 must not affect the
38.25 	right of a judge who is suspended, retired, or removed hereunder
38.26 	from qualifying for any pension or other retirement benefits to
38.27 	which the judge would otherwise be entitled by law to receive.
38.28 		Subd. 6.Eligibility for judicial office; practice
38.29 	law. A judge removed by the Supreme Court is ineligible for any
38.30 	future service in a judicial office.  The question of the right
38.31 	of a removed judge to practice law in this state must be
38.32 	referred to the proper authority for review.
38.33 		Subd. 7.Supreme court rules. The Supreme Court shall
38.34 	make rules to implement this section.

38.35 	Sec. 82. [490A.03] PERSONS AFFECTED.
38.36 	The provisions of sections 490A.01 and 490A.02 apply to all
39.1 	judges, judicial officers, and referees.

39.2 	Sec. 83. Minnesota Statutes 2004, section 525.05, is
39.3 	amended to read:
39.4 	525.05 JUDGE OR REFEREE; GROUNDS FOR DISQUALIFICATION.
39.5 	The following shall be grounds for disqualification of any
39.6 	judge or referee from acting in any matter:  (1) That the judge
39.7 	or the judge's spouse or any of either of their kin nearer than
39.8 	first cousin is interested as representative, heir, devisee,
39.9 	legatee, ward, or creditor in the estate involved therein; (2)
39.10 	that it involves the validity or interpretation of a will drawn
39.11 	or witnessed by the judge; (3) that the judge may be a necessary
39.12 	witness in the matter; (4) that it involves a property right in
39.13 	respect to which the judge has been engaged or is engaged as an
39.14 	attorney; or (5) that the judge was engaged in a joint
39.15 	enterprise for profit with the decedent at the time of death or
39.16 	that the judge is then engaged in a joint enterprise for profit
39.17 	with any person interested in the matter as representative,
39.18 	heir, devisee, legatee, ward, or creditor.  When grounds for
39.19 	disqualification exist, the judge may, and upon proper petition
39.20 	of any person interested in the estate must, request another
39.21 	judge or a judge who has retired as provided in section 490.12,
39.22 	subdivision 2,to act in the judge's stead in the matter.

39.23 	Sec. 84. REPEALER; EFFECT ON BENEFIT COVERAGE.
 39.24 		Subdivision 1.Legislators retirement plan; repealed as
39.25 	obsolete. Minnesota Statutes 2004, sections 3A.01, subdivisions
39.26 	3, 4, 6a, and 7; 3A.02, subdivision 2; 3A.04, subdivision 1a;
39.27 	and 3A.09, are repealed.
39.28 		Subd. 2.Elective state officers retirement plan;
39.29 	repealed as obsolete. Minnesota Statutes 2004, sections
39.30 	352C.01; 352C.011; 352C.021; 352C.031; 352C.033; 352C.04;
39.31 	352C.051; 352C.09; and 352C.091, subdivisions 2 and 3, are
39.32 	repealed.
39.33 		Subd. 3.Judicial retirement plans; repealed as
39.34 	obsolete. Minnesota Statutes 2004, sections 490.021; 490.025;
39.35 	490.101; 490.102; 490.103; 490.105; 490.106; 490.107; 490.108;
39.36 	490.109; 490.1091; 490.12; 490.121, subdivisions 2, 3, 5, 8, 9,
40.1 	10, 11, 12, 16, 17, 18, 19, and 20; 490.124, subdivision 6; and
40.2 	490.132, are repealed.
40.3 		Subd. 4.Judicial standards board; repealed for
40.4 	relocation as minnesota statutes, chapter 490a. Minnesota
40.5 	Statutes 2004, sections 490.15, 490.16, and 490.18, are repealed.
40.6 		Subd. 5.Uniform judicial retirement plan; no benefit
40.7 	diminishment intended; procedure. Sections 36 to 79 are not
40.8 	intended to reduce or increase the entitlement of active,
40.9 	deferred, or retired judges to retirement annuities or benefits
40.10 	as of July 1, 2005, as reflected in the records of the Minnesota
40.11 	State Retirement System.  If the executive director of the
40.12 	Minnesota State Retirement System determines that any provisions
40.13 	of sections 36 to 79 function to modify, impair, or diminish the
40.14 	retirement annuity or benefit entitlement of any judge that had
40.15 	accrued or earned before July 1, 2005, the executive director
40.16 	shall certify that determination and a recommendation as to the
40.17 	required legislative correction to the chair of the Legislative
40.18 	Commission on Pensions and Retirement, the chair of the senate
40.19 	State and Local Government Operations Committee, the chair of
40.20 	the house Governmental Operations and Veterans Affairs Policy
40.21 	Committee, and the executive director of the Legislative
40.22 	Commission on Pensions and Retirement on or before the October 1
40.23 	next following that determination.

40.24 	Sec. 85. REVISOR INSTRUCTIONS.
 40.25 	(a) In Minnesota Statutes, chapters 352, 352D, 355, 356,
40.26 	and 487, the revisor of statutes shall change references to
40.27 	"sections 490.121 to 490.132" to "chapter 490".
40.28 	(b) In Minnesota Statutes, chapter 490, the revisor of
40.29 	statutes shall change references to "sections 490.121 to
40.30 	490.132" to "this chapter".
40.31 	(c) In Minnesota Statutes, sections 175A.01, subdivision 4,
40.32 	and 271.01, subdivision 1, the revisor of statutes shall change
40.33 	references to "sections 490.15 and 490.16" to "sections 490A.01
40.34 	and 490A.02".

40.35 	Sec. 86. EFFECTIVE DATE.
 40.36 	Sections 1 to 84 are effective on July 1, 2005.

41.1 	ARTICLE 2
41.2 	COVERED SALARY; AVERAGE SALARY

41.3 	Section 1. Minnesota Statutes 2004, section 352.01,
41.4 	subdivision 13, is amended to read:
41.5 		Subd. 13.Salary.  (a) Subject to the limitations of
41.6 	section 356.611,"salary" means wages, or other periodic
41.7 	compensation, paid to an employee before deductions for deferred
41.8 	compensation, supplemental retirement plans, or other voluntary
41.9 	salary reduction programs.
41.10 	(b) "Salary" does not include:
41.11 	(1) lump sum sick leave payments;
41.12 	(2) severance payments;
41.13 	(3) lump sum annual leave payments and overtime payments
41.14 	made at the time of separation from state service;
41.15 	(4) payments in lieu of any employer-paid group insurance
41.16 	coverage, including the difference between single and family
41.17 	rates that may be paid to an employee with single coverage;
41.18 	(5) payments made as an employer-paid fringe benefit;
41.19 	(6) workers' compensation payments;
41.20 	(7) employer contributions to a deferred compensation or
41.21 	tax sheltered annuity program; and
41.22 	(8) amounts contributed under a benevolent vacation and
41.23 	sick leave donation program.
41.24 	(c) Amounts provided to an employee by the employer through
41.25 	a grievance proceeding or a legal settlement are salary only if
41.26 	the settlement is reviewed by the executive director and the
41.27 	amounts are determined by the executive director to be
41.28 	consistent with paragraph (a) and prior determinations.

41.29 	Sec. 2. Minnesota Statutes 2004, section 352.01, is
41.30 	amended by adding a subdivision to read:
41.31 		Subd. 14a.Average salary. (a) "Average salary" means
41.32 	the average of the highest five successive years of salary upon
41.33 	which the employee has made contributions to the retirement fund
41.34 	by payroll deductions.  Average salary must be based upon all
41.35 	allowable service if this service is less than five years.
41.36 	(b) "Average salary" does not include the payment of
42.1 	accrued unused annual leave or overtime paid at time of final
42.2 	separation from state service if paid in a lump sum nor does it
42.3 	include the reduced salary, if any, paid during the period the
42.4 	employee is entitled to workers' compensation benefit payments
42.5 	for temporary disability.
42.6 	(c) For an employee covered by the correctional state
42.7 	employees retirement plan, "average salary" means the average of
42.8 	the monthly salary during the employee's highest five successive
42.9 	years of salary as an employee covered by the general state
42.10 	employees retirement plan, or the correctional state employees
42.11 	retirement plan, or by a combination of the two.  If the total
42.12 	of the covered service is less than five years, the
42.13 	determination of average salary must be based on all allowable
42.14 	service.

42.15 	Sec. 3. Minnesota Statutes 2004, section 352.115,
42.16 	subdivision 2, is amended to read:
42.17 		Subd. 2.average salary normal retirement annuity.  The
42.18 	retirement annuity hereunder payable at normal retirement age or
42.19 	thereafter must be computed in accordance with the applicable
42.20 	provisions of the formula stated in subdivision 3, on the basis
42.21 	of the employee's average salary for the period of allowable
42.22 	service.  This retirement annuity is known as the "normal"
42.23 	retirement annuity.
42.24 	For each year of allowable service, "average salary" of an
42.25 	employee in determining a retirement annuity means the average
42.26 	of the highest five successive years of salary upon which the
42.27 	employee has made contributions to the retirement fund by
42.28 	payroll deductions.  Average salary must be based upon all
42.29 	allowable service if this service is less than five years.
42.30 	"Average salary" does not include the payment of accrued
42.31 	unused annual leave or overtime paid at time of final separation
42.32 	from state service if paid in a lump sum nor does it include the
42.33 	reduced salary, if any, paid during the period the employee is
42.34 	entitled to workers' compensation benefit payments for temporary
42.35 	disability.

42.36 	Sec. 4. Minnesota Statutes 2004, section 352.115,
43.1 	subdivision 3, is amended to read:
43.2 		Subd. 3.Retirement annuity formula.  (a) This paragraph,
43.3 	in conjunction with section 352.116, subdivision 1, applies to a
43.4 	person who became a covered employee or a member of a pension
43.5 	fund listed in section 356.30, subdivision 3, before July 1,
43.6 	1989, unless paragraph (b), in conjunction with section 352.116,
43.7 	subdivision 1a, produces a higher annuity amount, in which case
43.8 	paragraph (b) will apply.  The employee's average salary, as
43.9 	defined in section 352.01,subdivision 2 14a, multiplied by the
43.10 	percent specified in section 356.315, subdivision 1, per year of
43.11 	allowable service for the first ten years and the percent
43.12 	specified in section 356.315, subdivision 2, for each later year
43.13 	of allowable service and pro rata for completed months less than
43.14 	a full year shall determine the amount of the retirement annuity
43.15 	to which the employee is entitled.
43.16 	(b) This paragraph applies to a person who has become at
43.17 	least 55 years old and first became a covered employee after
43.18 	June 30, 1989, and to any other covered employee who has become
43.19 	at least 55 years old and whose annuity amount, when calculated
43.20 	under this paragraph and in conjunction with section 352.116,
43.21 	subdivision 1a, is higher than it is when calculated under
43.22 	paragraph (a), in conjunction with section 352.116, subdivision
43.23 	1.  The employee's average salary, as defined in section 352.01,
43.24 	subdivision 2 14a, multiplied by the percent specified in
43.25 	section 356.315, subdivision 2, for each year of allowable
43.26 	service and pro rata for months less than a full year shall
43.27 	determine the amount of the retirement annuity to which the
43.28 	employee is entitled.

43.29 	Sec. 5. Minnesota Statutes 2004, section 352.87,
43.30 	subdivision 3, is amended to read:
43.31 		Subd. 3.Retirement annuity formula.  A person specified
43.32 	in subdivision 1 will have is entitled to receive a retirement
43.33 	annuity applicable for allowable service credit under this
43.34 	section calculated by multiplying the employee's average salary,
43.35 	as defined in section 352.115 352.01, subdivision 2 14a, by the
43.36 	percent specified in section 356.315, subdivision 2a, for each
44.1 	year or portions of a year of allowable service credit.  No
44.2 	reduction for retirement prior to before the normal retirement
44.3 	age, as specified in section 352.01, subdivision 25, applies to
44.4 	service to which this section applies.

44.5 	Sec. 6. Minnesota Statutes 2004, section 352.93,
44.6 	subdivision 1, is amended to read:
44.7 		Subdivision 1.Basis of annuity; when to apply.  After
44.8 	separation from state service, an employee covered under section
44.9 	352.91 who has reached age 55 years and has credit for at least
44.10 	three years of covered correctional service or a combination of
44.11 	covered correctional service and regular Minnesota general
44.12 	employees state retirement System plan service is entitled upon
44.13 	application to a retirement annuity under this section,based
44.14 	only on covered correctional employees' service.  Application
44.15 	may be made no earlier than 60 days before the date the employee
44.16 	is eligible to retire by reason of both age and service
44.17 	requirements.
44.18 	In this section, "average salary" means the average of the
44.19 	monthly salary during the employee's highest five successive
44.20 	years of salary as an employee covered by the Minnesota State
44.21 	Retirement System.  Average salary must be based upon all
44.22 	allowable service if this service is less than five years.

44.23 	Sec. 7. Minnesota Statutes 2004, section 352B.01,
44.24 	subdivision 11, is amended to read:
44.25 		Subd. 11.Average monthly salary.  (a) Subject to the
44.26 	limitations of section 356.611,"average monthly salary" means
44.27 	the average of the highest monthly salaries for five years of
44.28 	service as a member upon which contributions were deducted from
44.29 	pay under section 352B.02, or upon which appropriate
44.30 	contributions or payments were made to the fund to receive
44.31 	allowable service and salary credit as specified under the
44.32 	applicable law.  Average monthly salary must be based upon all
44.33 	allowable service if this service is less than five years.
44.34 	(b) "Average monthly salary" means the salary of the member
44.35 	as defined in section 352.01, subdivision 13.  "Average monthly
44.36 	salary" does not include any lump-sum annual leave payments and
45.1 	overtime payments made at the time of separation from state
45.2 	service, any amounts of severance pay, or any reduced salary
45.3 	paid during the period the person is entitled to workers'
45.4 	compensation benefit payments for temporary disability.
45.5 	(c) A member on leave of absence receiving temporary
45.6 	workers' compensation payments and a reduced salary or no salary
45.7 	from the employer who is entitled to allowable service credit
45.8 	for the period of absence may make payment to the fund for the
45.9 	difference between salary received, if any, and the salary the
45.10 	member would normally receive if not on leave of absence during
45.11 	the period.  The member shall pay an amount equal to the member
45.12 	and employer contribution rate under section 352B.02,
45.13 	subdivisions 1b and 1c, on the differential salary amount for
45.14 	the period of the leave of absence.  The employing department,
45.15 	at its option, may pay the employer amount on behalf of the
45.16 	member.  Payment made under this subdivision must include
45.17 	interest at the rate of 8.5 percent per year, and must be
45.18 	completed within one year of the return from the leave of
45.19 	absence.

45.20 	Sec. 8. Minnesota Statutes 2004, section 352C.021, is
45.21 	amended by adding a subdivision to read:
45.22 		Subd. 1a.Average salary. "Average salary," for purposes
45.23 	of calculating the normal retirement annuity under section
45.24 	352C.031, subdivision 4, means the average of the highest five
45.25 	successive years of salary upon which contributions have been
45.26 	made under section 352C.09.

45.27 	Sec. 9. Minnesota Statutes 2004, section 353.01,
45.28 	subdivision 10, is amended to read:
45.29 		Subd. 10.Salary.  (a) Subject to the limitations of
45.30 	section 356.611,"salary" means:
45.31 	(1) the periodic compensation of a public employee, before
45.32 	deductions for deferred compensation, supplemental retirement
45.33 	plans, or other voluntary salary reduction programs, and also
45.34 	means "wages" and includes net income from fees;
45.35 	(2) for a public employee who is covered by a supplemental
45.36 	retirement plan under section 356.24, subdivision 1, clause (8),
46.1 	(9), or (10), which require all plan contributions be made by
46.2 	the employer, the contribution to the applicable supplemental
46.3 	retirement plan when the contribution is from mandatory
46.4 	withholdings from employees' wages;and
46.5 	(2) (3) for a public employee who has prior service covered
46.6 	by a local police or firefighters relief association that has
46.7 	consolidated with the Public Employees Retirement Association or
46.8 	to which section 353.665 applies and who has elected coverage
46.9 	either under the public employees police and fire fund benefit
46.10 	plan under section 353A.08 following the consolidation or under
46.11 	section 353.665, subdivision 4, the rate of salary upon which
46.12 	member contributions to the special fund of the relief
46.13 	association were made prior to the effective date of the
46.14 	consolidation as specified by law and by bylaw provisions
46.15 	governing the relief association on the date of the initiation
46.16 	of the consolidation procedure and the actual periodic
46.17 	compensation of the public employee after the effective date of
46.18 	consolidation.
46.19 	(b) Salary does not mean:
46.20 	(1) the fees paid to district court reporters, unused
46.21 	annual vacation or sick leave payments, in lump-sum or periodic
46.22 	payments, severance payments, reimbursement of expenses,
46.23 	lump-sum settlements not attached to a specific earnings period,
46.24 	or workers' compensation payments;
46.25 	(2) employer-paid amounts used by an employee toward the
46.26 	cost of insurance coverage, employer-paid fringe benefits,
46.27 	flexible spending accounts, cafeteria plans, health care expense
46.28 	accounts, day care expenses, or any payments in lieu of any
46.29 	employer-paid group insurance coverage, including the difference
46.30 	between single and family rates that may be paid to a member
46.31 	with single coverage and certain amounts determined by the
46.32 	executive director to be ineligible;
46.33 	(3) the amount equal to that which the employing
46.34 	governmental subdivision would otherwise pay toward single or
46.35 	family insurance coverage for a covered employee when, through a
46.36 	contract or agreement with some but not all employees, the
47.1 	employer:
47.2 	(i) discontinues, or for new hires does not provide,
47.3 	payment toward the cost of the employee's selected insurance
47.4 	coverages under a group plan offered by the employer;
47.5 	(ii) makes the employee solely responsible for all
47.6 	contributions toward the cost of the employee's selected
47.7 	insurance coverages under a group plan offered by the employer,
47.8 	including any amount the employer makes toward other employees'
47.9 	selected insurance coverages under a group plan offered by the
47.10 	employer; and
47.11 	(iii) provides increased salary rates for employees who do
47.12 	not have any employer-paid group insurance coverages;
47.13 	(4) except as provided in section 353.86 or 353.87,
47.14 	compensation of any kind paid to volunteer ambulance service
47.15 	personnel or volunteer firefighters, as defined in subdivision
47.16 	35 or 36; and
47.17 	(5) the amount of compensation that exceeds the limitation
47.18 	provided in section 356.611.
47.19 	(c) Amounts provided to an employee by the employer through
47.20 	a grievance proceeding or a legal settlement are salary only if
47.21 	the settlement is reviewed by the executive director and the
47.22 	amounts are determined by the executive director to be
47.23 	consistent with paragraph (a) and prior determinations.

47.24 	Sec. 10. Minnesota Statutes 2004, section 353.01, is
47.25 	amended by adding a subdivision to read:
47.26 		Subd. 17a.Average salary. (a) "Average salary," for
47.27 	purposes of calculating a retirement annuity under section
47.28 	353.29, subdivision 3, means an amount equivalent to the average
47.29 	of the highest salary of the member, police officer, or
47.30 	firefighter, whichever applies, upon which employee
47.31 	contributions were paid for any five successive years of
47.32 	allowable service, based on dates of salary periods as listed on
47.33 	salary deduction reports.  Average salary must be based upon all
47.34 	allowable service if this service is less than five years.
47.35 	(b) "Average salary" may not include any reduced salary
47.36 	paid during a period in which the employee is entitled to
48.1 	benefit payments from workers' compensation for temporary
48.2 	disability, unless the average salary is higher, including this
48.3 	period.

48.4 	Sec. 11. Minnesota Statutes 2004, section 353.29,
48.5 	subdivision 3, is amended to read:
48.6 		Subd. 3.Retirement annuity formula.  (a) This paragraph,
48.7 	in conjunction with section 353.30, subdivisions 1, 1a, 1b, and
48.8 	1c, applies to any member who first became a public employee or
48.9 	a member of a pension fund listed in section 356.30, subdivision
48.10 	3, before July 1, 1989, unless paragraph (b), in conjunction
48.11 	with section 353.30, subdivision 5, produces a higher annuity
48.12 	amount, in which case paragraph (b) will apply.  The average
48.13 	salary as defined in section 353.01,subdivision 2 17a,
48.14 	multiplied by the percent specified in section 356.315,
48.15 	subdivision 3, for each year of allowable service for the first
48.16 	ten years and thereafter by the percent specified in section
48.17 	356.315, subdivision 4, per year of allowable service and
48.18 	completed months less than a full year for the "basic member,"
48.19 	and the percent specified in section 356.315, subdivision 1, for
48.20 	each year of allowable service for the first ten years and
48.21 	thereafter by the percent specified in section 356.315,
48.22 	subdivision 2, per year of allowable service and completed
48.23 	months less than a full year for the "coordinated member," shall
48.24 	determine the amount of the "normal" retirement annuity.
48.25 	(b) This paragraph applies to a member who has become at
48.26 	least 55 years old and first became a public employee after June
48.27 	30, 1989, and to any other member whose annuity amount, when
48.28 	calculated under this paragraph and in conjunction with section
48.29 	353.30, subdivision 5, is higher than it is when calculated
48.30 	under paragraph (a), in conjunction with section 353.30,
48.31 	subdivisions 1, 1a, 1b, and 1c.  The average salary, as defined
48.32 	in section 353.01,subdivision 2 17a, multiplied by the percent
48.33 	specified in section 356.315, subdivision 4, for each year of
48.34 	allowable service and completed months less than a full year for
48.35 	a basic member and the percent specified in section 356.315,
48.36 	subdivision 2, per year of allowable service and completed
49.1 	months less than a full year for a coordinated member, shall
49.2 	determine the amount of the normal retirement annuity.

49.3 	Sec. 12. Minnesota Statutes 2004, section 353.33,
49.4 	subdivision 3, is amended to read:
49.5 		Subd. 3.Computation of benefits.  This disability
49.6 	benefit is an amount equal to the normal annuity payable to a
49.7 	member who has reached normal retirement age with the same
49.8 	number of years of allowable service and the same average
49.9 	salary, as provided in section 353.01, subdivision 17a, and 
49.10 	section 353.29, subdivisions 2 and subdivision 3.
49.11 	A basic member shall receive a supplementary monthly
49.12 	benefit of $25 to age 65 or the five-year anniversary of the
49.13 	effective date of the disability benefit, whichever is later.
49.14 	If the disability benefits under this subdivision exceed
49.15 	the average salary as defined in section 353.29 353.01,
49.16 	subdivision 2 17a, the disability benefits must be reduced to an
49.17 	amount equal to said the average salary.

49.18 	Sec. 13. Minnesota Statutes 2004, section 353.651,
49.19 	subdivision 3, is amended to read:
49.20 		Subd. 3.Retirement annuity formula.  The average salary
49.21 	as defined in section 353.01,subdivision 2 17a, multiplied by
49.22 	the percent specified in section 356.315, subdivision 6, per
49.23 	year of allowable service determines the amount of the normal
49.24 	retirement annuity.  If the member has earned allowable service
49.25 	for performing services other than those of a police officer or
49.26 	firefighter, the annuity representing such that service is must
49.27 	be computed under sections 353.29 and 353.30.

49.28 	Sec. 14. Minnesota Statutes 2004, section 353.656,
49.29 	subdivision 1, is amended to read:
49.30 		Subdivision 1.In line of duty; computation of benefits.
 49.31 	A member of the police and fire plan who becomes disabled and
49.32 	physically unfit to perform duties as a police officer,
49.33 	firefighter, or paramedic as defined under section 353.64,
49.34 	subdivision 10, as a direct result of an injury, sickness, or
49.35 	other disability incurred in or arising out of any act of duty,
49.36 	which has or is expected to render the member physically or
50.1 	mentally unable to perform the duties as a police officer,
50.2 	firefighter, or paramedic as defined under section 353.64,
50.3 	subdivision 10, for a period of at least one year, shall receive
50.4 	disability benefits during the period of such disability.  The
50.5 	benefits must be in an amount equal to 60 percent of the
50.6 	"average salary" as defined in section 353.651 353.01,
50.7 	subdivision 2 17a, plus an additional percent specified in
50.8 	section 356.315, subdivision 6, of that average salary for each
50.9 	year of service in excess of 20 years.  If the disability under
50.10 	this subdivision occurs before the member has at least five
50.11 	years of allowable service credit in the police and fire plan,
50.12 	the disability benefit must be computed on the "average salary"
50.13 	from which deductions were made for contribution to the police
50.14 	and fire fund.

50.15 	Sec. 15. Minnesota Statutes 2004, section 353B.02,
50.16 	subdivision 10, is amended to read:
50.17 		Subd. 10.Salary.  (a) "Salary" under this chapter is
50.18 	subject to the limitations of section 356.611.
50.19 	(b) "Salary" for benefit computation and contribution
50.20 	purposes means the salary of a first class or first grade
50.21 	firefighter or patrol officer, whichever applies, for the former
50.22 	members of the following consolidating relief associations:
50.23 	(1) Anoka Police Relief Association;
50.24 	(2) Austin Firefighters Relief Association;
50.25 	(3) Austin Police Relief Association;
50.26 	(4) Columbia Heights Fire Department Relief Association,
50.27 	Paid Division;
50.28 	(5) Fairmont Police Benefit Association;
50.29 	(6) Faribault Fire Department Relief Association;
50.30 	(7) Mankato Fire Department Relief Association;
50.31 	(8) Minneapolis Fire Department Relief Association;
50.32 	(9) Minneapolis Police Relief Association;
50.33 	(10) Richfield Fire Department Relief Association;
50.34 	(11) Rochester Fire Department Relief Association;
50.35 	(12) Rochester Police Relief Association;
50.36 	(13) St. Cloud Fire Department Relief Association;
51.1 	(14) St. Cloud Police Relief Association;
51.2 	(15) St. Paul Fire Department Relief Association;
51.3 	(16) South St. Paul Firefighters Relief Association;
51.4 	(17) West St. Paul Firefighters Relief Association;
51.5 	(18) West St. Paul Police Relief Association; and
51.6 	(19) Winona Fire Department Relief Association.
51.7 	(b) (c) "Salary" for benefit computation purposes means the
51.8 	salary of a first grade patrol officer for the second month of
51.9 	the previous fiscal year and for contribution purposes means the
51.10 	current salary of a first grade patrol officer, for the former
51.11 	members of the following consolidating relief associations:
51.12 	(1) Bloomington Police Relief Association;
51.13 	(2) Crystal Police Relief Association;
51.14 	(3) Fridley Police Pension Association;
51.15 	(4) Richfield Police Relief Association;
51.16 	(5) St. Louis Park Police Relief Association; and
51.17 	(6) Winona Police Relief Association.
51.18 	(c) (d) "Salary" for benefit computation purposes means the
51.19 	final salary and for contribution purposes means the current
51.20 	salary for the former members of the following consolidating
51.21 	relief associations:
51.22 	(1) Albert Lea Firefighters Relief Association;
51.23 	(2) Albert Lea Police Relief Association;
51.24 	(3) Buhl Police Relief Association;
51.25 	(4) Chisholm Firefighters Relief Association;
51.26 	(5) Crookston Fire Department Relief Association;
51.27 	(6) Crookston Police Relief Association;
51.28 	(7) Faribault Police Benefit Association;
51.29 	(8) Red Wing Police Relief Association; and
51.30 	(9) Virginia Fire Department Relief Association.
51.31 	(d) (e) "Salary" for benefit computation purposes means the
51.32 	average earnings or salary for the final six months of
51.33 	employment before retirement and for contribution purposes means
51.34 	the current salary for the former members of the following
51.35 	consolidating relief associations:
51.36 	(1) Chisholm Police Relief Association;
52.1 	(2) Hibbing Firefighters Relief Association; and
52.2 	(3) Hibbing Police Relief Association.
52.3 	(e) (f) "Salary" for benefit computation purposes means the
52.4 	greater of the final salary at retirement or the highest salary
52.5 	of a patrol officer and for contribution purposes means the
52.6 	greater of the current salary or the current highest salary of a
52.7 	patrol officer for the former members of the following
52.8 	consolidating relief associations:
52.9 	(1) Brainerd Police Benefit Association; and
52.10 	(2) New Ulm Police Relief Association.
52.11 	(f) (g) "Salary" for benefit computation and contribution
52.12 	purposes means the following for the former members of the
52.13 	consolidating relief associations as indicated:
52.14 	(1) salary of a top grade patrol officer, including
52.15 	longevity pay and education incentive pay in an amount not to
52.16 	exceed $235 per month, Columbia Heights Police Relief
52.17 	Association;
52.18 	(2) maximum pay of a firefighter, including overtime
52.19 	payments for a regular workweek of a firefighter mandated by the
52.20 	federal Fair Labor Standards Act of 1938, as amended, Duluth
52.21 	Firefighters Relief Association;
52.22 	(3) salary of a first class patrol officer with 16 years of
52.23 	service, Duluth Police Pension Association;
52.24 	(4) base salary for the rank currently held, plus longevity
52.25 	pay, pay for eligibility for next higher rank and pay for first
52.26 	aid care, Mankato Police Benefit Association;
52.27 	(5) average annual salary for highest three paid years for
52.28 	benefit computation purposes and current salary for contribution
52.29 	purposes, Red Wing Fire Department Relief Association;
52.30 	(6) pay of the highest grade full-time firefighter, St.
52.31 	Louis Park Fire Department Relief Association;
52.32 	(7) maximum monthly pay of a patrol officer, St. Paul
52.33 	Police Relief Association;
52.34 	(8) prevailing base pay of rank held at retirement for
52.35 	benefit computation purposes and current salary for contribution
52.36 	purposes, South St. Paul Police Relief Association; and
53.1 	(9) prevailing pay for rank held for at least six months
53.2 	before retirement for benefit computation purposes and current
53.3 	salary for contribution purposes, Virginia Police Relief
53.4 	Association.

53.5 	Sec. 16. Minnesota Statutes 2004, section 354.05, is
53.6 	amended by adding a subdivision to read:
53.7 		Subd. 13a.Average salary. (a) "Average salary," for the
53.8 	purpose of determining the member's retirement annuity, means
53.9 	the average salary upon which contributions were made for the
53.10 	highest five successive years of formula service credit.
53.11 	(b) "Average salary" may not include any more than the
53.12 	equivalent of 60 monthly salary payments.
53.13 	(c) "Average salary" must be based upon all years of
53.14 	formula service credit if this service credit is less than five
53.15 	years.

53.16 	Sec. 17. Minnesota Statutes 2004, section 354.05,
53.17 	subdivision 35, is amended to read:
53.18 		Subd. 35.Salary.  (a) Subject to the limitations of
53.19 	section 356.611,"salary" means the periodic compensation, upon
53.20 	which member contributions are required before deductions for
53.21 	deferred compensation, supplemental retirement plans, or other
53.22 	voluntary salary reduction programs.
53.23 	(b) "Salary" does not mean:
53.24 	(1) lump sum annual leave payments;
53.25 	(2) lump sum wellness and sick leave payments;
53.26 	(3) employer-paid amounts used by an employee toward the
53.27 	cost of insurance coverage, employer-paid fringe benefits,
53.28 	flexible spending accounts, cafeteria plans, health care expense
53.29 	accounts, day care expenses, or any payments in lieu of any
53.30 	employer-paid group insurance coverage, including the difference
53.31 	between single and family rates that may be paid to a member
53.32 	with single coverage and certain amounts determined by the
53.33 	executive director to be ineligible;
53.34 	(4) any form of payment made in lieu of any other
53.35 	employer-paid fringe benefit or expense;
53.36 	(5) any form of severance payments;
54.1 	(6) workers' compensation payments;
54.2 	(7) disability insurance payments, including self-insured
54.3 	disability payments;
54.4 	(8) payments to school principals and all other
54.5 	administrators for services that are in addition to the normal
54.6 	work year contract if these additional services are performed on
54.7 	an extended duty day, Saturday, Sunday, holiday, annual leave
54.8 	day, sick leave day, or any other nonduty day;
54.9 	(9) payments under section 356.24, subdivision 1, clause
54.10 	(4); and
54.11 	(10) payments made under section 122A.40, subdivision 12,
54.12 	except for payments for sick leave that are accumulated under
54.13 	the provisions of a uniform school district policy that applies
54.14 	equally to all similarly situated persons in the district.
54.15 	(c) Amounts provided to an employee by the employer through
54.16 	a grievance proceeding or a legal settlement are salary only if
54.17 	the settlement is reviewed by the executive director and the
54.18 	amounts are determined by the executive director to be
54.19 	consistent with paragraph (a) and prior determinations.

54.20 	Sec. 18. Minnesota Statutes 2004, section 354.44,
54.21 	subdivision 6, is amended to read:
54.22 		Subd. 6.Computation of formula program retirement
54.23 	annuity.  (a) The formula retirement annuity must be computed in
54.24 	accordance with the applicable provisions of the formulas stated
54.25 	in paragraph (b) or (d) on the basis of each member's average
54.26 	salary under section 354.05, subdivision 13a,for the period of
54.27 	the member's formula service credit.
54.28 	For all years of formula service credit, "average salary,"
54.29 	for the purpose of determining the member's retirement annuity,
54.30 	means the average salary upon which contributions were made and
54.31 	upon which payments were made to increase the salary limitation
54.32 	provided in Minnesota Statutes 1971, section 354.511, for the
54.33 	highest five successive years of formula service credit
54.34 	provided, however, that such "average salary" shall not include
54.35 	any more than the equivalent of 60 monthly salary payments.
54.36 	Average salary must be based upon all years of formula service
55.1 	credit if this service credit is less than five years.
55.2 	(b) This paragraph, in conjunction with paragraph (c),
55.3 	applies to a person who first became a member of the association
55.4 	or a member of a pension fund listed in section 356.30,
55.5 	subdivision 3, before July 1, 1989, unless paragraph (d), in
55.6 	conjunction with paragraph (e), produces a higher annuity
55.7 	amount, in which case paragraph (d) applies.  The average salary
55.8 	as defined in paragraph (a) section 354.05, subdivision 13a,
55.9 	multiplied by the following percentages per year of formula
55.10 	service credit shall determine the amount of the annuity to
55.11 	which the member qualifying therefor is entitled:
55.12 	Coordinated Member   Basic Member
55.13 	Each year of service     the percent        the percent
55.14 	during first ten         specified in       specified in
55.15 	section 356.315,   section 356.315,
55.16 	subdivision 1,     subdivision 3,
55.17 	per year           per year
55.18 	Each year of service     the percent        the percent
55.19 	thereafter               specified in       specified in
55.20 	section 356.315,   section 356.315,
55.21 	subdivision 2,     subdivision 4,
55.22 	per year           per year
55.23 	(c)(i) This paragraph applies only to a person who first
55.24 	became a member of the association or a member of a pension fund
55.25 	listed in section 356.30, subdivision 3, before July 1, 1989,
55.26 	and whose annuity is higher when calculated under paragraph (b),
55.27 	in conjunction with this paragraph than when calculated under
55.28 	paragraph (d), in conjunction with paragraph (e).
55.29 	(ii) Where any member retires prior to normal retirement
55.30 	age under a formula annuity, the member shall be paid a
55.31 	retirement annuity in an amount equal to the normal annuity
55.32 	provided in paragraph (b) reduced by one-quarter of one percent
55.33 	for each month that the member is under normal retirement age at
55.34 	the time of retirement except that for any member who has 30 or
55.35 	more years of allowable service credit, the reduction shall be
55.36 	applied only for each month that the member is under age 62.
56.1 	(iii) Any member whose attained age plus credited allowable
56.2 	service totals 90 years is entitled, upon application, to a
56.3 	retirement annuity in an amount equal to the normal annuity
56.4 	provided in paragraph (b), without any reduction by reason of
56.5 	early retirement.
56.6 	(d) This paragraph applies to a member who has become at
56.7 	least 55 years old and first became a member of the association
56.8 	after June 30, 1989, and to any other member who has become at
56.9 	least 55 years old and whose annuity amount when calculated
56.10 	under this paragraph and in conjunction with paragraph (e), is
56.11 	higher than it is when calculated under paragraph (b), in
56.12 	conjunction with paragraph (c).  The average salary, as defined
56.13 	in paragraph (a) section 354.05, subdivision 13a,multiplied by
56.14 	the percent specified by section 356.315, subdivision 4, for
56.15 	each year of service for a basic member and by the percent
56.16 	specified in section 356.315, subdivision 2, for each year of
56.17 	service for a coordinated member shall determine the amount of
56.18 	the retirement annuity to which the member is entitled.
56.19 	(e) This paragraph applies to a person who has become at
56.20 	least 55 years old and first becomes a member of the association
56.21 	after June 30, 1989, and to any other member who has become at
56.22 	least 55 years old and whose annuity is higher when calculated
56.23 	under paragraph (d) in conjunction with this paragraph than when
56.24 	calculated under paragraph (b), in conjunction with paragraph
56.25 	(c).  An employee who retires under the formula annuity before
56.26 	the normal retirement age shall be paid the normal annuity
56.27 	provided in paragraph (d) reduced so that the reduced annuity is
56.28 	the actuarial equivalent of the annuity that would be payable to
56.29 	the employee if the employee deferred receipt of the annuity and
56.30 	the annuity amount were augmented at an annual rate of three
56.31 	percent compounded annually from the day the annuity begins to
56.32 	accrue until the normal retirement age.
56.33 	(f) No retirement annuity is payable to a former employee
56.34 	with a salary that exceeds 95 percent of the governor's salary
56.35 	unless and until the salary figures used in computing the
56.36 	highest five successive years average salary under paragraph (a)
57.1 	have been audited by the Teachers Retirement Association and
57.2 	determined by the executive director to comply with the
57.3 	requirements and limitations of section 354.05, subdivisions 35
57.4 	and 35a.

57.5 	Sec. 19. Minnesota Statutes 2004, section 354A.011, is
57.6 	amended by adding a subdivision to read:
57.7 		Subd. 7a.Average salary. "Average salary," for purposes
57.8 	of computing a normal coordinated program retirement annuity
57.9 	under section 354A.31, subdivision 4 or 4a, means an amount
57.10 	equal to the average salary upon which contributions were made
57.11 	for the highest five successive years of service credit but may
57.12 	not, in any event, include any more than the equivalent of 60
57.13 	monthly salary payments.  Average salary must be based upon all
57.14 	years of service credit if this service credit is less than five
57.15 	years.

57.16 	Sec. 20. Minnesota Statutes 2004, section 354A.011,
57.17 	subdivision 24, is amended to read:
57.18 		Subd. 24.Salary; covered salary.  (a) Subject to the
57.19 	limitations of section 356.611,"salary" or "covered salary"
57.20 	means the entire compensation, upon which member contributions
57.21 	are required and made, that is paid to a teacher before
57.22 	deductions for deferred compensation, supplemental retirement
57.23 	plans, or other voluntary salary reduction programs.
57.24 	(b) "Salary" does not mean:
57.25 	(1) lump sum annual leave payments;
57.26 	(2) lump sum wellness and sick leave payments;
57.27 	(3) employer-paid amounts used by an employee toward the
57.28 	cost of insurance coverage, employer-paid fringe benefits,
57.29 	flexible spending accounts, cafeteria plans, health care expense
57.30 	accounts, day care expenses, or any payments in lieu of any
57.31 	employer-paid group insurance coverage, including the difference
57.32 	between single and family rates that may be paid to a member
57.33 	with single coverage, and certain amounts determined by the
57.34 	executive secretary or director to be ineligible;
57.35 	(4) any form of payment that is made in lieu of any other
57.36 	employer-paid fringe benefit or expense;
58.1 	(5) any form of severance payments;
58.2 	(6) workers' compensation payments;
58.3 	(7) disability insurance payments, including self-insured
58.4 	disability payments;
58.5 	(8) payments to school principals and all other
58.6 	administrators for services that are in addition to the normal
58.7 	work year contract if these additional services are performed on
58.8 	an extended duty day, Saturday, Sunday, holiday, annual leave
58.9 	day, sick leave day, or any other nonduty day;
58.10 	(9) payments under section 356.24, subdivision 1, clause
58.11 	(4)(ii); and
58.12 	(10) payments made under section 122A.40, subdivision 12,
58.13 	except for payments for sick leave that are accumulated under
58.14 	the provisions of a uniform school district policy that applies
58.15 	equally to all similarly situated persons in the district.
58.16 	(c) Amounts provided to an employee by the employer through
58.17 	a grievance proceeding or a legal settlement are salary only if
58.18 	the settlement is reviewed by the executive director and the
58.19 	amounts are determined by the executive director to be
58.20 	consistent with paragraph (a) and prior determinations.

58.21 	Sec. 21. Minnesota Statutes 2004, section 354A.31,
58.22 	subdivision 4, is amended to read:
58.23 		Subd. 4.Computation of the normal coordinated retirement
58.24 	annuity; minneapolis and st. paul funds.  (a) This subdivision
58.25 	applies to the coordinated programs of the Minneapolis Teachers
58.26 	Retirement Fund Association and the St. Paul Teachers Retirement
58.27 	Fund Association.
58.28 	(b) The normal coordinated retirement annuity shall be is 
58.29 	an amount equal to a retiring coordinated member's average
58.30 	salary under section 354A.011, subdivision 7a,multiplied by the
58.31 	retirement annuity formula percentage. Average salary for
58.32 	purposes of this section shall mean an amount equal to the
58.33 	average salary upon which contributions were made for the
58.34 	highest five successive years of service credit, but which shall
58.35 	not in any event include any more than the equivalent of 60
58.36 	monthly salary payments.  Average salary must be based upon all
59.1 	years of service credit if this service credit is less than five
59.2 	years.
59.3 	(c) This paragraph, in conjunction with subdivision 6,
59.4 	applies to a person who first became a member or a member in a
59.5 	pension fund listed in section 356.30, subdivision 3, before
59.6 	July 1, 1989, unless paragraph (d), in conjunction with
59.7 	subdivision 7, produces a higher annuity amount, in which case
59.8 	paragraph (d) will apply.  The retirement annuity formula
59.9 	percentage for purposes of this paragraph is the percent
59.10 	specified in section 356.315, subdivision 1, per year for each
59.11 	year of coordinated service for the first ten years and the
59.12 	percent specified in section 356.315, subdivision 2, for each
59.13 	year of coordinated service thereafter.
59.14 	(d) This paragraph applies to a person who has become at
59.15 	least 55 years old and who first becomes a member after June 30,
59.16 	1989, and to any other member who has become at least 55 years
59.17 	old and whose annuity amount, when calculated under this
59.18 	paragraph and in conjunction with subdivision 7 is higher than
59.19 	it is when calculated under paragraph (c), in conjunction with
59.20 	the provisions of subdivision 6.  The retirement annuity formula
59.21 	percentage for purposes of this paragraph is the percent
59.22 	specified in section 356.315, subdivision 2, for each year of
59.23 	coordinated service.

59.24 	Sec. 22. Minnesota Statutes 2004, section 354A.31,
59.25 	subdivision 4a, is amended to read:
59.26 		Subd. 4a.Computation of the normal coordinated
59.27 	retirement annuity; duluth fund.  (a) This subdivision applies
59.28 	to the new law coordinated program of the Duluth Teachers
59.29 	Retirement Fund Association.
59.30 	(b) The normal coordinated retirement annuity is an amount
59.31 	equal to a retiring coordinated member's average salary under
59.32 	section 354A.011, subdivision 7a,multiplied by the retirement
59.33 	annuity formula percentage. Average salary for purposes of this
59.34 	section means an amount equal to the average salary upon which
59.35 	contributions were made for the highest five successive years of
59.36 	service credit, but may not in any event include any more than
60.1 	the equivalent of 60 monthly salary payments.  Average salary
60.2 	must be based upon all years of service credit if this service
60.3 	credit is less than five years.
60.4 	(c) This paragraph, in conjunction with subdivision 6,
60.5 	applies to a person who first became a member or a member in a
60.6 	pension fund listed in section 356.30, subdivision 3, before
60.7 	July 1, 1989, unless paragraph (d), in conjunction with
60.8 	subdivision 7, produces a higher annuity amount, in which case
60.9 	paragraph (d) applies.  The retirement annuity formula
60.10 	percentage for purposes of this paragraph is the percent
60.11 	specified in section 356.315, subdivision 1, per year for each
60.12 	year of coordinated service for the first ten years and the
60.13 	percent specified in section 356.315, subdivision 2, for each
60.14 	subsequent year of coordinated service.
60.15 	(d) This paragraph applies to a person who is at least 55
60.16 	years old and who first becomes a member after June 30, 1989,
60.17 	and to any other member who is at least 55 years old and whose
60.18 	annuity amount, when calculated under this paragraph and in
60.19 	conjunction with subdivision 7, is higher than it is when
60.20 	calculated under paragraph (c) in conjunction with subdivision
60.21 	6.  The retirement annuity formula percentage for purposes of
60.22 	this paragraph is the percent specified in section 356.315,
60.23 	subdivision 2, for each year of coordinated service.

60.24 	Sec. 23. Minnesota Statutes 2004, section 356.611,
60.25 	subdivision 1, is amended to read:
60.26 		Subdivision 1.State salary limitations.  (a)
60.27 	Notwithstanding any provision of law, bylaws, articles of
60.28 	incorporation, retirement and disability allowance plan
60.29 	agreements, or retirement plan contracts to the contrary, the
60.30 	covered salary for pension purposes for a plan participant of a
60.31 	covered retirement fund enumerated in section 356.30,
60.32 	subdivision 3, may not exceed 95 110 percent of the salary
60.33 	established for the governor under section 15A.082 at the time
60.34 	the person received the salary.
60.35 	(b) This section does not apply to a salary paid:
60.36 	(1) to the governor or to a judge;
61.1 	(2) to an employee or an elected official who is not
61.2 	subject to the limit as specified under section 43A.17,
61.3 	subdivision 9;
61.4 	(3) to an employee of a political subdivision in a position
61.5 	that is excluded from the limit as specified under section
61.6 	43A.17, subdivision 9;
61.7 	(3) (4) to a state employee as defined under section
61.8 	43A.02, subdivision 21;
61.9 	(4) (5) to an employee of Gillette Hospital who is covered
61.10 	by the general state employees retirement plan of the Minnesota
61.11 	State Retirement System;
61.12 	(5) (6) to an employee of the Minnesota Crop Improvement
61.13 	Council; or 
61.14 	(6) (7) to an employee of the Minnesota Historical Society;
61.15 	(8) to an employee of the Southern Minnesota Municipal
61.16 	Power Association; or 
61.17 	(9) to the director of the Duluth Port Authority.
61.18 	(c) The limited covered salary determined under this
61.19 	section must be used in determining employee and employer
61.20 	contributions and in determining retirement annuities and other
61.21 	benefits under the respective covered retirement fund and under
61.22 	this chapter.

61.23 	Sec. 24. Minnesota Statutes 2004, section 422A.01, is
61.24 	amended by adding a subdivision to read:
61.25 		Subd. 4a.Average salary. (a) "Average salary" means the
61.26 	arithmetic average annual salary, wages, or compensation of the
61.27 	member from the city for any five calendar years out of the last
61.28 	ten calendar years of service, except as provided for in section
61.29 	422A.16, which may include the year in which the employee
61.30 	retires, as selected by the employee.
61.31 	(b) A member with more than five calendar years of service,
61.32 	but less than ten calendar years, may select any five calendar
61.33 	years of service to determine the average salary.  A member with
61.34 	less than five years of service with the city shall use all
61.35 	earnings to determine the average salary.

61.36 	Sec. 25. Minnesota Statutes 2004, section 422A.01, is
62.1 	amended by adding a subdivision to read:
62.2 		Subd. 13a.Covered salary. "Salary" is subject to the
62.3 	limitations of section 356.611.

62.4 	Sec. 26. Minnesota Statutes 2004, section 422A.15,
62.5 	subdivision 1, is amended to read:
62.6 		Subdivision 1.Formula pension and annuity.  Except as
62.7 	otherwise provided in subdivision 3, each contributing member
62.8 	who, at the time of retirement, fulfills the conditions
62.9 	necessary to enable the member to retire, shall is entitled to 
62.10 	receive what shall be known as a "formula pension and annuity"
62.11 	equal to two percent for each year of allowable service for the
62.12 	first ten years and thereafter 2.5 percent per year of allowable
62.13 	service of the arithmetic average annual salary, wages or
62.14 	compensation of the member from the city for any five calendar
62.15 	years out of the last ten calendar years of service except as
62.16 	provided for in section 422A.16, which may include the year in
62.17 	which the employee retires, as selected by the employee,
62.18 	multiplied by the years of service credited by the retirement
62.19 	fund.  The formula pension and annuity shall must be computed on
62.20 	the single life plan but subject to the option selections
62.21 	provided for in section 422A.17.
62.22 	In order to be entitled to the formula pension and annuity
62.23 	herein provided for, the retiring employee at the time of
62.24 	cessation of employment and of actual retirement shall must have
62.25 	attained the age of 60 years or have been employed by the city
62.26 	not less than 30 years, or meet the qualifications provided for
62.27 	in section 422A.16, and in addition thereto have contributed to
62.28 	the retirement fund at the percentage rate prescribed by the
62.29 	retirement law applicable when the salary, wages or compensation
62.30 	was paid on all salaries, wages, or compensation received from
62.31 	the city or from an applicable employing unit.  The years of
62.32 	service to be applied in the formula pension and annuity shall 
62.33 	must be found and determined by the retirement board, except
62.34 	that no credit shall may be allowed for any year in which a back
62.35 	charge is owing at time of retirement and the earnings from any
62.36 	year in which a back charge is owing shall may not be used in
63.1 	determining the average annual salary.

63.2 	Sec. 27. Minnesota Statutes 2004, section 422A.16,
63.3 	subdivision 9, is amended to read:
63.4 		Subd. 9.Incompetency or death of member.  Any member of
63.5 	the contributing class who becomes permanently separated from
63.6 	the service of the city under subdivision 8, may, by an
63.7 	instrument in writing, filed with the municipal employees
63.8 	retirement board within 30 days after such the separation
63.9 	becomes permanent, elect to allow the member contributions
63.10 	to such the fund to the date of separation to remain on deposit
63.11 	in such the fund, and in such the event the member shall be 
63.12 	is entitled to receive a retirement allowance at age 65,
63.13 	provided the member, or someone acting in the member's behalf if
63.14 	the member be incompetent, shall must make a written application
63.15 	for such the retirement allowance in the same manner provided
63.16 	for in section 422A.17 and in accordance with the provisions of
63.17 	section 422A.15, subdivision 1,except for determining
63.18 	average annual salary. A member with more than five calendar
63.19 	years of service but less than ten calendar years may select any
63.20 	five calendar years of service to determine the average annual
63.21 	salary.  A member with less than five years of service with the
63.22 	city shall use all earnings to determine the average annual
63.23 	salary.
63.24 	If the contributing member dies before reaching the age of
63.25 	65 years, or having attained the age of 65 years without having
63.26 	made the election provided for herein, the net accumulated
63.27 	amount of deductions from the member's salary, pay or
63.28 	compensation, plus interest, to the member's credit on date of
63.29 	death shall be paid is payable to such the person or persons as
63.30 	have been nominated by written designation filed with the
63.31 	retirement board, in such the form as that the retirement board
63.32 	shall require requires.
63.33 	If the employee fails to make a designation, or if the
63.34 	person or persons designated by such the employee predeceases
63.35 	such the employee, the net accumulated credit to such the 
63.36 	employee's account on date of death shall be paid is payable to
64.1 	such the employee's estate.
64.2 	The provisions of subdivisions 4, 5,and 6 shall also apply
64.3 	to any member qualifying for benefits under this subdivision,
64.4 	except for purposes of this subdivision the age referred to in
64.5 	subdivision 4 shall be is 65 years.

64.6 	Sec. 28. Minnesota Statutes 2004, section 423B.01, is
64.7 	amended by adding a subdivision to read:
64.8 		Subd. 22.Covered salary. "Salary" is subject to the
64.9 	limitations of section 356.611.

64.10 	Sec. 29. Minnesota Statutes 2004, section 423C.01, is
64.11 	amended by adding a subdivision to read:
64.12 		Subd. 29.Covered salary. "Salary" is subject to the
64.13 	limitations of section 356.611.

64.14 	Sec. 30. Minnesota Statutes 2004, section 490.121,
64.15 	subdivision 21, is amended to read:
64.16 		Subd. 21.Final average compensation.  "Final average
64.17 	compensation" means the total amount of salary payable to a
64.18 	judge in the highest five years out of the last ten years prior
64.19 	to before the event of maturity of benefits termination of
64.20 	judicial service, divided by five; provided, however, that if
64.21 	the number of years of service by the judge equals or exceeds
64.22 	ten.  If the number of years of service by the judge is less
64.23 	than ten, but more than five,the highest five shall years of
64.24 	salary must be counted, and .If the number of years of service
64.25 	by the judge is less than five, the aggregate salary in such for
64.26 	the period shall of service must be divided by the number of
64.27 	months in such the period and multiplied by 12.

64.28 	Sec. 31. Minnesota Statutes 2004, section 490.121, is
64.29 	amended by adding a subdivision to read:
64.30 		Subd. 21a.Covered salary limitation. "Final average
64.31 	compensation" is subject to the limitations of section 356.611.

64.32 	Sec. 32. REPEALER.
 64.33 	Minnesota Statutes 2004, sections 352C.031, subdivision 3;
64.34 	353.29, subdivision 2; and 353.651, subdivision 2, are repealed.

64.35 	Sec. 33. EFFECTIVE DATE.
 64.36 	This article is effective on the day following final
65.1 	enactment except that section 23 applies retroactively from
65.2 	April 28, 1994.

65.3 	ARTICLE 3
65.4 	ALLOWABLE SERVICE CREDIT

65.5 	Section 1. [356.195] SERVICE CREDIT PURCHASE PROCEDURES
65.6 	FOR STRIKE PERIODS.
65.7 		Subdivision 1.Covered plans. This section applies to
65.8 	all defined benefit plans specified in section 356.30,
65.9 	subdivision 3.
65.10 		Subd. 2.Purchase procedure for strike periods. (a) An
65.11 	employee covered by a plan specified in subdivision 1 may
65.12 	purchase allowable service credit in the applicable plan for any
65.13 	period of time during which the employee was on a public
65.14 	employee strike without pay, not to exceed a period of one year,
65.15 	if the employee makes a payment in lieu of salary deductions as
65.16 	specified in paragraph (b) or (c), whichever applies.  The
65.17 	employing unit, at its option, may pay the employer portion of
65.18 	the amount specified in paragraph (b) on behalf of its employees.
65.19 	(b) If payment is received by the applicable pension plan
65.20 	executive director within one year from the end of the strike,
65.21 	the payment amount is equal to the applicable employee and
65.22 	employer contribution rates specified in law for the applicable
65.23 	plan during the strike period, applied to the employee's rate of
65.24 	salary in effect at the conclusion of the strike for the period
65.25 	of the strike without pay, plus compound interest at a monthly
65.26 	rate of 0.71 percent from the last day of the strike period
65.27 	until the date payment is received.
65.28 	(c) If payment is received by the applicable pension fund
65.29 	director after one year and before five years from the end of
65.30 	the strike, the payment amount is the amount determined under
65.31 	section 356.551.
65.32 	(d) Payments may not be made more than five years after the
65.33 	end of the strike.

65.34 	Sec. 2. Minnesota Statutes 2004, section 490.121,
65.35 	subdivision 4, is amended to read:
65.36 		Subd. 4.Allowable service. (a) "Allowable service"
66.1 	means any calendar month, subject to the service credit limit in
66.2 	subdivision 22, served as a judge at any time, or served as a
66.3 	referee in probate for all referees in probate who were in
66.4 	office prior to January 1, 1974.
66.5 	(b) "Allowable service" also means a period of authorized
66.6 	leave of absence for which the judge has made a payment in lieu
66.7 	of contributions, not in an amount in excess of the service
66.8 	credit limit under subdivision 22.  To obtain the service
66.9 	credit, the judge shall pay an amount equal to the normal cost
66.10 	of the judges retirement plan on the date of return from the
66.11 	leave of absence, as determined in the most recent actuarial
66.12 	report for the plan filed with the Legislative Commission on
66.13 	Pensions and Retirement, multiplied by the judge's average
66.14 	monthly salary rate during the authorized leave of absence and
66.15 	multiplied by the number of months of the authorized leave of
66.16 	absence, plus annual compound interest at the rate of 8.5
66.17 	percent from the date of the termination of the leave to the
66.18 	date on which payment is made.  The payment must be made within
66.19 	one year of the date on which the authorized leave of absence
66.20 	terminated.  Service credit for an authorized leave of absence
66.21 	is in addition to a uniformed service leave under section
66.22 	490.1211.

66.23 	Sec. 3. Laws 1999, chapter 222, article 16, section 16, as
66.24 	amended by Laws 2002, chapter 392, article 7, section 1, and
66.25 	Laws 2003, First Special Session chapter 12, article 6, section
66.26 	2, and Laws 2004, chapter 267, article 17, section 6, is amended
66.27 	to read:
66.28 	Sec. 16REPEALER.
 66.29 	(a) Sections 2 to 6 and 8 to 13 are repealed on May 16,
66.30 	2004.
66.31 	(b) Sections 1 and 7 are repealed on May 16, 2006 2007.

66.32 	Sec. 4. Laws 2000, chapter 461, article 4, section 4, as
66.33 	amended by Laws 2003, First Special Session chapter 12, article
66.34 	6, section 3, and Laws 2004, chapter 267, article 17, section 7,
66.35 	is amended to read:
66.36 	Sec. 4EFFECTIVE DATE; SUNSET REPEALER.
 67.1 	(a) Sections 1, 2, and 3 are effective on the day following
67.2 	final enactment.
67.3 	(b) Sections 1, 2, and 3, are repealed on May 16, 2006 2007.

67.4 	Sec. 5. METRO TRANSIT STRIKE PROVISION.
 67.5 	Notwithstanding the payment deadline specified in Minnesota
67.6 	Statutes, section 356.195, subdivision 2, paragraph (b), a Metro
67.7 	Transit employee covered by the general state employees
67.8 	retirement plan of the Minnesota State Retirement System who was
67.9 	on strike on or after January 1, 2004, and before the effective
67.10 	date of this section, is authorized to make a payment under that
67.11 	paragraph on or before one year after the effective date of this
67.12 	section.

67.13 	Sec. 6. CROSBY-IRONTON PUBLIC SCHOOL STRIKE PROVISION.
 67.14 	Notwithstanding the payment deadline specified in Minnesota
67.15 	Statutes, section 356.195, subdivision 2, paragraph (b), a
67.16 	Crosby-Ironton public school teacher covered by the Teachers
67.17 	Retirement Association who was on strike during a period that
67.18 	included April 1, 2005, and before the effective date of this
67.19 	section, is authorized to make a payment under that paragraph on
67.20 	or before one year after the effective date of this section.

67.21 	Sec. 7. UNIVERSITY OF MINNESOTA STRIKE PROVISION.
 67.22 	Notwithstanding the payment deadline specified in Minnesota
67.23 	Statutes, section 356.195, subdivision 2, paragraph (b), a
67.24 	University of Minnesota employee covered by the Minnesota State
67.25 	Retirement System who was on strike on or after October 21, 2003
67.26 	and before the effective date of this section, is authorized to
67.27 	make a payment under that paragraph on or before one year after
67.28 	the effective date of this section.

67.29 	Sec. 8. EFFECTIVE DATE.
 67.30 	(a) Sections 1 and 3 to 7 are effective the day following
67.31 	final enactment.
67.32 	(b) Section 2 is effective retroactively from January 1,
67.33 	2005, and applies to any person who was in active service as a
67.34 	judge on or after that date and applies to an authorized leave
67.35 	of absence that occurred before or after that date.  For a
67.36 	person for whom section 2 is retroactive, the equivalent
68.1 	contribution payment must be made on or before July 1, 2006.

68.2 	ARTICLE 4
68.3 	ACTUARIAL FINANCIAL
68.4 	REPORTING AND OTHER GENERALLY
68.5 	APPLICABLE ADMINISTRATIVE CHANGES

68.6 	Section 1. Minnesota Statutes 2004, section 352.01,
68.7 	subdivision 12, is amended to read:
68.8 		Subd. 12.Actuarial equivalent.  "Actuarial equivalent"
68.9 	means the condition of one annuity or benefit having an equal
68.10 	actuarial present value as another annuity or benefit,
68.11 	determined as of a given date at a specified age with each
68.12 	actuarial present value based on the appropriate mortality table
68.13 	adopted by the board of directors based on the experience of the
68.14 	fund as recommended by the actuary retained by the Legislative
68.15 	Commission on Pensions and Retirement under section 356.214, and
68.16 	approved under section 356.215, subdivision 18,and using the
68.17 	applicable preretirement or postretirement interest rate
68.18 	assumption specified in section 356.215, subdivision 8.

68.19 	Sec. 2. Minnesota Statutes 2004, section 353.01,
68.20 	subdivision 14, is amended to read:
68.21 		Subd. 14.Actuarial equivalent.  "Actuarial equivalent"
68.22 	means the condition of one annuity or benefit having an equal
68.23 	actuarial present value as another annuity or benefit,
68.24 	determined as of a given date with each actuarial present value
68.25 	based on the appropriate mortality table adopted by the board of
68.26 	trustees based on the experience of the fund as recommended by
68.27 	the actuary retained by the Legislative Commission on Pensions
68.28 	and Retirement under section 356.214, and approved under section
68.29 	356.215, subdivision 18,and using the applicable preretirement
68.30 	or postretirement interest rate assumption specified in section
68.31 	356.215, subdivision 8.

68.32 	Sec. 3. Minnesota Statutes 2004, section 354.05,
68.33 	subdivision 7, is amended to read:
68.34 		Subd. 7.Actuarial equivalent.  "Actuarial equivalent"
68.35 	means the condition of one annuity or benefit having an equal
68.36 	actuarial present value as another annuity or benefit,
69.1 	determined as of a given date with each actuarial present value
69.2 	based on the appropriate mortality table adopted by the board of
69.3 	trustees based on the experience of the association as
69.4 	recommended by the actuary retained by the Legislative
69.5 	Commission on Pensions and Retirement under section 356.214, and
69.6 	approved under section 356.215, subdivision 18,and using the
69.7 	applicable preretirement or postretirement interest rate
69.8 	assumption specified in section 356.215, subdivision 8.

69.9 	Sec. 4. Minnesota Statutes 2004, section 354.094,
69.10 	subdivision 1, is amended to read:
69.11 		Subdivision 1.Service credit contributions. (a) Upon
69.12 	granting any extended leave of absence under section 122A.46 or
69.13 	136F.43, the employing unit granting the leave must certify the
69.14 	leave to the association on a form specified by the executive
69.15 	director.  A member granted an extended leave of absence under
69.16 	section 122A.46 or 136F.43 may pay employee contributions and
69.17 	receive allowable service credit toward annuities and other
69.18 	benefits under this chapter, for each year of the leave,
69.19 	provided that the member and the employing board make the
69.20 	required employer contribution in any proportion they may agree
69.21 	upon, during the period of the leave.  The employer may enter
69.22 	into an agreement with the exclusive bargaining representative
69.23 	of the teachers in the district under which, for an individual
69.24 	teacher, all or a portion of the employee's contribution is paid
69.25 	by the employer.  Any such agreement must include a sunset of
69.26 	eligibility to qualify for the payment and must not be a part of
69.27 	the collective bargaining agreement.  The leave period must not
69.28 	exceed five years.  A member may not receive more than five
69.29 	years of allowable service credit under this section.  The
69.30 	employee and employer contributions must be based upon the rates
69.31 	of contribution prescribed by section 354.42 for the salary
69.32 	received during the year immediately preceding the extended
69.33 	leave.
69.34 	(b) Employee contribution payments for the years for which
69.35 	a member is receiving service credit while on extended leave
69.36 	must be made on or before the later of June 30 of each fiscal
70.1 	year for which service credit is to be received or within 30
70.2 	days after first notification of the amount due, if requested by
70.3 	the member, is given by the association. If payment is to be
70.4 	made by a transfer of pretax assets authorized under section
70.5 	356.441, payment is authorized after June 30 of the fiscal year
70.6 	providing that authorization for the asset transfer has been
70.7 	received by the applicable third party administrator by June 30,
70.8 	and the payment must include interest at a rate of .708 percent
70.9 	per month from June 30 through the end of the month in which
70.10 	payment is received.No payment is permitted after the
70.11 	following September 30. Payments received after June 30 must
70.12 	include interest at an annual rate of 8.5 percent from June 30
70.13 	through the end of the month in which payment is received.
70.14 	(c) Notwithstanding the provisions of any agreements to the
70.15 	contrary, employee and employer contributions may not be made to
70.16 	receive allowable service credit if the member does not have
70.17 	full reinstatement rights as provided in section 122A.46 or
70.18 	136F.43, both during and at the end of the extended leave.
70.19 	(d) Any school district paying the employee's retirement
70.20 	contributions under this section shall forward to the applicable
70.21 	retirement association or retirement fund a copy of the
70.22 	agreement executed by the school district and the employee.

70.23 	Sec. 5. Minnesota Statutes 2004, section 354A.011,
70.24 	subdivision 3a, is amended to read:
70.25 		Subd. 3a.Actuarial equivalent.  "Actuarial equivalent"
70.26 	means the condition of one annuity or benefit having an equal
70.27 	actuarial present value as another annuity or benefit,
70.28 	determined as of a given date with each actuarial present value
70.29 	based on the appropriate mortality table adopted by the
70.30 	appropriate board of trustees based on the experience of that
70.31 	retirement fund association as recommended by the actuary
70.32 	retained by the Legislative Commission on Pensions and
70.33 	Retirement under section 356.214, and approved under section
70.34 	356.215, subdivision 18,and using the applicable preretirement
70.35 	or postretirement interest rate assumption specified in section
70.36 	356.215, subdivision 8.

71.1 	Sec. 6. Minnesota Statutes 2004, section 356.20,
71.2 	subdivision 4, is amended to read:
71.3 		Subd. 4.Contents of financial report.  (a) The financial
71.4 	report required by this section must contain financial
71.5 	statements and disclosures that indicate the financial
71.6 	operations and position of the retirement plan and fund.  The
71.7 	report must conform with generally accepted governmental
71.8 	accounting principles, applied on a consistent basis.  The
71.9 	report must be audited.  The report must include, as part of its
71.10 	exhibits or its footnotes, an actuarial disclosure item based on
71.11 	the actuarial valuation calculations prepared by the
71.12 	commission-retained actuary retained under section 356.214or by
71.13 	the actuary retained by the retirement fund or plan, if
71.14 	applicable whichever applies, according to applicable actuarial
71.15 	requirements enumerated in section 356.215, and specified in the
71.16 	most recent standards for actuarial work adopted by the
71.17 	Legislative Commission on Pensions and Retirement.  The accrued
71.18 	assets, the accrued liabilities, including accrued reserves, and
71.19 	the unfunded actuarial accrued liability of the fund or plan
71.20 	must be disclosed.  The disclosure item must contain a
71.21 	declaration by the actuary retained by the Legislative
71.22 	Commission on Pensions and Retirement under section 356.214or
71.23 	the actuary retained by the fund or plan, whichever applies,
71.24 	specifying that the required reserves for any retirement,
71.25 	disability, or survivor benefits provided under a benefit
71.26 	formula are computed in accordance with the entry age actuarial
71.27 	cost method and in accordance with the most recent applicable
71.28 	standards for actuarial work adopted by the Legislative
71.29 	Commission on Pensions and Retirement.
71.30 	(b) Assets of the fund or plan contained in the disclosure
71.31 	item must include the following statement of the actuarial value
71.32 	of current assets as defined in section 356.215, subdivision 1:
71.33 	Value         Value
71.34 	at cost       at market
71.35 	Cash, cash equivalents, and
71.36 	short-term securities           .........     .........
72.1 	Accounts receivable               .........     .........
72.2 	Accrued investment income         .........     .........
72.3 	Fixed income investments          .........     .........
72.4 	Equity investments other
72.5 	than real estate                .........     .........
72.6 	Real estate investments           .........     .........
72.7 	Equipment                         .........     .........
72.8 	Equity Participation in the Minnesota
72.9 	postretirement investment
72.10 	fund or the retirement 
72.11 	benefit fund.........     .........
72.12 	Other                             .........     .........
72.13 	
72.14 	Total assets
72.15 	Value at cost                                 .........
72.16 	Value at market                               .........
72.17 	Actuarial value of current assets             .........
72.18 	(c) The unfunded actuarial accrued liability of the fund or
72.19 	plan contained in the disclosure item must include the following
72.20 	measures of unfunded actuarial accrued liability, using
72.21 	the actuarial value of current assets:
72.22 	(1) the unfunded actuarial accrued liability, determined by
72.23 	subtracting the current assets and the present value of future
72.24 	normal costs from the total current and expected future benefit
72.25 	obligations; and
72.26 	(2) the unfunded pension benefit obligation, determined by
72.27 	subtracting the current assets from the actuarial present value
72.28 	of credited projected benefits.
72.29 	If the current assets of the fund or plan exceed the
72.30 	actuarial accrued liabilities, the excess must be disclosed and
72.31 	indicated as a surplus.
72.32 	(d) The pension benefit obligations schedule included in
72.33 	the disclosure must contain the following information on the
72.34 	benefit obligations:
72.35 	(1) the pension benefit obligation, determined as the
72.36 	actuarial present value of credited projected benefits on
73.1 	account of service rendered to date, separately identified as
73.2 	follows:
73.3 	(i) for annuitants;
73.4 	               retirement annuities;
73.5 	               disability benefits;
73.6 	               surviving spouse and child benefits;
73.7 	         (ii)  for former members without vested rights;
73.8 	         (iii) for deferred annuitants' benefits, including
73.9 	               any augmentation;
73.10 	         (iv)  for active employees;
73.11 	               accumulated employee contributions,
73.12 	               including allocated investment income;
73.13 	               employer-financed benefits vested;
73.14 	               employer-financed benefits nonvested;
73.15 	               total pension benefit obligation; and
73.16 	(2) if there are additional benefits not appropriately
73.17 	covered by the foregoing items of benefit obligations, a
73.18 	separate identification of the obligation.
73.19 	(e) The report must contain an itemized exhibit describing
73.20 	the administrative expenses of the plan, including, but not
73.21 	limited to, the following items, classified on a consistent
73.22 	basis from year to year, and with any further meaningful detail:
73.23 	(1) personnel expenses;
73.24 	(2) communication-related expenses;
73.25 	(3) office building and maintenance expenses;
73.26 	(4) professional services fees; and 
73.27 	(5) other expenses.
73.28 	(f) The report must contain an itemized exhibit describing
73.29 	the investment expenses of the plan, including, but not limited
73.30 	to, the following items, classified on a consistent basis from
73.31 	year to year, and with any further meaningful detail:
73.32 	(1) internal investment-related expenses; and 
73.33 	(2) external investment-related expenses.
73.34 	(g) Any additional statements or exhibits or more detailed
73.35 	or subdivided itemization of a disclosure item that will enable
73.36 	the management of the fund to portray a true interpretation of
74.1 	the fund's financial condition must be included in the
74.2 	additional statements or exhibits.

74.3 	Sec. 7. Minnesota Statutes 2004, section 356.47,
74.4 	subdivision 3, is amended to read:
74.5 		Subd. 3.Payment.  (a) Upon the retired member attaining
74.6 	the age of 65 years or upon the first day of the month next
74.7 	following the month occurring one year after the termination of
74.8 	the reemployment that gave rise to the limitation, whichever is
74.9 	later, and the filing of a written application, the retired
74.10 	member is entitled to the payment, in a lump sum, of the value
74.11 	of the person's amount under subdivision 2, plus interest at the
74.12 	compound annual rate of six percent from the date that the
74.13 	amount was deducted from the retirement annuity to the date of
74.14 	payment.
74.15 	(b) The written application must be on a form prescribed by
74.16 	the chief administrative officer of the applicable retirement
74.17 	plan.
74.18 	(c) If the retired member dies before the payment provided
74.19 	for in paragraph (a) is made, the amount is payable, upon
74.20 	written application, to the deceased person's surviving spouse,
74.21 	or if none, to the deceased person's designated beneficiary, or
74.22 	if none, to the deceased person's estate.
74.23 	(d) In lieu of the direct payment of the person's amount
74.24 	under subdivision 2, on or after the payment date under
74.25 	paragraph (a), if the federal Internal Revenue Code so permits,
74.26 	the retired member may elect to have all or any portion of the
74.27 	payment amount under this section paid in the form of a direct
74.28 	rollover to an eligible retirement plan as defined in section
74.29 	402(c) of the federal Internal Revenue Code that is specified by
74.30 	the retired member.  If the retired member dies with a balance
74.31 	remaining payable under this section, the surviving spouse of
74.32 	the retired member, or if none, the deceased person's designated
74.33 	beneficiary, or if none, the administrator of the deceased
74.34 	person's estate may elect a direct rollover under this paragraph.

74.35 	Sec. 8. Minnesota Statutes 2004, section 422A.01,
74.36 	subdivision 6, is amended to read:
75.1 		Subd. 6.Present worth or present value.  "Present worth"
75.2 	or "present value" means that the present amount of money if
75.3 	increased at the applicable postretirement or preretirement
75.4 	interest rate assumption specified in section 356.215,
75.5 	subdivision 8, and based on the mortality table adopted by the
75.6 	board of trustees based on the experience of the fund as
75.7 	recommended by the actuary retained by the Legislative
75.8 	Commission on Pensions and Retirement under section 356.214, and
75.9 	approved under section 356.215, subdivision 18,will at
75.10 	retirement equal the actuarial accrued liability of the annuity
75.11 	already earned.

75.12 	Sec. 9. Minnesota Statutes 2004, section 490.121,
75.13 	subdivision 20, is amended to read:
75.14 		Subd. 20.Actuarial equivalent.  "Actuarial equivalent"
75.15 	means the condition of one annuity or benefit having an equal
75.16 	actuarial present value as another annuity or benefit,
75.17 	determined as of a given date with each actuarial present value
75.18 	based on the appropriate mortality table adopted by the board of
75.19 	trustees directors of the Minnesota State Retirement System 
75.20 	based on the experience of the fund as recommended by
75.21 	the commission-retained actuary retained under section 356.214,
75.22 	and approved under section 356.215, subdivision 18,and using
75.23 	the applicable preretirement or postretirement interest rate
75.24 	assumption specified in section 356.215, subdivision 8.

75.25 	Sec. 10. EFFECTIVE DATE.
 75.26 	(a) Sections 1 to 3, 5, 8, and 9 are effective on July 1,
75.27 	2005.
75.28 	(b) Section 4 is effective the day following final
75.29 	enactment.
75.30 	(c) Section 6 is effective the day following final
75.31 	enactment and applies to annual financial reporting occurring on
75.32 	or after June 30, 2005.
75.33 	(d) Section 7 is effective July 1, 2005, and applies to
75.34 	retired members with an amount in a reemployed annuitant's
75.35 	account on or after that date.

75.36 	ARTICLE 5
76.1 	MEMBERSHIP INCLUSIONS
76.2 	AND EXCLUSIONS

76.3 	Section 1. Minnesota Statutes 2004, section 69.011, is
76.4 	amended by adding a subdivision to read:
76.5 		Subd. 2c.Ineligibility of certain police officers. A
76.6 	police officer employed by the University of Minnesota who is
76.7 	required by the Board of Regents to be a member of the
76.8 	University of Minnesota faculty retirement plan is not eligible
76.9 	to be included in any police state aid certification under this
76.10 	section.

76.11 	Sec. 2. Minnesota Statutes 2004, section 352.01,
76.12 	subdivision 2a, is amended to read:
76.13 		Subd. 2a.Included employees.  (a) "State employee"
76.14 	includes:
76.15 	(1) employees of the Minnesota Historical Society;
76.16 	(2) employees of the State Horticultural Society;
76.17 	(3) employees of the Disabled American Veterans, Department
76.18 	of Minnesota, Veterans of Foreign Wars, Department of Minnesota,
76.19 	if employed before July 1, 1963;
76.20 	(4) employees of the Minnesota Crop Improvement
76.21 	Association;
76.22 	(5) employees of the adjutant general who are paid from
76.23 	federal funds and who are not covered by any federal civilian
76.24 	employees retirement system;
76.25 	(6) employees of the Minnesota State Colleges and
76.26 	Universities employed under the university or college activities
76.27 	program;
76.28 	(7) currently contributing employees covered by the system
76.29 	who are temporarily employed by the legislature during a
76.30 	legislative session or any currently contributing employee
76.31 	employed for any special service as defined in subdivision 2b,
76.32 	clause (8);
76.33 	(8) employees of the Armory Building Commission;
76.34 	(9) employees of the legislature appointed without a limit
76.35 	on the duration of their employment and persons employed or
76.36 	designated by the legislature or by a legislative committee or
77.1 	commission or other competent authority to conduct a special
77.2 	inquiry, investigation, examination, or installation;
77.3 	(10) trainees who are employed on a full-time established
77.4 	training program performing the duties of the classified
77.5 	position for which they will be eligible to receive immediate
77.6 	appointment at the completion of the training period;
77.7 	(11) employees of the Minnesota Safety Council;
77.8 	(12) any employees on authorized leave of absence from the
77.9 	Transit Operating Division of the former Metropolitan Transit
77.10 	Commission who are employed by the labor organization which is
77.11 	the exclusive bargaining agent representing employees of the
77.12 	Transit Operating Division;
77.13 	(13) employees of the Metropolitan Council, Metropolitan
77.14 	Parks and Open Space Commission, Metropolitan Sports Facilities
77.15 	Commission, Metropolitan Mosquito Control Commission, or
77.16 	Metropolitan Radio Board unless excluded or covered by another
77.17 	public pension fund or plan under section 473.415, subdivision
77.18 	3;
77.19 	(14) judges of the Tax Court;
77.20 	(15) personnel employed on June 30, 1992, by the University
77.21 	of Minnesota in the management, operation, or maintenance of its
77.22 	heating plant facilities, whose employment transfers to an
77.23 	employer assuming operation of the heating plant facilities, so
77.24 	long as the person is employed at the University of Minnesota
77.25 	heating plant by that employer or by its successor organization;
77.26 	and 
77.27 	(16) seasonal help in the classified service employed by
77.28 	the Department of Revenue; and 
77.29 	(17) persons employed by the Department of Commerce as a
77.30 	peace officer in the Insurance Fraud Prevention Division under
77.31 	section 45.0135 who have attained the mandatory retirement age
77.32 	specified in section 43A.34, subdivision 4.
77.33 	(b) Employees specified in paragraph (a), clause (15), are
77.34 	included employees under paragraph (a) if employer and employee
77.35 	contributions are made in a timely manner in the amounts
77.36 	required by section 352.04.  Employee contributions must be
78.1 	deducted from salary.  Employer contributions are the sole
78.2 	obligation of the employer assuming operation of the University
78.3 	of Minnesota heating plant facilities or any successor
78.4 	organizations to that employer.

78.5 	Sec. 3. Minnesota Statutes 2004, section 352.91, is
78.6 	amended by adding a subdivision to read:
78.7 		Subd. 4a.Process for evaluating and recommending
78.8 	potential employment positions for membership inclusion. (a)
78.9 	The Department of Corrections and the Department of Human
78.10 	Services must establish a procedure for evaluating periodic
78.11 	requests by department employees for qualification for
78.12 	recommendation by the commissioner for inclusion of the
78.13 	employment position in the correctional facility or human
78.14 	services facility in the correctional retirement plan and for
78.15 	periodically determining employment positions that no longer
78.16 	qualify for continued correctional retirement plan coverage.
78.17 	(b) The procedure must provide for an evaluation of the
78.18 	extent of the employee's working time spent in direct contact
78.19 	with patients or inmates, the extent of the physical hazard that
78.20 	the employee is routinely subjected to in the course of
78.21 	employment, and the extent of intervention routinely expected of
78.22 	the employee in the event of a facility incident.  The
78.23 	percentage of routine direct contact with inmates or patients
78.24 	may not be less than 75 percent.
78.25 	(c) The applicable commissioner shall notify the employee
78.26 	of the determination of the appropriateness of recommending the
78.27 	employment position for inclusion in the correctional retirement
78.28 	plan, if the evaluation procedure results in a finding that the
78.29 	employee:
78.30 	(1) routinely spends 75 percent of the employee's time in
78.31 	direct contact with inmates or patients; and 
78.32 	(2) is regularly engaged in the rehabilitation, treatment,
78.33 	custody, or supervision of inmates or patients.
78.34 	(d) After providing the affected employee an opportunity to
78.35 	dispute or clarify any evaluation determinations, if the
78.36 	commissioner determines that the employment position is
79.1 	appropriate for inclusion in the correctional retirement plan,
79.2 	the commissioner shall forward that recommendation and
79.3 	supporting documentation to the chair of the Legislative
79.4 	Commission on Pensions and Retirement, the chair of the State
79.5 	and Local Governmental Operations Committee of the senate, the
79.6 	chair of the Governmental Operations and Veterans Affairs Policy
79.7 	Committee of the house of representatives, and the executive
79.8 	director of the Legislative Commission on Pensions and
79.9 	Retirement in the form of the appropriate proposed legislation.
79.10 	The recommendation must be forwarded to the legislature before
79.11 	January 15 for the recommendation to be considered in that
79.12 	year's legislative session.

79.13 	Sec. 4. Minnesota Statutes 2004, section 352B.01,
79.14 	subdivision 2, is amended to read:
79.15 		Subd. 2.Member.  "Member" means:
79.16 	(1) a State Patrol member currently employed after June 30,
79.17 	1943, under section 299D.03 by the state, who is a peace officer
79.18 	under section 626.84, and whose salary or compensation is paid
79.19 	out of state funds;
79.20 	(2) a conservation officer employed under section 97A.201,
79.21 	currently employed by the state, whose salary or compensation is
79.22 	paid out of state funds;
79.23 	(3) a crime bureau officer who was employed by the crime
79.24 	bureau and was a member of the Highway Patrolmen's retirement
79.25 	fund on July 1, 1978, whether or not that person has the power
79.26 	of arrest by warrant after that date, or who is employed as
79.27 	police personnel, with powers of arrest by warrant under section
79.28 	299C.04, and who is currently employed by the state, and whose
79.29 	salary or compensation is paid out of state funds;
79.30 	(4) a person who is employed by the state in the Department
79.31 	of Public Safety in a data processing management position with
79.32 	salary or compensation paid from state funds, who was a crime
79.33 	bureau officer covered by the State Patrol retirement plan on
79.34 	August 15, 1987, and who was initially hired in the data
79.35 	processing management position within the department during
79.36 	September 1987, or January 1988, with membership continuing for
80.1 	the duration of the person's employment in that position,
80.2 	whether or not the person has the power of arrest by warrant
80.3 	after August 15, 1987;
80.4 	(5) a public safety employee defined as a peace officer in
80.5 	section 626.84, subdivision 1, paragraph (c), and employed with
80.6 	the Division of Alcohol and Gambling Enforcement under section
80.7 	299L.01; and 
80.8 	(6) a Fugitive Apprehension Unit officer after October 31,
80.9 	2000, employed by the Office of Special Investigations of the
80.10 	Department of Corrections who is a peace officer under section
80.11 	626.84; and 
80.12 	(7) an employee of the Department of Commerce defined as a
80.13 	peace officer in section 626.84, subdivision 1, paragraph (c),
80.14 	who is employed by the Division of Insurance Fraud Prevention
80.15 	under section 45.0135 after January 1, 2005, and who has not
80.16 	attained the mandatory retirement age specified in section
80.17 	43A.34, subdivision 4.

80.18 	Sec. 5. Minnesota Statutes 2004, section 353.01,
80.19 	subdivision 6, is amended to read:
80.20 		Subd. 6.Governmental subdivision.  (a) "Governmental
80.21 	subdivision" means a county, city, town, school district within
80.22 	this state, or a department or unit of state government, or any
80.23 	public body whose revenues are derived from taxation, fees,
80.24 	assessments or from other sources.
80.25 	(b) Governmental subdivision also means the Public
80.26 	Employees Retirement Association, the League of Minnesota
80.27 	Cities, the Association of Metropolitan Municipalities, public
80.28 	hospitals owned or operated by, or an integral part of, a
80.29 	governmental subdivision or governmental subdivisions, the
80.30 	Association of Minnesota Counties, the Metropolitan Intercounty
80.31 	Association, the Minnesota Municipal Utilities Association, the
80.32 	Metropolitan Airports Commission, the University of Minnesota
80.33 	with respect to police officers covered by the public employees
80.34 	police and fire retirement plan,the Minneapolis Employees
80.35 	Retirement Fund for employment initially commenced after June
80.36 	30, 1979, the Range Association of Municipalities and Schools,
81.1 	soil and water conservation districts, economic development
81.2 	authorities created or operating under sections 469.090 to
81.3 	469.108, the Port Authority of the city of St. Paul, the Spring
81.4 	Lake Park Fire Department, incorporated, the Lake Johanna
81.5 	Volunteer Fire Department, incorporated, the Red Wing
81.6 	Environmental Learning Center, and the Dakota County
81.7 	Agricultural Society.
81.8 	(c) Governmental subdivision does not mean any municipal
81.9 	housing and redevelopment authority organized under the
81.10 	provisions of sections 469.001 to 469.047; or any port authority
81.11 	organized under sections 469.048 to 469.089 other than the Port
81.12 	Authority of the city of St. Paul; or any hospital district
81.13 	organized or reorganized prior to July 1, 1975, under sections
81.14 	447.31 to 447.37 or the successor of the district, nor the
81.15 	Minneapolis Community Development Agency.

81.16 	Sec. 6. Minnesota Statutes 2004, section 353.64, is
81.17 	amended by adding a subdivision to read:
81.18 		Subd. 6a.University of minnesota police officers;
81.19 	inclusions and exclusions. (a) Unless paragraph (b) applies, a
81.20 	person who is employed as a peace officer by the University of
81.21 	Minnesota at any campus or facility of the university, who is
81.22 	required by the university to be and is licensed as a peace
81.23 	officer by the Minnesota Peace Officer Standards and Training
81.24 	Board under sections 626.84 to 626.863, and who has the full
81.25 	power of arrest is a member of the public employees police and
81.26 	fire retirement plan.
81.27 	(b) A police officer employed by the University of
81.28 	Minnesota who is required by the Board of Regents to contribute
81.29 	to the University of Minnesota faculty retirement plan is not
81.30 	eligible to be a member of the public employees police and fire
81.31 	retirement plan.

81.32 	Sec. 7. Minnesota Statutes 2004, section 354B.21,
81.33 	subdivision 2, is amended to read:
81.34 		Subd. 2.Coverage; election.  (a) An eligible person is
81.35 	entitled to elect coverage by the plan.  If the eligible person
81.36 	does not make a timely election of coverage by the plan, the
82.1 	person has the coverage specified in subdivision 3.
82.2 	(b) For eligible persons who were employed by the former
82.3 	state university system or the former community college system
82.4 	before May 1, 1995, the person has the retirement coverage that
82.5 	the person had for employment immediately before May 1, 1995.
82.6 	(c) (b) For all other eligible persons, the election of
82.7 	coverage must be made within 90 days of May 10, 1995, or 90 days
82.8 	of receiving notice from the employer of the options available
82.9 	under this section, whichever occurs later unless otherwise
82.10 	specified in this section, the eligible person is authorized to
82.11 	elect prospective Teachers Retirement Association plan coverage
82.12 	rather than coverage by the plan established by this chapter.
82.13 	The election of prospective Teachers Retirement Association plan
82.14 	coverage shall be made within one year of commencing eligible
82.15 	Minnesota State Colleges and Universities system employment.  If
82.16 	an election is not made within the specified election period due
82.17 	to a termination of Minnesota State Colleges and Universities
82.18 	system employment, an election may be made within 90 days of
82.19 	returning to eligible Minnesota State Colleges and Universities
82.20 	system employment.  All elections are irrevocable.  Before
82.21 	making an election, the eligible person must be covered by the
82.22 	plan indicated as default coverage under subdivision 3.
82.23 	(c) A purchase of service credit in the Teachers Retirement
82.24 	Association plan for any period or periods of Minnesota State
82.25 	Colleges and Universities system employment occurring prior to
82.26 	the election under paragraph (b) is prohibited.

82.27 	Sec. 8. Minnesota Statutes 2004, section 354B.21,
82.28 	subdivision 3, is amended to read:
82.29 		Subd. 3.Default coverage.  (a) Prior to making an
82.30 	election under subdivision 2, or if an eligible person fails to
82.31 	elect coverage by the plan under subdivision 2 or if the person
82.32 	fails to make a timely election, the following retirement
82.33 	coverage applies:
82.34 	(1) for employees of the board who are employed in faculty
82.35 	positions in the technical colleges, in the state universities
82.36 	or in the community colleges, the retirement coverage is by the
83.1 	plan established by this chapter;
83.2 	(2) for employees of the board who are employed in faculty
83.3 	positions in the technical colleges, the retirement coverage is
83.4 	by the plan established by this chapter unless on June 30, 1997,
83.5 	the employee was a member of the Teachers Retirement Association
83.6 	established under chapter 354 and then the retirement coverage
83.7 	is by the Teachers Retirement Association, or, unless the
83.8 	employee was a member of a first class city teacher retirement
83.9 	fund established under chapter 354A on June 30, 1995, and then
83.10 	the retirement coverage is by the Duluth Teachers Retirement
83.11 	Fund Association if the person was a member of that plan on June
83.12 	30, 1995, or the Minneapolis Teachers Retirement Fund
83.13 	Association if the person was a member of that plan on June 30,
83.14 	1995, or the St. Paul Teachers Retirement Fund Association if
83.15 	the person was a member of that plan on June 30, 1995; and
83.16 	(3) for employees of the board who are employed in eligible
83.17 	unclassified administrative positions, the retirement coverage
83.18 	is by the plan established by this chapter.
83.19 	(b) If an employee fails to correctly certify prior
83.20 	membership in the Teachers Retirement Association to the
83.21 	Minnesota State colleges and Universities system, the system
83.22 	shall not pay interest on employee contributions, employer
83.23 	contributions, and additional employer contributions to the
83.24 	Teachers Retirement Association under section 354.52,
83.25 	subdivision 4.

83.26 	Sec. 9. EFFECTIVE DATE.
 83.27 	(a) Sections 1, 3, 5, and 6 are effective July 1, 2005.
83.28 	(b) Sections 2 and 4 are effective retroactively from
83.29 	January 1, 2005.
83.30 	(c) Sections 7 and 8 are effective on the day following
83.31 	final enactment.

83.32 	ARTICLE 6
83.33 	VARIOUS RETIREMENT PLAN CONTRIBUTIONS
83.34 	AND CONTRIBUTION RATE INCREASES

83.35 	Section 1. Minnesota Statutes 2004, section 352.04,
83.36 	subdivision 2, is amended to read:
84.1 		Subd. 2.Employee contributions. (a) The employee
84.2 	contribution to the fund must be equal to 4.0 percent the
84.3 	following percentage of salary.:
84.4 	Effective before July 1, 2007 4.00
84.5 	      Effective July 1, 2007 4.25
84.6 	      Effective July 1, 2008 4.50
84.7 	      Effective July 1, 2009 4.75
84.8 	      Effective July 1, 2010 5.00 
84.9 	(b) These contributions must be made by deduction from
84.10 	salary as provided in subdivision 4.

84.11 	Sec. 2. Minnesota Statutes 2004, section 352.04,
84.12 	subdivision 3, is amended to read:
84.13 		Subd. 3.Employer contributions.  The employer
84.14 	contribution to the fund must be equal to 4.0 percent the
84.15 	following percentage of salary.:
84.16 	Effective before July 1, 2007 4.00
84.17 	      Effective July 1, 2007 4.25
84.18 	      Effective July 1, 2008 4.50
84.19 	      Effective July 1, 2009 4.75
84.20 	      Effective July 1, 2010 5.00 

84.21 	Sec. 3. Minnesota Statutes 2004, section 352.92,
84.22 	subdivision 1, is amended to read:
84.23 		Subdivision 1.Employee contributions.  Employee
84.24 	contributions of covered correctional employees must be in an
84.25 	amount equal to 5.69 percent the following percentage of salary
84.26 	.:
84.27 	Effective before July 1, 2007 5.69
84.28 	      Effective July 1, 2007 6.40
84.29 	      Effective July 1, 2008 7.00
84.30 	      Effective July 1, 2009 7.70
84.31 	      Effective July 1, 2010 8.60 

84.32 	Sec. 4. Minnesota Statutes 2004, section 352.92,
84.33 	subdivision 2, is amended to read:
84.34 		Subd. 2.Employer contributions.  The employer shall
84.35 	contribute for covered correctional employees an amount equal to
84.36 	7.98 percent the following percentage of salary.:
84.37 	Effective before July 1, 2007 7.98
84.38 	      Effective July 1, 2007 9.10
84.39 	      Effective July 1, 2008 10.10
84.40 	      Effective July 1, 2009 11.10
84.41 	      Effective July 1, 2010 12.10 

84.42 	Sec. 5. Minnesota Statutes 2004, section 352B.02,
84.43 	subdivision 1a, is amended to read:
84.44 		Subd. 1a.Member contributions.  Each member shall pay a
85.1 	sum equal to 8.40 percent the following percentage of the
85.2 	member's salary, which shall constitute constitutes the member
85.3 	contribution to the fund.:
85.4 	Effective before July 1, 2007 8.40
85.5 	      Effective July 1, 2007 9.10
85.6 	      Effective July 1, 2008 9.80 

85.7 	Sec. 6. Minnesota Statutes 2004, section 352B.02,
85.8 	subdivision 1c, is amended to read:
85.9 		Subd. 1c.Employer contributions. (a) In addition to
85.10 	member contributions, department heads shall pay a sum equal to
85.11 	12.60 percent the following percentage of the salary upon which
85.12 	deductions were made, which shall constitute constitutes the
85.13 	employer contribution to the fund.:
85.14 	Effective before July 1, 2007 12.60
85.15 	      Effective July 1, 2007 13.60
85.16 	      Effective July 1, 2008 14.60 
85.17 	(b) Department contributions must be paid out of money
85.18 	appropriated to departments for this purpose.

85.19 	Sec. 7. Minnesota Statutes 2004, section 352D.04,
85.20 	subdivision 2, is amended to read:
85.21 		Subd. 2.Contribution rates.  (a) The money used to
85.22 	purchase shares under this section is the employee and employer
85.23 	contributions provided in this subdivision.
85.24 	(b) The employee contribution is an amount equal to the
85.25 	employee contribution specified in section 352.04, subdivision 2
85.26 	four percent of salary.
85.27 	(c) The employer contribution is an amount equal to six
85.28 	percent of salary.
85.29 	(d) These contributions must be made in the manner provided
85.30 	in section 352.04, subdivisions 4, 5, and 6.
85.31 	(e) For members of the legislature, the contributions under
85.32 	this subdivision also must be made on per diem payments received
85.33 	during a regular or special legislative session, but may not be
85.34 	made on per diem payments received outside of a regular or
85.35 	special legislative session, on the additional compensation
85.36 	attributable to a leadership position under section 3.099,
85.37 	subdivision 3, living expense payments under section 3.101, or
85.38 	special session living expense payments under section 3.103.
86.1 	(f) For a judge who is a member of the unclassified plan
86.2 	under section 352D.02, subdivision 1, paragraph (c), clause
86.3 	(16), the employee contribution rate is eight percent of salary,
86.4 	and there is no employer contribution.

86.5 	Sec. 8. Minnesota Statutes 2004, section 353.27,
86.6 	subdivision 2, is amended to read:
86.7 		Subd. 2.Employee contribution.  (a) The employee
86.8 	contribution is the following applicable percentage of the total
86.9 	salary amount for a "basic member" and for a "coordinated
86.10 	member":
86.11 	Basic    Coordinated
86.12 	                                   Program     Program
86.13 	Before January 1, 2002 8.75 4.75
86.14 	Effective January 1, 2002 
86.15 	Effective before January 1, 2006 9.10         5.10
86.16 	Effective January 1, 2006 9.10 5.50
86.17 	Effective January 1, 2007 9.10 5.75
86.18 	Effective January 1, 2008 9.10 6.00 plus any
86.19 	                                                 contribution
86.20 	                                                 rate adjustment
86.21 	                                                 under
86.22 	                                                 subdivision 3b 
86.23 	(b) These contributions must be made by deduction from
86.24 	salary as defined in section 353.01, subdivision 10,in the
86.25 	manner provided in subdivision 4. Where If any portion of a
86.26 	member's salary is paid from other than public funds, such the 
86.27 	member's employee contribution must be based on the total salary
86.28 	received by the member from all sources.

86.29 	Sec. 9. Minnesota Statutes 2004, section 353.27,
86.30 	subdivision 3, is amended to read:
86.31 		Subd. 3.Employer contribution.  (a) The employer
86.32 	contribution is the following applicable percentage of the total
86.33 	salary amount for "basic members" and for "coordinated members":
86.34 	Basic     Coordinated
86.35 	                                 Program      Program
86.36 	Before January 1, 2002 8.75 4.75
87.1 	Effective January 1, 2002 
87.2 	Effective before January 1, 2006 9.10          5.10
87.3 	Effective January 1, 2006 9.10 5.50
87.4 	Effective January 1, 2007 9.10 5.75
87.5 	Effective January 1, 2008 9.10 6.00 plus any
87.6 	                                                contribution
87.7 	                                                rate adjustment
87.8 	                                                under
87.9 	                                                subdivision 3b 
87.10 	(b) This contribution must be made from funds available to
87.11 	the employing subdivision by the means and in the manner
87.12 	provided in section 353.28.

87.13 	Sec. 10. Minnesota Statutes 2004, section 353.27,
87.14 	subdivision 3a, is amended to read:
87.15 		Subd. 3a.Additional employer contribution.  (a) An
87.16 	additional employer contribution must be made equal to (1) 2.68
87.17 	percent of the following applicable percentage of the total
87.18 	salary of each amount for "basic member members ";and (2)
87.19 	.43 percent of the total salary of each for "coordinated member.
87.20 	members ":
87.21 	Basic Coordinated
87.22 	                                    Program Program
87.23 	Effective before January 1, 2006 2.68 .43
87.24 	Effective January 1, 2006 2.68 .50
87.25 	Effective January 1, 2009 2.68 .75
87.26 	Effective January 1, 2010 2.68 1.00 
87.27 	These contributions must be made from funds available to
87.28 	the employing subdivision by the means and in the manner
87.29 	provided in section 353.28.
87.30 	(b) The coordinated program contribution rates set forth in
87.31 	paragraph (a) effective for January 1, 2009, or January 1, 2010,
87.32 	must not be implemented if, following receipt of the July 1,
87.33 	2008, or July 1, 2009, annual actuarial valuation reports under
87.34 	section 356.215, respectively, the actuarially required
87.35 	contributions are equal to or less than the total rates under
87.36 	this section in effect as of January 1, 2008.
88.1 	(c) This subdivision is repealed once the actuarial value
88.2 	of the assets of the plan equal or exceed the actuarial accrued
88.3 	liability of the plan as determined by the actuary retained by
88.4 	the Legislative Commission on Pensions and Retirement under
88.5 	section 356.215.  The repeal is effective on the first day of
88.6 	the first full pay period occurring after March 31 of the
88.7 	calendar year following the issuance of the actuarial valuation
88.8 	upon which the repeal is based.

88.9 	Sec. 11. Minnesota Statutes 2004, section 353.27, is
88.10 	amended by adding a subdivision to read:
88.11 		Subd. 3b.Change in employee and employer contributions
88.12 	in certain instances. (a) For purposes of this section, a
88.13 	contribution sufficiency exists if the total of the employee
88.14 	contribution under subdivision 2, the employer contribution
88.15 	under subdivision 3, the additional employer contribution under
88.16 	subdivision 3a, and any additional contribution previously
88.17 	imposed under this subdivision exceeds the total of the normal
88.18 	cost, the administrative expenses, and the amortization
88.19 	contribution of the retirement plan as reported in the most
88.20 	recent actuarial valuation of the retirement plan prepared by
88.21 	the actuary retained under section 356.214 and prepared under
88.22 	section 356.215 and the standards for actuarial work of the
88.23 	Legislative Commission on Pensions and Retirement.  For purposes
88.24 	of this section, a contribution deficiency exists if the total
88.25 	of the employee contributions under subdivision 2, the employer
88.26 	contributions under subdivision 3, the additional employer
88.27 	contribution under subdivision 3a, and any additional
88.28 	contribution previously imposed under this subdivision is less
88.29 	than the total of the normal cost, the administrative expenses,
88.30 	and the amortization contribution of the retirement plan as
88.31 	reported in the most recent actuarial valuation of the
88.32 	retirement plan prepared by the actuary retained under section
88.33 	356.214 and prepared under section 356.215 and the standards for
88.34 	actuarial work of the Legislative Commission on Pensions and
88.35 	Retirement.
88.36 	(b) Employee and employer contributions under subdivisions
89.1 	2 and 3 must be adjusted:
89.2 	(1) if, after July 1, 2010, the regular actuarial
89.3 	valuations of the general employees retirement plan of the
89.4 	Public Employees Retirement Association under section 356.215
89.5 	indicate that there is a contribution sufficiency under
89.6 	paragraph (a) equal to or greater than 0.5 percent of covered
89.7 	payroll for two consecutive years, the coordinated program
89.8 	employee and employer contribution rates must be decreased as
89.9 	determined under paragraph (c) to a level such that the
89.10 	sufficiency equals no more than 0.25 percent of covered payroll
89.11 	based on the most recent actuarial valuation; or 
89.12 	(2) if, after July 1, 2010, the regular actuarial
89.13 	valuations of the general employees retirement plan of the
89.14 	Public Employees Retirement Association under section 356.215
89.15 	indicate that there is a deficiency equal to or greater than 0.5
89.16 	percent of covered payroll for two consecutive years, the
89.17 	coordinated program employee and employer contribution rates
89.18 	must be increased as determined under paragraph (c) to a level
89.19 	such that no deficiency exists based on the most recent
89.20 	actuarial valuation.
89.21 	(c) The contribution rate increase or decrease must be
89.22 	determined by the executive director of the Public Employees
89.23 	Retirement Association, must be reported to the chair and the
89.24 	executive director of the Legislative Commission on Pensions and
89.25 	Retirement on or before the next February 1, and, if the
89.26 	Legislative Commission on Pensions and Retirement does not
89.27 	recommend against the rate change or does not recommend a
89.28 	modification in the rate change, is effective on the next July 1
89.29 	following the determination by the executive director that a
89.30 	contribution deficiency or sufficiency has existed for two
89.31 	consecutive fiscal years based on the most recent actuarial
89.32 	valuations under section 356.215.  If the actuarially required
89.33 	contribution exceeds or is less than the total support provided
89.34 	by the combined employee and employer contribution rates by more
89.35 	than 0.5 percent of covered payroll, the coordinated program
89.36 	employee and employer contribution rates must be adjusted
90.1 	incrementally over one or more years to a level such that there
90.2 	remains a contribution sufficiency of no more than 0.25 percent
90.3 	of covered payroll.
90.4 	(d) No incremental adjustment may exceed 0.25 percent for
90.5 	either the coordinated program employee and employer
90.6 	contribution rates per year in which any adjustment is
90.7 	implemented.  A contribution rate adjustment under this
90.8 	subdivision must not be made until at least two years have
90.9 	passed since fully implementing a previous adjustment under this
90.10 	subdivision.

90.11 	Sec. 12. Minnesota Statutes 2004, section 353.28,
90.12 	subdivision 5, is amended to read:
90.13 		Subd. 5.Interest charges chargeable on amounts due.  Any
90.14 	amount due under this section or section 353.27, subdivision 4,
90.15 	is payable with interest at an annual compound rate of 8.5
90.16 	percent compounded annually from the date due until the date
90.17 	payment is received by the association, with a minimum interest
90.18 	charge of $10. Interest for past due payments of excess police
90.19 	state aid under section 69.031, subdivision 5, must be charged
90.20 	at an annual rate of 8.5 percent compounded annually.

90.21 	Sec. 13. Minnesota Statutes 2004, section 353.28,
90.22 	subdivision 6, is amended to read:
90.23 		Subd. 6.failure to pay collection of unpaid amounts. (a) 
90.24 	If the a governmental subdivision which receives the direct
90.25 	proceeds of property taxation fails to pay amounts an amount due
90.26 	under chapters chapter 353, 353A, 353B, 353C, and or 353D or
90.27 	fails to make payments of excess police state aid to the public
90.28 	employees police and fire fund under section 69.031, subdivision
90.29 	5, the executive director shall certify those amounts the amount 
90.30 	to the governmental subdivision for payment.  If the
90.31 	governmental subdivision fails to remit the sum so due in a
90.32 	timely fashion, the executive director shall certify amounts the
90.33 	amount to the applicable county auditor for collection.  The
90.34 	county auditor shall collect such amounts the amount out of the
90.35 	revenue of the governmental subdivision, or shall add them the
90.36 	amount to the levy of the governmental subdivision and make
91.1 	payment directly to the association.  This tax shall must be
91.2 	levied, collected, and apportioned in the manner that other
91.3 	taxes are levied, collected, and apportioned.
91.4 	(b) If a governmental subdivision which is not funded
91.5 	directly from the proceeds of property taxation fails to pay an
91.6 	amount due under this chapter, the executive director shall
91.7 	certify the amount to the governmental subdivision for payment.
91.8 	If the governmental subdivision fails to pay the amount for a
91.9 	period of 60 days after certification, the executive director
91.10 	shall certify the amount to the commissioner of finance, who
91.11 	shall deduct the amount from any subsequent state-aid payment or
91.12 	state appropriation amount applicable to the governmental
91.13 	subdivision.

91.14 	Sec. 14. Minnesota Statutes 2004, section 353.65,
91.15 	subdivision 2, is amended to read:
91.16 		Subd. 2.Employee contribution rate. (a) The employee
91.17 	contribution is an amount equal to 6.2 percent the following
91.18 	percentage of the total salary of the member.:
91.19 	Effective before July 1, 2006 6.20
91.20 	      Effective July 1, 2006 7.00
91.21 	      Effective July 1, 2007 7.80
91.22 	      Effective July 1, 2008 8.60
91.23 	      Effective July 1, 2009 9.40 
91.24 	(b) This contribution must be made by deduction from salary
91.25 	in the manner provided in subdivision 4.  Where any portion of a
91.26 	member's salary is paid from other than public funds, the
91.27 	member's employee contribution is based on the total salary
91.28 	received from all sources.

91.29 	Sec. 15. Minnesota Statutes 2004, section 353.65,
91.30 	subdivision 3, is amended to read:
91.31 		Subd. 3.Employer contribution rate. (a) The employer
91.32 	contribution shall be is an amount equal to 9.3 percent the
91.33 	following percentage of the total salary of every member.:
91.34 	Effective before July 1, 2006 9.30
91.35 	      Effective July 1, 2006 10.50
91.36 	      Effective July 1, 2007 11.70
91.37 	      Effective July 1, 2008 12.90
91.38 	      Effective July 1, 2009 14.10 
91.39 	(b) This contribution shall must be made from funds
91.40 	available to the employing subdivision by the means and in the
92.1 	manner provided in section 353.28.

92.2 	Sec. 16. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION;
92.3 	INTEREST ON SERVICE CREDIT PURCHASE PAYMENT RETURN.
 92.4 	If a former employee of the Minneapolis Community
92.5 	Development Agency made a prior service credit purchase payment
92.6 	under Minnesota Statutes 2002, section 356.55, in an amount that
92.7 	is greater than the actually required payment amount because of
92.8 	the use of an inaccurate salary figure or other similar
92.9 	reporting or clerical error, the general employees retirement
92.10 	plan of the Public Employees Retirement Association may pay
92.11 	interest on the overage amount at an annual compound rate of six
92.12 	percent per year.

92.13 	Sec. 17. RETURN OF PRIOR SERVICE CREDIT PURCHASE PAYMENT
92.14 	FOR CERTAIN MINNEAPOLIS CITY EMPLOYEES.
 92.15 	(a) An eligible person, upon written application, may
92.16 	receive a return of a prior service credit purchase payment
92.17 	under Minnesota Statutes 2002, section 356.55, plus interest on
92.18 	the amount at an annual compound rate of six percent per year.
92.19 	The return amount and interest must be made in an
92.20 	institution-to-institution transfer to a federal tax qualified
92.21 	retirement plan or account and may not be paid directly to an
92.22 	individual.
92.23 	(b) An eligible person is a person who was an employee of
92.24 	the Minneapolis Community Development Agency and made a payment
92.25 	for the purchase of prior service credit under Laws 2003,
92.26 	chapter 127, article 12, section 31, subdivision 4, and
92.27 	Minnesota Statutes 2002, section 356.55, in an erroneous amount
92.28 	because of an inaccurate salary figure supplied by the employing
92.29 	agency.

92.30 	Sec. 18. APPROPRIATION.
 92.31 	For each of fiscal years 2006 and 2007, $2,000,000 is
92.32 	appropriated from the general fund to the commissioner of
92.33 	finance to be distributed to counties and home rule charter and
92.34 	statutory cities in proportion to each of their shares of the
92.35 	total additional employer contributions for all counties and
92.36 	cities under this article.

93.1 	Sec. 19. EFFECTIVE DATE.
 93.2 	(a) Sections 1 to 15 and 18 are effective July 1, 2005.
93.3 	(b) Sections 16 and 17 are effective the day following
93.4 	final enactment.
93.5 	(c) Section 17 expires September 30, 2005.

93.6 	ARTICLE 7
93.7 	PENSION BENEFITS UPON PRIVATIZATION

93.8 	Section 1. Minnesota Statutes 2004, section 353F.02,
93.9 	subdivision 4, is amended to read:
93.10 		Subd. 4.Medical facility.  "Medical facility" means:
93.11 	(1) Bridges Medical Services;
93.12 	(2) the Fair Oaks Lodge, Wadena;
93.13 	(2) (3) the Glencoe Area Health Center;
93.14 	(3) (4) the Hutchinson Area Health Care;
93.15 	(5) the Kanabec Hospital;
93.16 	(4) (6) the Luverne Public Hospital;
93.17 	(7) the Northfield Hospital;
93.18 	(5) (8) the RenVilla Nursing Home;
93.19 	(6) (9) the Renville County Hospital in Olivia;
93.20 	(7) (10) the St. Peter Community Healthcare Center; and
93.21 	(8) (11) the Waconia-Ridgeview Medical Center.

93.22 	Sec. 2. Minnesota Statutes 2004, section 471A.10, is
93.23 	amended to read:
93.24 	471A.10 PUBLIC EMPLOYEE LAWS; SALE OR LEASE OF EXISTING
93.25 	FACILITY.
93.26 	(a) Unless expressly provided therein, and except as
93.27 	provided in this section, no state law, charter provision, or
93.28 	ordinance of a municipality relating to public employees shall
93.29 	apply to a person solely by reason of that person's employment
93.30 	by a private vendor in connection with services rendered under a
93.31 	service contract.
93.32 	(b) A private vendor purchasing or leasing existing related
93.33 	facilities from a municipality or operating or maintaining the
93.34 	facility shall recognize all exclusive bargaining
93.35 	representatives and existing labor agreements and those
93.36 	agreements shall remain in force until they expire by their
94.1 	terms.  Persons who are not who were employed by a municipality
94.2 	in a related facility at the time of and who were members of the
94.3 	Public Employees Retirement Association general plan due to that
94.4 	employment are not permitted to remain as active members of the
94.5 	plan following a lease or purchase of the facility by the a 
94.6 	private vendor are not "public employees" within the meaning of
94.7 	the Public Employees Retirement Act, chapter 353.  Persons
94.8 	employed by a municipality in a related facility at the time of
94.9 	a lease or purchase of the facility by a private vendor shall
94.10 	continue to be considered to be "public employees" within the
94.11 	meaning of the Public Employees Retirement Act, chapter 353, but
94.12 	may elect to terminate their participation in the Public
94.13 	Employees Retirement Association as provided in this section.
94.14 	Each such employee may exercise the election annually on the
94.15 	anniversary of the person's initial employment by the
94.16 	municipality.  An employee electing to terminate participation
94.17 	in the association is entitled to benefits that the employee
94.18 	would be entitled to if terminating public employment and may
94.19 	participate in a retirement program established by the private
94.20 	vendor.

94.21 	Sec. 3. Laws 2004, chapter 267, article 12, section 4, is
94.22 	amended to read:
94.23 	Sec. 4EFFECTIVE DATE.
 94.24 	(a) Section 1, relating to the Fair Oaks Lodge, Wadena, is
94.25 	effective upon the latter of:
94.26 	(1) the day after the governing body of Todd County and its
94.27 	chief clerical officer timely complete their compliance with
94.28 	Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
94.29 	(2) the day after the governing body of Wadena County and
94.30 	its chief clerical officer timely complete their compliance with
94.31 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
94.32 	(b) Section 1, relating to the RenVilla Nursing Home, is
94.33 	effective upon the latter of:
94.34 	(1) the day after the governing body of the city of
94.35 	Renville and its chief clerical officer timely complete their
94.36 	compliance with Minnesota Statutes, section 645.021,
95.1 	subdivisions 2 and 3, except that the certificate of approval
95.2 	must be filed before January 1, 2006; and
95.3 	(2) the first day of the month next following certification
95.4 	to the governing body of the city of Renville by the executive
95.5 	director of the Public Employees Retirement Association that the
95.6 	actuarial accrued liability of the special benefit coverage
95.7 	proposed for extension to the privatized RenVilla Nursing Home
95.8 	employees under section 1 does not exceed the actuarial gain
95.9 	otherwise to be accrued by the Public Employees Retirement
95.10 	Association, as calculated by the consulting actuary retained by
95.11 	the Legislative Commission on Pensions and Retirement, or the
95.12 	actuary retained under Minnesota Statutes, section 356.214,
95.13 	whichever is applicable.
95.14 	(c) The cost of the actuarial calculations must be borne by
95.15 	the city of Renville or the purchaser of the RenVilla Nursing
95.16 	Home.
95.17 	(d) Section 1, relating to the St. Peter Community
95.18 	Healthcare Center, is effective upon the latter of:
95.19 	(1) the day after the governing body of the city of St.
95.20 	Peter and its chief clerical officer timely complete their
95.21 	compliance with Minnesota Statutes, section 645.021,
95.22 	subdivisions 2 and 3; and
95.23 	(2) the first day of the month next following certification
95.24 	to the governing body of the city of St. Peter by the executive
95.25 	director of the Public Employees Retirement Association that the
95.26 	actuarial accrued liability of the special benefit coverage
95.27 	proposed for extension to the privatized St. Peter Community
95.28 	Healthcare Center employees under section 1 does not exceed the
95.29 	actuarial gain otherwise to be accrued by the Public Employees
95.30 	Retirement Association, as calculated by the consulting actuary
95.31 	retained by the Legislative Commission on Pensions and
95.32 	Retirement, or the actuary retained under Minnesota Statutes,
95.33 	section 356.214, whichever is applicable.
95.34 	(e) The cost of the actuarial calculations must be borne by
95.35 	the city of St. Peter or the purchaser of the St. Peter
95.36 	Community Healthcare Center.
96.1 	(f) If the required actions under paragraphs (b) and (c)
96.2 	occur, section 1 applies retroactively to the RenVilla Nursing
96.3 	Home as of the date of privatization.
96.4 	(g) If the required actions under paragraph (a) occur,
96.5 	section 1 applies retroactively to Fair Oaks Lodge, Wadena, as
96.6 	of January 1, 2004.
96.7 	(h) Sections 2 and 3 are effective on the day following
96.8 	final enactment.

96.9 	Sec. 4. EFFECTIVE DATE.
 96.10 	(a) Section 1, relating to Bridges Medical Services, is
96.11 	effective upon the later of:
96.12 	(1) the day after the governing body of the city of Ada and
96.13 	its chief clerical officer timely complete their compliance with
96.14 	Minnesota Statutes, section 645.021, subdivisions 2 and 3; and 
96.15 	(2) the first day of the month next following certification
96.16 	to the governing body of the city of Ada by the executive
96.17 	director of the Public Employees Retirement Association that the
96.18 	actuarial accrued liability of the special benefit coverage
96.19 	proposed for extension to the privatized Bridges Medical
96.20 	Services employees under section 1 does not exceed the actuarial
96.21 	gain otherwise to be accrued by the Public Employees Retirement
96.22 	Association, as calculated by the consulting actuary retained
96.23 	under Minnesota Statutes, section 356.214.
96.24 	(b) Section 1, relating to the Hutchinson Area Health Care,
96.25 	is effective upon the later of:
96.26 	(1) the day after the governing body of the city of
96.27 	Hutchinson and its chief clerical officer timely complete their
96.28 	compliance with Minnesota Statutes, section 645.021,
96.29 	subdivisions 2 and 3; and 
96.30 	(2) the first day of the month next following certification
96.31 	to the governing body of the city of Hutchinson by the executive
96.32 	director of the Public Employees Retirement Association that the
96.33 	actuarial accrued liability of the special benefit coverage
96.34 	proposed for extension to the privatized Hutchinson Area Health
96.35 	Care employees under section 1 does not exceed the actuarial
96.36 	gain otherwise to be accrued by the Public Employees Retirement
97.1 	Association, as calculated by the consulting actuary retained by
97.2 	the Legislative Commission on Pensions and Retirement.
97.3 	(c) Section 1, relating to the Northfield Hospital, is
97.4 	effective upon the later of:
97.5 	(1) the day after the governing body of the city of
97.6 	Northfield and its chief clerical officer timely complete their
97.7 	compliance with Minnesota Statutes, section 645.021,
97.8 	subdivisions 2 and 3; and 
97.9 	(2) the first day of the month next following certification
97.10 	to the governing body of the city of Northfield by the executive
97.11 	director of the Public Employees Retirement Association that the
97.12 	actuarial accrued liability of the special benefit coverage
97.13 	proposed for extension to the privatized Northfield Hospital
97.14 	employees under section 1 does not exceed the actuarial gain
97.15 	otherwise to be accrued by the Public Employees Retirement
97.16 	Association, as calculated by the consulting actuary retained by
97.17 	the Legislative Commission on Pensions and Retirement.
97.18 	(d) The cost of the actuarial calculations must be borne by
97.19 	the facility, the city in which the facility is located, or the
97.20 	purchaser of the facility.
97.21 	(e) If the required actions in paragraphs (a), (b), or (c)
97.22 	and (d) occur, section 1 applies retroactively to the date of
97.23 	privatization.
97.24 	(f) Section 2 is effective the day following final
97.25 	enactment and applies to privatizations occurring on or after
97.26 	the effective date.
97.27 	(g) Section 3 is effective the day following final
97.28 	enactment.

97.29 	ARTICLE 8
97.30 	FIRST CLASS CITY TEACHER
97.31 	RETIREMENT FUND ASSOCIATIONS

97.32 	Section 1. Minnesota Statutes 2004, section 354A.021, is
97.33 	amended by adding a subdivision to read:
97.34 		Subd. 9.Updated articles of incorporation and bylaws;
97.35 	filing. (a) On or before July 1, 2006, and within six months of
97.36 	the date of the approval of any amendment to the articles of
98.1 	incorporation or bylaws, the chief administrative officer of
98.2 	each first class city teacher retirement fund association shall
98.3 	prepare and publish an updated compilation of the articles of
98.4 	incorporation and the bylaws of the association.
98.5 	(b) The chief administrative officer of the first class
98.6 	city teacher retirement fund association must certify the
98.7 	accuracy and the completeness of the compilation.
98.8 	(c) The compilation of the articles of incorporation and
98.9 	bylaws of a first class city teacher retirement fund association
98.10 	must contain an index.
98.11 	(d) The compilation must be made available to association
98.12 	members and other interested parties.  The association may
98.13 	charge a fee for a copy that reflects the price of printing or
98.14 	otherwise producing the copy.  Two copies of the compilation
98.15 	must be filed, without charge, by each retirement fund
98.16 	association with the Legislation Commission on Pensions and
98.17 	Retirement, the Legislative Reference Library, the state
98.18 	auditor, the commissioner of education, the chancellor of the
98.19 	Minnesota State Colleges and Universities system, and the
98.20 	superintendent of the applicable school district.
98.21 	(e) A first class city teacher retirement fund association
98.22 	may contract with the revisor of statutes for the preparation of
98.23 	the compilation.
98.24 	(f) If a first class city teacher retirement fund
98.25 	association makes an updated copy of its articles of
98.26 	incorporation and bylaws available on its Web site, the
98.27 	retirement fund association is not obligated to file a hard copy
98.28 	of the documents under paragraph (d) for the applicable filing
98.29 	period.

98.30 	Sec. 2. EFFECTIVE DATE.
 98.31 	Section 1 is effective July 1, 2005.

98.32 	ARTICLE 9
98.33 	MINNESOTA STATE COLLEGES AND UNIVERSITIES
98.34 	INDIVIDUAL RETIREMENT ACCOUNT PLAN CHANGES

98.35 	Section 1. Minnesota Statutes 2004, section 354B.25,
98.36 	subdivision 2, is amended to read:
99.1 		Subd. 2.Investment options. (a) The plan administrator
99.2 	shall arrange for the purchase of investment products.
99.3 	(b) The investment products must be purchased with
99.4 	contributions under section 354B.23 or with money or assets
99.5 	otherwise provided by law by authority of the board.
99.6 	(c) Various investment accounts offered through the
99.7 	Minnesota supplemental investment fund established under section
99.8 	11A.17 and administered by the State Board of Investment is one
99.9 	of the may be included as investment products for the individual
99.10 	retirement account plan.  Direct access must also be provided to
99.11 	lower expense and no-load mutual funds, as those terms are
99.12 	defined by the federal Securities and Exchange Commission,
99.13 	including stock funds, bond funds, and balanced funds.  Other
99.14 	investment products or combination of investment products which
99.15 	may be included are:
99.16 	(1) savings accounts at federally insured financial
99.17 	institutions;
99.18 	(2) life insurance contracts, fixed and variable annuity
99.19 	contracts from companies that are subject to regulation by the
99.20 	commerce commissioner;
99.21 	(3) investment options from open-ended investment companies
99.22 	registered under the federal Investment Company Act of 1940,
99.23 	United States Code, title 15, sections 80a-1 to 80a-64;
99.24 	(4) investment options from a firm that is a registered
99.25 	investment advisor under the federal Investment Advisers Act of
99.26 	1940, United States Code, title 15, sections 80b-1 to 80b-21;
99.27 	and
99.28 	(5) investment options of a bank as defined in United
99.29 	States Code, title 15, section 80b-2, subsection (a), paragraph
99.30 	2, or a bank holding company as defined in the Bank Holding
99.31 	Company Act of 1956, United States Code, title 12, section 1841,
99.32 	subsection (a), paragraph (1).

99.33 	Sec. 2. EFFECTIVE DATE.
 99.34 	Section 1 is effective the day following final enactment.

99.35 	ARTICLE 10
99.36 	SUPPLEMENTAL RETIREMENT PLANS

100.1 	Section 1. Minnesota Statutes 2004, section 356.24,
100.2 	subdivision 1, is amended to read:
100.3 		Subdivision 1.Restriction; exceptions.  It is unlawful
100.4 	for a school district or other governmental subdivision or state
100.5 	agency to levy taxes for, or to contribute public funds to a
100.6 	supplemental pension or deferred compensation plan that is
100.7 	established, maintained, and operated in addition to a primary
100.8 	pension program for the benefit of the governmental subdivision
100.9 	employees other than:
100.10 	(1) to a supplemental pension plan that was established,
100.11 	maintained, and operated before May 6, 1971;
100.12 	(2) to a plan that provides solely for group health,
100.13 	hospital, disability, or death benefits;
100.14 	(3) to the individual retirement account plan established
100.15 	by chapter 354B;
100.16 	(4) to a plan that provides solely for severance pay under
100.17 	section 465.72 to a retiring or terminating employee;
100.18 	(5) for employees other than personnel employed by the
100.19 	Board of Trustees of the Minnesota State Colleges and
100.20 	Universities and covered under the Higher Education Supplemental
100.21 	Retirement Plan under chapter 354C, if the supplemental plan
100.22 	coverage is provided for in a personnel policy of the public
100.23 	employer or in the collective bargaining agreement between the
100.24 	public employer and the exclusive representative of public
100.25 	employees in an appropriate unit, in an amount matching employee
100.26 	contributions on a dollar for dollar basis, but not to exceed an
100.27 	employer contribution of $2,000 a year per employee;
100.28 	(i) to the state of Minnesota deferred compensation plan
100.29 	under section 352.96; or
100.30 	(ii) in payment of the applicable portion of the
100.31 	contribution made to any investment eligible under section
100.32 	403(b) of the Internal Revenue Code, if the employing unit has
100.33 	complied with any applicable pension plan provisions of the
100.34 	Internal Revenue Code with respect to the tax-sheltered annuity
100.35 	program during the preceding calendar year;
100.36 	(6) for personnel employed by the Board of Trustees of the
101.1 	Minnesota State Colleges and Universities and not covered by
101.2 	clause (5), to the supplemental retirement plan under chapter
101.3 	354C, if the supplemental plan coverage is provided for in a
101.4 	personnel policy or in the collective bargaining agreement of
101.5 	the public employer with the exclusive representative of the
101.6 	covered employees in an appropriate unit, in an amount matching
101.7 	employee contributions on a dollar for dollar basis, but not to
101.8 	exceed an employer contribution of $2,700 a year for each
101.9 	employee;
101.10 	(7) to a supplemental plan or to a governmental trust to
101.11 	save for postretirement health care expenses qualified for
101.12 	tax-preferred treatment under the Internal Revenue Code, if the
101.13 	supplemental plan coverage is provided for in a personnel policy
101.14 	or in the collective bargaining agreement of a public employer
101.15 	with the exclusive representative of the covered employees in an
101.16 	appropriate unit;
101.17 	(8) to the laborer's national industrial pension fund or to
101.18 	a laborer's local pension fund for the employees of a
101.19 	governmental subdivision who are covered by a collective
101.20 	bargaining agreement that provides for coverage by that fund and
101.21 	that sets forth a fund contribution rate, but not to exceed an
101.22 	employer contribution of $2,000 $5,000 per year per employee;
101.23 	(9) to the plumbers' and pipefitters' national pension fund
101.24 	or to a plumbers' and pipefitters' local pension fund for the
101.25 	employees of a governmental subdivision who are covered by a
101.26 	collective bargaining agreement that provides for coverage by
101.27 	that fund and that sets forth a fund contribution rate, but not
101.28 	to exceed an employer contribution of $2,000 $5,000 per year per
101.29 	employee;
101.30 	(10) to the international union of operating engineers
101.31 	pension fund for the employees of a governmental subdivision who
101.32 	are covered by a collective bargaining agreement that provides
101.33 	for coverage by that fund and that sets forth a fund
101.34 	contribution rate, but not to exceed an employer contribution of
101.35 	$2,000 $5,000 per year per employee; or
101.36 	(11) to a supplemental plan organized and operated under
102.1 	the federal Internal Revenue Code, as amended, that is wholly
102.2 	and solely funded by the employee's accumulated sick leave,
102.3 	accumulated vacation leave, and accumulated severance pay at the
102.4 	date of retirement or the termination of active employment.

102.5 	Sec. 2. EFFECTIVE DATE.
 102.6 	Section 1 is effective the day following final enactment.

102.7 	ARTICLE 11
102.8 	VOLUNTEER FIREFIGHTER RELIEF
102.9 	ASSOCIATION CHANGES

102.10 	Section 1. Minnesota Statutes 2004, section 69.051,
102.11 	subdivision 1, is amended to read:
102.12 		Subdivision 1.Financial report and audit.  The board of
102.13 	each salaried firefighters' relief association, police relief
102.14 	association, and volunteer firefighters' relief association as
102.15 	defined in section 424A.001, subdivision 4, with assets of at
102.16 	least $200,000 or liabilities of at least $200,000 in the prior
102.17 	year or in any previous year, according to the most recent 
102.18 	applicable actuarial valuation or financial report if no
102.19 	valuation is required, shall:
102.20 	(1) prepare a financial report covering the special and
102.21 	general funds of the relief association for the preceding fiscal
102.22 	year on a form prescribed by the state auditor.  The financial
102.23 	report shall must contain financial statements and disclosures
102.24 	which present the true financial condition of the relief
102.25 	association and the results of relief association operations in
102.26 	conformity with generally accepted accounting principles and in
102.27 	compliance with the regulatory, financing and funding provisions
102.28 	of this chapter and any other applicable laws.  The financial
102.29 	report shall must be countersigned by the municipal clerk or
102.30 	clerk-treasurer of the municipality in which the relief
102.31 	association is located if the relief association is a
102.32 	firefighters' relief association which is directly associated
102.33 	with a municipal fire department or is a police relief
102.34 	association, or countersigned by the secretary of the
102.35 	independent nonprofit firefighting corporation and by the
102.36 	municipal clerk or clerk-treasurer of the largest municipality
103.1 	in population which contracts with the independent nonprofit
103.2 	firefighting corporation if the volunteer firefighter relief
103.3 	association is a subsidiary of an independent nonprofit
103.4 	firefighting corporation;
103.5 	(2) file the financial report in its office for public
103.6 	inspection and present it to the city council after the close of
103.7 	the fiscal year.  One copy of the financial report shall must be
103.8 	furnished to the state auditor after the close of the fiscal
103.9 	year; and
103.10 	(3) submit to the state auditor audited financial
103.11 	statements which have been attested to by a certified public
103.12 	accountant, public accountant, or the state auditor within 180
103.13 	days after the close of the fiscal year.  The state auditor may
103.14 	accept this report in lieu of the report required in clause (2).

103.15 	Sec. 2. Minnesota Statutes 2004, section 69.051,
103.16 	subdivision 1a, is amended to read:
103.17 		Subd. 1a.Financial statement.  (a) The board of each
103.18 	volunteer firefighters' relief association, as defined in
103.19 	section 424A.001, subdivision 4, with assets of less than
103.20 	$200,000 and liabilities less than $200,000, according to the
103.21 	most recent financial report, shall that is not required to file
103.22 	a financial report and audit under subdivision 1 must prepare a
103.23 	detailed statement of the financial affairs for the preceding
103.24 	fiscal year of the relief association's special and general
103.25 	funds in the style and form prescribed by the state auditor.
103.26 	The detailed statement must show the sources and amounts of all
103.27 	money received; all disbursements, accounts payable and accounts
103.28 	receivable; the amount of money remaining in the treasury; total
103.29 	assets including a listing of all investments; the accrued
103.30 	liabilities; and all items necessary to show accurately the
103.31 	revenues and expenditures and financial position of the relief
103.32 	association.
103.33 	(b) The detailed financial statement required under
103.34 	paragraph (a) must be certified by an independent public
103.35 	accountant or auditor or by the auditor or accountant who
103.36 	regularly examines or audits the financial transactions of the
104.1 	municipality.  In addition to certifying the financial condition
104.2 	of the special and general funds of the relief association, the
104.3 	accountant or auditor conducting the examination shall give an
104.4 	opinion as to the condition of the special and general funds of
104.5 	the relief association, and shall comment upon any exceptions to
104.6 	the report.  The independent accountant or auditor shall must 
104.7 	have at least five years of public accounting, auditing, or
104.8 	similar experience, and shall must not be an active, inactive,
104.9 	or retired member of the relief association or the fire or
104.10 	police department.
104.11 	(c) The detailed statement required under paragraph (a)
104.12 	must be countersigned by the municipal clerk or clerk-treasurer
104.13 	of the municipality, or, where applicable, by the secretary of
104.14 	the independent nonprofit firefighting corporation and by the
104.15 	municipal clerk or clerk-treasurer of the largest municipality
104.16 	in population which contracts with the independent nonprofit
104.17 	firefighting corporation if the relief association is a
104.18 	subsidiary of an independent nonprofit firefighting corporation.
104.19 	(d) The volunteer firefighters' relief association board
104.20 	must file the detailed statement required under paragraph (a) in
104.21 	the relief association office for public inspection and present
104.22 	it to the city council within 45 days after the close of the
104.23 	fiscal year, and must submit a copy of the detailed statement to
104.24 	the state auditor within 90 days of the close of the fiscal year.

104.25 	Sec. 3. Minnesota Statutes 2004, section 69.771, is
104.26 	amended to read:
104.27 	69.771 VOLUNTEER FIREFIGHTERS' RELIEF ASSOCIATION
104.28 	FINANCING GUIDELINES ACT; APPLICATION.
104.29 		Subdivision 1.Covered relief associations. The
104.30 	applicable provisions of sections 69.771 to 69.776shall apply
104.31 	to any firefighters' relief association other than a relief
104.32 	association enumerated in section 69.77, subdivision 1a, which
104.33 	is organized under any laws of this state, which is composed of
104.34 	volunteer firefighters or is composed partially of volunteer
104.35 	firefighters and partially of salaried firefighters with
104.36 	retirement coverage provided by the public employees police and
105.1 	fire fund and which, in either case,operates subject to the
105.2 	service pension minimum requirements for entitlement and
105.3 	maximums contained in section 424A.02, or subject to a special
105.4 	law modifying those requirements or maximums.
105.5 		Subd. 2.Authorized employer support for a relief
105.6 	association. Notwithstanding any law to the contrary, a
105.7 	municipality may lawfully contribute public funds, including the
105.8 	transfer of any applicable fire state aid, or may levy property
105.9 	taxes for the support of a firefighters' relief association
105.10 	specified in subdivision 1, however organized, which provides
105.11 	retirement coverage or pays a service pension to retired
105.12 	firefighter or a retirement benefit to a disabled firefighter or
105.13 	a surviving dependent of either an active or retired firefighter
105.14 	for the operation and maintenance of the relief association only
105.15 	if the municipality and the relief association both comply with
105.16 	the applicable provisions of sections 69.771 to 69.776.
105.17 		Subd. 3.Remedy for noncompliance; determination.
 105.18 	Any (a) A municipality in which there exists a firefighters'
105.19 	relief association as specified in subdivision 1 which does not
105.20 	comply with the applicable provisions of sections 69.771 to
105.21 	69.776 or the provisions of any applicable special law relating
105.22 	to the funding or financing of the association shall does not
105.23 	qualify initially to receive, or be and is not entitled
105.24 	subsequently to retain, fire state aid pursuant to under 
105.25 	sections 69.011 to 69.051 until the reason for the 
105.26 	disqualification specified by the state auditor is remedied,
105.27 	whereupon the municipality or relief association, if otherwise
105.28 	qualified, shall be is entitled to again receive fire state aid
105.29 	for the year occurring immediately subsequent to the year in
105.30 	which the disqualification is remedied.
105.31 	(b) The state auditor shall determine if a municipality to
105.32 	which a firefighters' relief association is directly associated
105.33 	or a firefighters' relief association fails to comply with the
105.34 	provisions of sections 69.771 to 69.776 or the funding or
105.35 	financing provisions of any applicable special law based upon
105.36 	the information contained in the annual financial report of the
106.1 	firefighters' relief association required pursuant to under 
106.2 	section 69.051., the actuarial valuation of the relief
106.3 	association, if applicable, the relief association officers'
106.4 	financial requirements of the relief association and minimum
106.5 	municipal obligation determination documentation under section
106.6 	69.772, subdivisions 3 and 4; 69.773, subdivisions 4 and 5; or
106.7 	69.774, subdivision 2, if requested to be filed by the state
106.8 	auditor, the applicable municipal or nonprofit firefighting
106.9 	corporation budget, if requested to be filed by the state
106.10 	auditor, and any other relevant documents or reports obtained by
106.11 	the state auditor.
106.12 	(c) The municipality or nonprofit firefighting corporation
106.13 	and the associated relief association are not eligible to
106.14 	receive or to retain fire state aid if:
106.15 	(1) the relief association fails to prepare or to file the
106.16 	financial report or financial statement under section 69.051;
106.17 	(2) the relief association treasurer is not bonded in the
106.18 	manner and in the amount required by section 69.051, subdivision
106.19 	2;
106.20 	(3) the relief association officers fail to determine or
106.21 	improperly determine the accrued liability and the annual
106.22 	accruing liability of the relief association under section
106.23 	69.772, subdivisions 2, 2a, and 3, paragraph (c), clause (2), if
106.24 	applicable;
106.25 	(4) if applicable, the relief association officers fail to
106.26 	obtain and file a required actuarial valuation or the officers
106.27 	file an actuarial valuation that does not contain the special
106.28 	fund actuarial liability calculated under the entry age normal
106.29 	actuarial cost method, the special fund current assets, the
106.30 	special fund unfunded actuarial accrued liability, the special
106.31 	fund normal cost under the entry age normal actuarial cost
106.32 	method, the amortization requirement for the special fund
106.33 	unfunded actuarial accrued liability by the applicable target
106.34 	date, a summary of the applicable benefit plan, a summary of the
106.35 	membership of the relief association, a summary of the actuarial
106.36 	assumptions used in preparing the valuation, and a signed
107.1 	statement by the actuary attesting to its results and certifying
107.2 	to the qualifications of the actuary as an approved actuary
107.3 	under section 356.215, subdivision 1, paragraph (c);
107.4 	(5) the municipality failed to provide a municipal
107.5 	contribution, or the nonprofit firefighting corporation failed
107.6 	to provide a corporate contribution, in the amount equal to the
107.7 	minimum municipal obligation if the relief association is
107.8 	governed under section 69.772, or the amount necessary, when
107.9 	added to the fire state aid actually received in the plan year
107.10 	in question, to at least equal in total the calculated annual
107.11 	financial requirements of the special fund of the relief
107.12 	association if the relief association is governed under section
107.13 	69.773, and, if the municipal or corporate contribution is
107.14 	deficient, the municipality failed to include the minimum
107.15 	municipal obligation certified under section 69.772, subdivision
107.16 	3, or 69.773, subdivision 5, in its budget and tax levy or the
107.17 	nonprofit firefighting corporation failed to include the minimum
107.18 	corporate obligation certified under section 69.774, subdivision
107.19 	2, in the corporate budget;
107.20 	(6) the relief association did not receive municipal
107.21 	ratification for the most recent plan amendment when municipal
107.22 	ratification was required under section 69.772, subdivision 6;
107.23 	69.773, subdivision 6; or 424A.02, subdivision 10;
107.24 	(7) the relief association invested special fund assets in
107.25 	an investment security that is not authorized under section
107.26 	69.775;
107.27 	(8) the relief association had an administrative expense
107.28 	that is not authorized under section 69.80 or 424A.05,
107.29 	subdivision 3, or the municipality had an expenditure that is
107.30 	not authorized under section 424A.08;
107.31 	(9) the relief association officers fail to provide a
107.32 	complete and accurate public pension plan investment portfolio
107.33 	and performance disclosure under section 356.219;
107.34 	(10) the relief association fails to obtain the
107.35 	acknowledgment from a broker of the statement of investment
107.36 	restrictions under section 356A.06, subdivision 8b;
108.1 	(11) the relief association officers permitted to occur a
108.2 	prohibited transaction under section 356A.06, subdivision 9, or
108.3 	424A.001, subdivision 7, or failed to undertake correction of a
108.4 	prohibited transaction that did occur; or 
108.5 	(12) the relief association pays a defined benefit service
108.6 	pension in an amount that is in excess of the applicable service
108.7 	pension maximum under section 424A.02, subdivision 3.

108.8 	Sec. 4. Minnesota Statutes 2004, section 69.772,
108.9 	subdivision 3, is amended to read:
108.10 		Subd. 3.Financial requirements of relief association;
108.11 	minimum obligation of municipality. (a) During the month of
108.12 	July, the officers of the relief association shall determine the
108.13 	overall funding balance of the special fund for the current
108.14 	calendar year, the financial requirements of the special fund
108.15 	for the following calendar year and the minimum obligation of
108.16 	the municipality with respect to the special fund for the
108.17 	following calendar year in accordance with the requirements of
108.18 	this subdivision.
108.19 	(1) (b) The overall funding balance of the special fund for
108.20 	the current calendar year shall must be determined in the
108.21 	following manner:
108.22 	(a) (1) The total accrued liability of the special fund for
108.23 	all active and deferred members of the relief association as of
108.24 	December 31 of the current year shall must be calculated
108.25 	pursuant to under subdivisions 2 and 2a, if applicable.
108.26 	(b) (2) The total present assets of the special fund
108.27 	projected to December 31 of the current year, including receipts
108.28 	by and disbursements from the special fund anticipated to occur
108.29 	on or before December 31 shall , must be calculated.  To the
108.30 	extent possible, for those assets for which a market value is
108.31 	readily ascertainable, the current market value as of the date
108.32 	of the calculation for those assets shall must be utilized in
108.33 	making this calculation.  For any asset for which no market
108.34 	value is readily ascertainable, the cost value or the book
108.35 	value, whichever is applicable, shall must be utilized in making
108.36 	this calculation.
109.1 	(c) (3) The amount of the total present assets of the
109.2 	special fund calculated pursuant to under clause (b) shall (2)
109.3 	must be subtracted from the amount of the total accrued
109.4 	liability of the special fund calculated pursuant to under 
109.5 	clause (a) (1).  If the amount of total present assets exceeds
109.6 	the amount of the total accrued liability, then the special fund
109.7 	shall be is considered to have a surplus over full funding.  If
109.8 	the amount of the total present assets is less than the amount
109.9 	of the total accrued liability, then the special fund shall be 
109.10 	is considered to have a deficit from full funding.  If the
109.11 	amount of total present assets is equal to the amount of the
109.12 	total accrued liability, then the special fund shall be is 
109.13 	considered to be fully funded.
109.14 	(2) (c) The financial requirements of the special fund for
109.15 	the following calendar year shall must be determined in the
109.16 	following manner:
109.17 	(a) (1) The total accrued liability of the special fund for
109.18 	all active and deferred members of the relief association as of
109.19 	December 31 of the calendar year next following the current
109.20 	calendar year shall must be calculated pursuant to under 
109.21 	subdivisions 2 and 2a, if applicable.
109.22 	(b) (2) The increase in the total accrued liability of the
109.23 	special fund for the following calendar year over the total
109.24 	accrued liability of the special fund for the current year shall 
109.25 	must be calculated.
109.26 	(c) (3) The amount of anticipated future administrative
109.27 	expenses of the special fund shall must be calculated by
109.28 	multiplying the dollar amount of the administrative expenses of
109.29 	the special fund for the most recent prior calendar year by the
109.30 	factor of 1.035.
109.31 	(d) (4) If the special fund is fully funded, the financial
109.32 	requirement requirements of the special fund for the following
109.33 	calendar year shall be are the figure which represents the
109.34 	increase in the total accrued liability of the special fund as 
109.35 	amounts calculated pursuant to subclause (b) under clauses (2)
109.36 	and (3).
110.1 	(e) (5) If the special fund has a deficit from full
110.2 	funding, the financial requirements of the special fund for the
110.3 	following calendar year shall be are the financial requirements
110.4 	of the special fund calculated as though the special fund were
110.5 	fully funded pursuant to subclause (d) under clause (4) plus an
110.6 	amount equal to one-tenth of the original amount of the deficit
110.7 	from full funding of the special fund as determined pursuant to
110.8 	this section for the calendar year 1971 until that deficit from
110.9 	full funding is fully retired, and plus an amount equal to
110.10 	one-tenth of the increase in the deficit from full funding of
110.11 	the special fund under clause (2) resulting either from an
110.12 	increase in the amount of the service pension accruing after
110.13 	December 31, 1971 occurring in the last ten years or from a net
110.14 	annual investment loss occurring during the last ten years until
110.15 	each increase in the deficit from full funding is fully
110.16 	retired. The annual amortization contribution under this clause
110.17 	may not exceed the amount of the deficit from full funding.
110.18 	(f) (6) If the special fund has a surplus over full
110.19 	funding, the financial requirements of the special fund for the
110.20 	following calendar year shall be are the financial requirements
110.21 	of the special fund calculated as though the special fund were
110.22 	fully funded pursuant to subclause (d) under clause (4) reduced
110.23 	by an amount equal to one-tenth of the amount of the surplus
110.24 	over full funding of the special fund.
110.25 	(3) (d) The minimum obligation of the municipality with
110.26 	respect to the special fund shall be is the financial
110.27 	requirements of the special fund reduced by the amount of any
110.28 	fire state aid payable pursuant to under sections 69.011 to
110.29 	69.051 reasonably anticipated to be received by the municipality
110.30 	for transmittal to the special fund during the following
110.31 	calendar year, an amount of interest on the assets of the
110.32 	special fund projected to the beginning of the following
110.33 	calendar year calculated at the rate of five percent per annum,
110.34 	and the amount of any anticipated contributions to the special
110.35 	fund required by the relief association bylaws from the active 
110.36 	members of the relief association reasonably anticipated to be
111.1 	received during the following calendar year. A reasonable
111.2 	amount of anticipated fire state aid is an amount that does not
111.3 	exceed the fire state aid actually received in the prior year
111.4 	multiplied by the factor 1.035.

111.5 	Sec. 5. Minnesota Statutes 2004, section 69.772,
111.6 	subdivision 4, is amended to read:
111.7 		Subd. 4.Certification of financial requirements and
111.8 	minimum municipal obligation; levy. (a) The officers of the
111.9 	relief association shall certify the financial requirements of
111.10 	the special fund of the relief association and the minimum
111.11 	obligation of the municipality with respect to the special fund
111.12 	of the relief association as determined pursuant to under 
111.13 	subdivision 3 to the governing body of the municipality on or
111.14 	before August 1 of each year. The financial requirements of the
111.15 	relief association and the minimum municipal obligation must be
111.16 	included in the financial report or financial statement under
111.17 	section 69.051.
111.18 	(b) The municipality shall provide for at least the minimum
111.19 	obligation of the municipality with respect to the special fund
111.20 	of the relief association by tax levy or from any other source
111.21 	of public revenue.
111.22 	(c) The municipality may levy taxes for the payment of the
111.23 	minimum municipal obligation without any limitation as to rate
111.24 	or amount and irrespective of any limitations imposed by other
111.25 	provisions of law upon the rate or amount of taxation until the
111.26 	balance of the special fund or any fund of the relief
111.27 	association has attained a specified level.  In addition, any
111.28 	taxes levied pursuant to under this section shall must not cause
111.29 	the amount or rate of any other taxes levied in that year or to
111.30 	be levied in a subsequent year by the municipality which are
111.31 	subject to a limitation as to rate or amount to be reduced.
111.32 	(d) If the municipality does not include the full amount of
111.33 	the minimum municipal obligations in its levy for any year, the
111.34 	officers of the relief association shall certify that amount to
111.35 	the county auditor, who shall spread a levy in the amount of the
111.36 	certified minimum municipal obligation on the taxable property
112.1 	of the municipality.
112.2 	(e) If the state auditor determines that a municipal
112.3 	contribution actually made in a plan year was insufficient under
112.4 	section 69.771, subdivision 3, paragraph (c), clause (5), the
112.5 	state auditor may request a copy of the certifications under
112.6 	this subdivision from the relief association or from the city.
112.7 	The relief association or the city, whichever applies, must
112.8 	provide the certifications within 14 days of the date of the
112.9 	request from the state auditor.

112.10 	Sec. 6. Minnesota Statutes 2004, section 69.773,
112.11 	subdivision 4, is amended to read:
112.12 		Subd. 4.Financial requirements of special fund. Prior
112.13 	to (a) On or before August 1 of each year, the officers of the
112.14 	relief association shall determine the financial requirements of
112.15 	the special fund of the relief association in accordance with
112.16 	the requirements of this subdivision.
112.17 	(b) The financial requirements of the relief
112.18 	association shall must be based on the most recent actuarial
112.19 	valuation of the special fund prepared in accordance with
112.20 	subdivision 2.  If the relief association has an unfunded
112.21 	actuarial accrued liability as reported in the most recent
112.22 	actuarial valuation, the financial requirements shall must be
112.23 	determined by adding the figures calculated pursuant to under
112.24 	paragraph (d),clauses (a) (1), (b) (2), and (c) (3).  If
112.25 	the relief association does not have an unfunded actuarial
112.26 	accrued liability as reported in the most recent actuarial
112.27 	valuation, the financial requirements shall must be an amount
112.28 	equal to the figure calculated pursuant to under paragraph (d),
112.29 	clauses (a) (1) and (b) (2), reduced by an amount equal to
112.30 	one-tenth of the amount of any assets in excess of the actuarial
112.31 	accrued liability of the relief association.
112.32 	(c) The determination of whether or not the relief
112.33 	association has an unfunded actuarial accrued liability
112.34 	shall must be based on the current market value of assets for
112.35 	which a market value is readily ascertainable and the cost or
112.36 	book value, whichever is applicable, for assets for which no
113.1 	market value is readily ascertainable.
113.2 	(a) (d) The components of the financial requirements of the
113.3 	relief association are the following:
113.4 	(1) The normal level cost requirement for the following
113.5 	year, expressed as a dollar amount, shall be is the figure for
113.6 	the normal level cost of the relief association as reported in
113.7 	the actuarial valuation.
113.8 	(b) (2) The amount of anticipated future administrative
113.9 	expenses of the special fund shall must be calculated by
113.10 	multiplying the dollar amount of the administrative expenses of
113.11 	the special fund for the most recent prior calendar year by the
113.12 	factor of 1.035.
113.13 	(c) (3) The amortization contribution requirement to retire
113.14 	the current unfunded actuarial accrued liability by the
113.15 	established date for full funding shall be is the figure for the
113.16 	amortization contribution as reported in the actuarial
113.17 	valuation.  If there has not been a change in the actuarial
113.18 	assumptions used for calculating the actuarial accrued liability
113.19 	of the special fund, a change in the bylaws of the relief
113.20 	association governing the service pensions, retirement benefits,
113.21 	or both,payable from the special fund,or a change in the
113.22 	actuarial cost method used to value all or a portion of the
113.23 	special fund which change or changes, which by themselves,
113.24 	without inclusion of any other items of increase or decrease,
113.25 	produce a net increase in the unfunded actuarial accrued
113.26 	liability of the special fund since December 31, 1970, the
113.27 	established date for full funding shall be is the December 31,
113.28 	1990 occurring ten years later.  If there has been a change in
113.29 	the actuarial assumptions used for calculating the actuarial
113.30 	accrued liability of the special fund, a change in the bylaws of
113.31 	the relief association governing the service pensions,
113.32 	retirement benefits, or both payable from the special fund or a
113.33 	change in the actuarial cost method used to value all or a
113.34 	portion of the special fund and the change or changes, by
113.35 	themselves and without inclusion of any other items of increase
113.36 	or decrease, produce a net increase in the unfunded actuarial
114.1 	accrued liability of the special fund since December 31, 1970,
114.2 	but prior to January 1, 1979 within the past 20 years, the
114.3 	established date for full funding shall be December 31, 1998,
114.4 	and if there has been a change since December 31, 1978, the
114.5 	established date for full funding shall must be determined using
114.6 	the following procedure:
114.7 	(i) the unfunded actuarial accrued liability of the special
114.8 	fund attributable to experience losses that have occurred since
114.9 	the most recent prior actuarial valuation must be determined and
114.10 	the level annual dollar contribution needed to amortize the
114.11 	experience loss over a period of ten years ending on the
114.12 	December 31 occurring ten years later must be calculated;
114.13 	(ii) the unfunded actuarial accrued liability of the
114.14 	special fund shall must be determined in accordance with the
114.15 	provisions governing service pensions, retirement benefits, and
114.16 	actuarial assumptions in effect before an applicable change;
114.17 	(ii) (iii) the level annual dollar contribution needed to
114.18 	amortize this unfunded actuarial accrued liability amount by the
114.19 	date for full funding in effect prior to before the change shall 
114.20 	must be calculated using the interest assumption specified in
114.21 	section 356.215, subdivision 8, in effect before any applicable
114.22 	change;
114.23 	(iii) (iv) the unfunded actuarial accrued liability of the
114.24 	special fund shall must be determined in accordance with any new
114.25 	provisions governing service pensions, retirement benefits, and
114.26 	actuarial assumptions and the remaining provisions governing
114.27 	service pensions, retirement benefits, and actuarial assumptions
114.28 	in effect before an applicable change;
114.29 	(iv) (v) the level annual dollar contribution needed to
114.30 	amortize the difference between the unfunded actuarial accrued
114.31 	liability amount calculated pursuant to subclause (i) under item
114.32 	(ii) and the unfunded actuarial accrued liability amount
114.33 	calculated pursuant to subclause (iii) under item (iv) over a
114.34 	period of 20 years starting December 31 of the year in which the
114.35 	change is effective shall must be calculated using the interest
114.36 	assumption specified in section 356.215, subdivision 8, in
115.1 	effect after any applicable change;
115.2 	(v) (vi) the annual amortization contribution calculated
115.3 	pursuant to subclause (iv) shall under item (v) must be added to
115.4 	the annual amortization contribution calculated pursuant to
115.5 	subclause (ii) under items (i) and (iii);
115.6 	(vi) (vii) the period in which the unfunded actuarial
115.7 	accrued liability amount determined in subclause (iii) item (iv) 
115.8 	will be amortized by the total annual amortization contribution
115.9 	computed pursuant to subclause (v) shall under item (vi) must be
115.10 	calculated using the interest assumption specified in section
115.11 	356.215, subdivision 8, in effect after any applicable change,
115.12 	rounded to the nearest integral number of years, but which shall 
115.13 	must not exceed a period of 20 years from the end of the year in
115.14 	which the determination of the date for full funding using this
115.15 	procedure is made and which shall must not be less than the
115.16 	period of years beginning in the year in which the determination
115.17 	of the date for full funding using this procedure is made and
115.18 	ending by the date for full funding in effect before the change;
115.19 	(vii) (viii) the period determined pursuant to subclause
115.20 	(vi) shall under item (vii) must be added to the date as of
115.21 	which the actuarial valuation was prepared and the resulting
115.22 	date shall be is the new date for full funding.

115.23 	Sec. 7. Minnesota Statutes 2004, section 69.773,
115.24 	subdivision 5, is amended to read:
115.25 		Subd. 5.Minimum municipal obligation. (a) The officers
115.26 	of the relief association shall determine the minimum obligation
115.27 	of the municipality with respect to the special fund of the
115.28 	relief association for the following calendar year prior to on
115.29 	or before August 1 of each year in accordance with the
115.30 	requirements of this subdivision.
115.31 	(b) The minimum obligation of the municipality with respect
115.32 	to the special fund shall be is an amount equal to the financial
115.33 	requirements of the special fund of the relief association
115.34 	determined pursuant to under subdivision 4, reduced by the
115.35 	estimated amount of any fire state aid payable pursuant to under 
115.36 	sections 69.011 to 69.051reasonably anticipated to be received
116.1 	by the municipality for transmittal to the special fund of the
116.2 	relief association during the following year and the amount of
116.3 	any anticipated contributions to the special fund required by
116.4 	the relief association bylaws from the active members of the
116.5 	relief association reasonably anticipated to be received during
116.6 	the following calendar year. A reasonable amount of anticipated
116.7 	fire state aid is an amount that does not exceed the fire state
116.8 	aid actually received in the prior year multiplied by the factor
116.9 	1.035.
116.10 	(c) The officers of the relief association shall certify
116.11 	the financial requirements of the special fund of the relief
116.12 	association and the minimum obligation of the municipality with
116.13 	respect to the special fund of the relief association as
116.14 	determined pursuant to under subdivision 4 and this subdivision
116.15 	to the governing body of the municipality by August 1 of each
116.16 	year. The financial requirements of the relief association and
116.17 	the minimum municipal obligation must be included in the
116.18 	financial report or financial statement under section 69.051.
116.19 	(d) The municipality shall provide for at least the minimum
116.20 	obligation of the municipality with respect to the special fund
116.21 	of the relief association by tax levy or from any other source
116.22 	of public revenue.  The municipality may levy taxes for the
116.23 	payment of the minimum municipal obligation without any
116.24 	limitation as to rate or amount and irrespective of any
116.25 	limitations imposed by other provisions of law or charter upon
116.26 	the rate or amount of taxation until the balance of the special
116.27 	fund or any fund of the relief association has attained a
116.28 	specified level.  In addition, any taxes levied pursuant to 
116.29 	under this section shall must not cause the amount or rate of
116.30 	any other taxes levied in that year or to be levied in a
116.31 	subsequent year by the municipality which are subject to a
116.32 	limitation as to rate or amount to be reduced.
116.33 	(e) If the municipality does not include the full amount of
116.34 	the minimum municipal obligation in its levy for any year, the
116.35 	officers of the relief association shall certify that amount to
116.36 	the county auditor, who shall spread a levy in the amount of the
117.1 	minimum municipal obligation on the taxable property of the
117.2 	municipality.
117.3 	(f) If the state auditor determines that a municipal
117.4 	contribution actually made in a plan year was insufficient under
117.5 	section 69.771, subdivision 3, paragraph (c), clause (5), the
117.6 	state auditor may request from the relief association or from
117.7 	the city a copy of the certifications under this subdivision.
117.8 	The relief association or the city, whichever applies, must
117.9 	provide the certifications within 14 days of the date of the
117.10 	request from the state auditor.

117.11 	Sec. 8. Minnesota Statutes 2004, section 69.775, is
117.12 	amended to read:
117.13 	69.775 INVESTMENTS.
117.14 	(a) The special fund assets of the a relief associations 
117.15 	association governed by sections 69.771 to 69.776 must be
117.16 	invested in securities that are authorized investments under
117.17 	section 356A.06, subdivision 6 or 7.
117.18 	(b) Notwithstanding the foregoing, up to 75 percent of the
117.19 	market value of the assets of the special fund, not including
117.20 	any money market mutual funds,may be invested in open-end
117.21 	investment companies registered under the federal Investment
117.22 	Company Act of 1940, if the portfolio investments of the
117.23 	investment companies comply with the type of securities
117.24 	authorized for investment under section 356A.06, subdivision 7.
117.25 	(c) Securities held by the associations before June 2,
117.26 	1989, that do not meet the requirements of this section may be
117.27 	retained after that date if they were proper investments for the
117.28 	association on that date.
117.29 	(d) The governing board of the association may select and
117.30 	appoint investment agencies to act for and in its behalf or may
117.31 	certify special fund assets for investment by the State Board of
117.32 	Investment under section 11A.17.
117.33 	(e) The governing board of the association may certify
117.34 	general fund assets of the relief association for investment by
117.35 	the State Board of Investment in fixed income pools or in a
117.36 	separately managed account at the discretion of the State Board
118.1 	of Investment as provided in section 11A.14.
118.2 	(f) The governing board of the association may select and
118.3 	appoint a qualified private firm to measure management
118.4 	performance and return on investment, and the firm shall use the
118.5 	formula or formulas developed by the state board under section
118.6 	11A.04, clause (11).

118.7 	Sec. 9. Minnesota Statutes 2004, section 356A.06,
118.8 	subdivision 7, is amended to read:
118.9 		Subd. 7.Expanded list of authorized investment
118.10 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
118.11 	authorized by law or bylaws, a covered pension plan not
118.12 	described by subdivision 6, paragraph (a), may invest its assets
118.13 	only in accordance with this subdivision.
118.14 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
118.15 	the authority to purchase, sell, lend, or exchange the
118.16 	securities specified in paragraphs (c) to (g) (h), including
118.17 	puts and call options and future contracts traded on a contract
118.18 	market regulated by a governmental agency or by a financial
118.19 	institution regulated by a governmental agency.  These
118.20 	securities may be owned as units in commingled trusts that own
118.21 	the securities described in paragraphs (c) to (g) (h).
118.22 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
118.23 	invest funds in governmental bonds, notes, bills, mortgages, and
118.24 	other evidences of indebtedness provided the issue is backed by
118.25 	the full faith and credit of the issuer or the issue is rated
118.26 	among the top four quality rating categories by a nationally
118.27 	recognized rating agency.  The obligations in which funds may be
118.28 	invested under this paragraph include guaranteed or insured
118.29 	issues of (1) the United States, its agencies, its
118.30 	instrumentalities, or organizations created and regulated by an
118.31 	act of Congress; (2) Canada and its provinces, provided the
118.32 	principal and interest is payable in United States dollars; (3)
118.33 	the states and their municipalities, political subdivisions,
118.34 	agencies, or instrumentalities; (4) the International Bank for
118.35 	Reconstruction and Development, the Inter-American Development
118.36 	Bank, the Asian Development Bank, the African Development Bank,
119.1 	or any other United States government sponsored organization of
119.2 	which the United States is a member, provided the principal and
119.3 	interest is payable in United States dollars.
119.4 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
119.5 	invest funds in bonds, notes, debentures, transportation
119.6 	equipment obligations, or any other longer term evidences of
119.7 	indebtedness issued or guaranteed by a corporation organized
119.8 	under the laws of the United States or any state thereof, or the
119.9 	Dominion of Canada or any province thereof if they conform to
119.10 	the following provisions:
119.11 	(1) the principal and interest of obligations of
119.12 	corporations incorporated or organized under the laws of the
119.13 	Dominion of Canada or any province thereof must be payable in
119.14 	United States dollars; and
119.15 	(2) obligations must be rated among the top four quality
119.16 	categories by a nationally recognized rating agency.
119.17 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
119.18 	invest funds in bankers acceptances, certificates of deposit,
119.19 	deposit notes, commercial paper, mortgage participation
119.20 	certificates and pools, asset backed securities, repurchase
119.21 	agreements and reverse repurchase agreements, guaranteed
119.22 	investment contracts, savings accounts, and guaranty fund
119.23 	certificates, surplus notes, or debentures of domestic mutual
119.24 	insurance companies if they conform to the following provisions:
119.25 	(i) bankers acceptances and deposit notes of United States
119.26 	banks are limited to those issued by banks rated in the highest
119.27 	four quality categories by a nationally recognized rating
119.28 	agency;
119.29 	(ii) certificates of deposit are limited to those issued by
119.30 	(A) United States banks and savings institutions that are rated
119.31 	in the highest four quality categories by a nationally
119.32 	recognized rating agency or whose certificates of deposit are
119.33 	fully insured by federal agencies; or (B) credit unions in
119.34 	amounts up to the limit of insurance coverage provided by the
119.35 	National Credit Union Administration;
119.36 	(iii) commercial paper is limited to those issued by United
120.1 	States corporations or their Canadian subsidiaries and rated in
120.2 	the highest two quality categories by a nationally recognized
120.3 	rating agency;
120.4 	(iv) mortgage participation or pass through certificates
120.5 	evidencing interests in pools of first mortgages or trust deeds
120.6 	on improved real estate located in the United States where the
120.7 	loan to value ratio for each loan as calculated in accordance
120.8 	with section 61A.28, subdivision 3, does not exceed 80 percent
120.9 	for fully amortizable residential properties and in all other
120.10 	respects meets the requirements of section 61A.28, subdivision
120.11 	3;
120.12 	(v) collateral for repurchase agreements and reverse
120.13 	repurchase agreements is limited to letters of credit and
120.14 	securities authorized in this section;
120.15 	(vi) guaranteed investment contracts are limited to those
120.16 	issued by insurance companies or banks rated in the top four
120.17 	quality categories by a nationally recognized rating agency or
120.18 	to alternative guaranteed investment contracts where the
120.19 	underlying assets comply with the requirements of this
120.20 	subdivision;
120.21 	(vii) savings accounts are limited to those fully insured
120.22 	by federal agencies; and
120.23 	(viii) asset backed securities must be rated in the top
120.24 	four quality categories by a nationally recognized rating agency.
120.25 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
120.26 	not apply to certificates of deposit and collateralization
120.27 	agreements executed by the covered pension plan under clause
120.28 	(1), item (ii).
120.29 	(3) In addition to investments authorized by clause (1),
120.30 	item (iv), the covered pension plan may purchase from the
120.31 	Minnesota Housing Finance Agency all or any part of a pool of
120.32 	residential mortgages, not in default, that has previously been
120.33 	financed by the issuance of bonds or notes of the agency.  The
120.34 	covered pension plan may also enter into a commitment with the
120.35 	agency, at the time of any issue of bonds or notes, to purchase
120.36 	at a specified future date, not exceeding 12 years from the date
121.1 	of the issue, the amount of mortgage loans then outstanding and
121.2 	not in default that have been made or purchased from the
121.3 	proceeds of the bonds or notes.  The covered pension plan may
121.4 	charge reasonable fees for any such commitment and may agree to
121.5 	purchase the mortgage loans at a price sufficient to produce a
121.6 	yield to the covered pension plan comparable, in its judgment,
121.7 	to the yield available on similar mortgage loans at the date of
121.8 	the bonds or notes.  The covered pension plan may also enter
121.9 	into agreements with the agency for the investment of any
121.10 	portion of the funds of the agency.  The agreement must cover
121.11 	the period of the investment, withdrawal privileges, and any
121.12 	guaranteed rate of return.
121.13 	(f)  [CORPORATE STOCKS.] The covered pension plan may
121.14 	invest funds in stocks or convertible issues of any corporation
121.15 	organized under the laws of the United States or the states
121.16 	thereof, any corporation organized under the laws of the
121.17 	Dominion of Canada or its provinces, or any corporation listed
121.18 	on the New York Stock Exchange or the American Stock Exchange an
121.19 	exchange regulated by an agency of the United States or of the
121.20 	Canadian national government, if they conform to the following
121.21 	provisions:
121.22 	(1) the aggregate value of corporate stock investments, as
121.23 	adjusted for realized profits and losses, must not exceed 85
121.24 	percent of the market or book value, whichever is less, of a
121.25 	fund, less the aggregate value of investments according to
121.26 	subdivision 6 paragraph (h);
121.27 	(2) investments must not exceed five percent of the total
121.28 	outstanding shares of any one corporation.
121.29 	(g)  [EXCHANGE TRADED FUNDS.] The covered pension plan may
121.30 	invest funds in exchange traded funds, subject to the maximums,
121.31 	the requirements, and the limitations set forth in paragraph
121.32 	(d), (e), (f), or (h), whichever applies.
121.33 	(h) [OTHER INVESTMENTS.] (1) In addition to the
121.34 	investments authorized in paragraphs (b) to (f) (g), and subject
121.35 	to the provisions in clause (2), the covered pension plan may
121.36 	invest funds in:
122.1 	(i) venture capital investment businesses through
122.2 	participation in limited partnerships and corporations;
122.3 	(ii) real estate ownership interests or loans secured by
122.4 	mortgages or deeds of trust through investment in limited
122.5 	partnerships, bank sponsored collective funds, trusts, and
122.6 	insurance company commingled accounts, including separate
122.7 	accounts;
122.8 	(iii) regional and mutual funds through bank sponsored
122.9 	collective funds and open-end investment companies registered
122.10 	under the Federal Investment Company Act of 1940;
122.11 	(iv) resource investments through limited partnerships,
122.12 	private placements, and corporations; and
122.13 	(v) international securities.
122.14 	(2) The investments authorized in clause (1) must conform
122.15 	to the following provisions:
122.16 	(i) the aggregate value of all investments made according
122.17 	to clause (1) may not exceed 35 percent of the market value of
122.18 	the fund for which the covered pension plan is investing;
122.19 	(ii) there must be at least four unrelated owners of the
122.20 	investment other than the state board covered pension plan for
122.21 	investments made under clause (1), item (i), (ii), (iii), or
122.22 	(iv);
122.23 	(iii) covered pension plan participation in an investment
122.24 	vehicle is limited to 20 percent thereof for investments made
122.25 	under clause (1), item (i), (ii), (iii), or (iv); and
122.26 	(iv) covered pension plan participation in a limited
122.27 	partnership does not include a general partnership interest or
122.28 	other interest involving general liability.  The covered pension
122.29 	plan may not engage in any activity as a limited partner which
122.30 	creates general liability.

122.31 	Sec. 10. Minnesota Statutes 2004, section 424A.02,
122.32 	subdivision 3, is amended to read:
122.33 		Subd. 3.Flexible service pension maximums.  (a) Annually
122.34 	on or before August 1 as part of the certification of the
122.35 	financial requirements and minimum municipal obligation
122.36 	determined under section 69.772, subdivision 4, or 69.773,
123.1 	subdivision 5, as applicable, the secretary or some other
123.2 	official of the relief association designated in the bylaws of
123.3 	each relief association shall calculate and certify to the
123.4 	governing body of the applicable qualified municipality the
123.5 	average amount of available financing per active covered
123.6 	firefighter for the most recent three-year period.  The amount
123.7 	of available financing shall include any amounts of fire state
123.8 	aid received or receivable by the relief association, any
123.9 	amounts of municipal contributions to the relief association
123.10 	raised from levies on real estate or from other available
123.11 	revenue sources exclusive of fire state aid, and one-tenth of
123.12 	the amount of assets in excess of the accrued liabilities of the
123.13 	relief association calculated under section 69.772, subdivision
123.14 	2; 69.773, subdivisions 2 and 4; or 69.774, subdivision 2, if
123.15 	any.
123.16 	(b) The maximum service pension which the relief
123.17 	association has authority to provide for in its bylaws for
123.18 	payment to a member retiring after the calculation date when the
123.19 	minimum age and service requirements specified in subdivision 1
123.20 	are met must be determined using the table in paragraph (c) or
123.21 	(d), whichever applies.
123.22 	(c) For a relief association where the governing bylaws
123.23 	provide for a monthly service pension to a retiring member, the
123.24 	maximum monthly service pension amount per month for each year
123.25 	of service credited that may be provided for in the bylaws is
123.26 	the greater of the service pension amount provided for in the
123.27 	bylaws on the date of the calculation of the average amount of
123.28 	the available financing per active covered firefighter or the 
123.29 	maximum service pension figure corresponding to the average
123.30 	amount of available financing per active covered firefighter:
123.31 	Minimum Average Amount of      Maximum Service Pension
123.32 	  Available Financing per        Amount Payable per Month
123.33 	       Firefighter               for Each Year of Service
123.34 	$...                            $  .25
123.35 	42 41.50
123.36 	84 81 1.00
124.1 	126 122 1.50
124.2 	168 162 2.00
124.3 	209 203 2.50
124.4 	252 243 3.00
124.5 	294 284 3.50
124.6 	335 324 4.00
124.7 	378 365 4.50
124.8 	420 405 5.00
124.9 	503 486 6.00
124.10 	587 567 7.00
124.11 	672 648 8.00
124.12 	755 729 9.00
124.13 	839 810 10.00
124.14 	923 891 11.00
124.15 	1007 972 12.00
124.16 	1090 1053 13.00
124.17 	1175 1134 14.00
124.18 	1259 1215 15.00
124.19 	1342 1296 16.00
124.20 	1427 1377 17.00
124.21 	1510 1458 18.00
124.22 	1594 1539 19.00
124.23 	1677 1620 20.00
124.24 	1762 1701 21.00
124.25 	1845 1782 22.00
124.26 	1888 1823 22.50
124.27 	1929 1863 23.00
124.28 	2014 1944 24.00
124.29 	2098 2025 25.00
124.30 	2183 2106 26.00
124.31 	2267 2187 27.00
124.32 	2351 2268 28.00
124.33 	2436 2349 29.00
124.34 	2520 2430 30.00
124.35 	2604 2511 31.00
124.36 	2689 2592 32.00
125.1 	2773 2673 33.00
125.2 	2857 2754 34.00
125.3 	2942 2834 35.00
125.4 	3026 2916 36.00
125.5 	3110 2997 37.00
125.6 	3194 3078 38.00
125.7 	3278 3159 39.00
125.8 	3362 3240 40.00
125.9 	3446 3321 41.00
125.10 	3530 3402 42.00
125.11 	3614 3483 43.00
125.12 	3698 3564 44.00
125.13 	3782 3645 45.00
125.14 	3866 3726 46.00
125.15 	3950 3807 47.00
125.16 	4034 3888 48.00
125.17 	4118 3969 49.00
125.18 	4202 4050 50.00
125.19 	4286 4131 51.00
125.20 	4370 4212 52.00
125.21 	Effective beginning December 31, 2003:
125.22 	4454 4293 53.00
125.23 	4538 4374 54.00
125.24 	4622 4455 55.00
125.25 	4706 4536 56.00
125.26 	(d) For a relief association in which the governing bylaws
125.27 	provide for a lump sum service pension to a retiring member, the
125.28 	maximum lump sum service pension amount for each year of service
125.29 	credited that may be provided for in the bylaws is the greater
125.30 	of the service pension amount provided for in the bylaws on the
125.31 	date of the calculation of the average amount of the available
125.32 	financing per active covered firefighter or the maximum service
125.33 	pension figure corresponding to the average amount of available
125.34 	financing per active covered firefighter for the applicable
125.35 	specified period:
125.36 	Minimum Average Amount         Maximum Lump Sum Service
126.1 	 of Available Financing         Pension Amount Payable
126.2 	    per Firefighter             for Each Year of Service
126.3 	$..                              $10
126.4 	         11                               20
126.5 	         16                               30
126.6 	         23                               40
126.7 	         27                               50
126.8 	         32                               60
126.9 	         43                               80
126.10 	         54                              100
126.11 	         65                              120
126.12 	         77                              140
126.13 	         86                              160
126.14 	         97                              180
126.15 	        108                              200
126.16 	        131                              240
126.17 	        151                              280
126.18 	        173                              320
126.19 	        194                              360
126.20 	        216                              400
126.21 	        239                              440
126.22 	        259                              480
126.23 	        281                              520
126.24 	        302                              560
126.25 	        324                              600
126.26 	        347                              640
126.27 	        367                              680
126.28 	        389                              720
126.29 	        410                              760
126.30 	        432                              800
126.31 	        486                              900
126.32 	        540                             1000
126.33 	        594                             1100
126.34 	        648                             1200
126.35 	        702                             1300
126.36 	        756                             1400
127.1 	        810                             1500
127.2 	        864                             1600
127.3 	        918                             1700
127.4 	        972                             1800
127.5 	       1026                             1900
127.6 	       1080                             2000
127.7 	       1134                             2100
127.8 	       1188                             2200
127.9 	       1242                             2300
127.10 	       1296                             2400
127.11 	       1350                             2500
127.12 	       1404                             2600
127.13 	       1458                             2700
127.14 	       1512                             2800
127.15 	       1566                             2900
127.16 	       1620                             3000
127.17 	       1672                             3100
127.18 	       1726                             3200
127.19 	       1753                             3250
127.20 	       1780                             3300
127.21 	       1820                             3375
127.22 	1834                             3400
127.23 	       1888                             3500
127.24 	1942                             3600
127.25 	       1996                             3700
127.26 	       2023                             3750
127.27 	2050                             3800
127.28 	       2104                             3900
127.29 	       2158                             4000
127.30 	2212                             4100
127.31 	       2265                             4200
127.32 	       2319                             4300
127.33 	       2373                             4400
127.34 	       2427                             4500
127.35 	       2481                             4600
127.36 	       2535                             4700
128.1 	       2589                             4800
128.2 	       2643                             4900
128.3 	       2697                             5000
128.4 	       2751                             5100
128.5 	       2805                             5200
128.6 	       2859                             5300
128.7 	       2913                             5400
128.8 	       2967                             5500
128.9 	3021                             5600
128.10 	3075                             5700
128.11 	3129                             5800
128.12 	3183                             5900
128.13 	3237                             6000
128.14 	3291                             6100
128.15 	3345                             6200
128.16 	3399                             6300
128.17 	3453                             6400
128.18 	3507                             6500
128.19 	3561                             6600
128.20 	3615                             6700
128.21 	3669                             6800
128.22 	3723                             6900
128.23 	3777                             7000
128.24 	Effective beginning December 31, 2003:
128.25 	3831                             7100
128.26 	3885                             7200
128.27 	3939                             7300
128.28 	3993                             7400
128.29 	4047                             7500
128.30 	(e) For a relief association in which the governing bylaws
128.31 	provide for a monthly benefit service pension as an alternative
128.32 	form of service pension payment to a lump sum service pension,
128.33 	the maximum service pension amount for each pension payment type
128.34 	must be determined using the applicable table contained in this
128.35 	subdivision.
128.36 	(f) If a relief association establishes a service pension
129.1 	in compliance with the applicable maximum contained in paragraph
129.2 	(c) or (d) and the minimum average amount of available financing
129.3 	per active covered firefighter is subsequently reduced because
129.4 	of a reduction in fire state aid or because of an increase in
129.5 	the number of active firefighters, the relief association may
129.6 	continue to provide the prior service pension amount specified
129.7 	in its bylaws, but may not increase the service pension amount
129.8 	until the minimum average amount of available financing per
129.9 	firefighter under the table in paragraph (c) or (d), whichever
129.10 	applies, permits.
129.11 	(g) No relief association is authorized to provide a
129.12 	service pension in an amount greater than the largest applicable
129.13 	flexible service pension maximum amount even if the amount of
129.14 	available financing per firefighter is greater than the
129.15 	financing amount associated with the largest applicable flexible
129.16 	service pension maximum.

129.17 	Sec. 11. Minnesota Statutes 2004, section 424A.02,
129.18 	subdivision 4, is amended to read:
129.19 		Subd. 4.Defined contribution lump sum service
129.20 	pensions. (a) If the bylaws governing the relief association so
129.21 	provide exclusively, the relief association may pay a defined
129.22 	contribution lump sum service pension in lieu of any defined
129.23 	benefit service pension governed by subdivision 2.
129.24 	(b) An individual account for each firefighter who is a
129.25 	member of the relief association shall must be established.  To
129.26 	each individual active member account shall must be credited a
129.27 	right to an equal share of: (a) (1) any amounts of fire state
129.28 	aid received by the relief association; (b) (2) any amounts of
129.29 	municipal contributions to the relief association raised from
129.30 	levies on real estate or from other available revenue sources
129.31 	exclusive of fire state aid; and (c) (3) any amounts equal to
129.32 	the share of the assets of the special fund to the credit
129.33 	of: (1) (i) any former member who terminated active service
129.34 	with the fire department to which the relief association is
129.35 	associated prior to before meeting the minimum service
129.36 	requirement provided for in subdivision 1 and has not returned
130.1 	to active service with the fire department for a period no
130.2 	shorter than five years; or (2) (ii) any retired member who
130.3 	retired prior to before obtaining a full nonforfeitable interest
130.4 	in the amounts credited to the individual member
130.5 	account pursuant to under subdivision 2 and any applicable
130.6 	provision of the bylaws of the relief association.  In addition,
130.7 	any interest or investment income earned return on the assets of
130.8 	the special fund shall must be credited in proportion to the
130.9 	share of the assets of the special fund to the credit of each
130.10 	individual active member account through the date on which the
130.11 	investment return is recognized by and credited to the special
130.12 	fund.
130.13 	(c) At the time of retirement pursuant to under subdivision
130.14 	1 and any applicable provision of the bylaws of the relief
130.15 	association, a retiring member shall be is entitled to that
130.16 	portion of the assets of the special fund to the credit of the
130.17 	member in the individual member account which is
130.18 	nonforfeitable pursuant to under subdivision 2 and any
130.19 	applicable provision of the bylaws of the relief association
130.20 	based on the number of years of service to the credit of the
130.21 	retiring member.

130.22 	Sec. 12. Minnesota Statutes 2004, section 424A.02,
130.23 	subdivision 7, is amended to read:
130.24 		Subd. 7.Deferred service pensions.  (a) A member of a
130.25 	relief association to which this section applies is entitled to
130.26 	a deferred service pension if the member:
130.27 	(1) has completed the lesser of the minimum period of
130.28 	active service with the fire department specified in the bylaws
130.29 	or 20 years of active service with the fire department;
130.30 	(2) has completed at least five years of active membership
130.31 	in the relief association; and
130.32 	(3) separates from active service and membership before
130.33 	reaching age 50 or the minimum age for retirement and
130.34 	commencement of a service pension specified in the bylaws
130.35 	governing the relief association if that age is greater than age
130.36 	50.
131.1 	(b) The deferred service pension starts is payable when the
131.2 	former member reaches age 50,or the minimum age specified in
131.3 	the bylaws governing the relief association if that age is
131.4 	greater than age 50,and when the former member makes a valid
131.5 	written application.
131.6 	(c) A relief association that provides a lump sum service
131.7 	pension governed by subdivision 3 may, when its governing bylaws
131.8 	so provide, pay interest on the deferred lump sum service
131.9 	pension during the period of deferral.  If provided for in the
131.10 	bylaws, interest must be paid in one of the following manners:
131.11 	(1) at the investment performance rate actually earned on
131.12 	that portion of the assets if the deferred benefit amount is
131.13 	invested by the relief association in a separate account
131.14 	established and maintained by the relief association or if the
131.15 	deferred benefit amount is invested in a separate investment
131.16 	vehicle held by the relief association;
131.17 	(2) at the an interest rate of up to five percent,
131.18 	compounded annually, as set by the board of directors and
131.19 	approved as provided in subdivision 10; or
131.20 	(3) at a rate equal to the actual time weighted total rate
131.21 	of return investment performance of the special fund as reported
131.22 	by the Office of the State Auditor under section 356.219, up to
131.23 	five percent, compounded annually, and applied consistently for
131.24 	all deferred service pensioners.
131.25 	(d) A relief association may not use the method provided
131.26 	for in paragraph (c),clause (3), until it has modified its
131.27 	bylaws to be consistent with that clause.
131.28 	(d) Interest under paragraph (c), clause (2) or (3), is
131.29 	payable from the first day of the month next following the date
131.30 	on which the municipality has approved the deferred service
131.31 	pension interest rate established by the board of trustees or
131.32 	from the first day of the month next following the date on which
131.33 	the member separated from active fire department service and
131.34 	relief association membership, whichever is later, to the last
131.35 	day of the month immediately before the month in which the
131.36 	deferred member becomes eligible to begin receipt of the service
132.1 	pension and applies for the deferred service pension.
132.2 	(e) A relief association that provides a defined
132.3 	contribution service pension may, if its governing bylaws so
132.4 	provide, credit interest or additional investment performance on
132.5 	the deferred lump sum service pension during the period of
132.6 	deferral.  If provided for in the bylaws, the interest must be
132.7 	paid in one of the manners specified in paragraph (c) or
132.8 	alternatively the relief association may credit any investment
132.9 	return on the assets of the special fund of the defined
132.10 	contribution volunteer firefighter relief association in
132.11 	proportion to the share of the assets of the special fund to the
132.12 	credit of each individual deferred member account through the
132.13 	date on which the investment return is recognized by and
132.14 	credited to the special fund.
132.15 	(f) For a deferred service pension that is transferred to a
132.16 	separate account established and maintained by the relief
132.17 	association or separate investment vehicle held by the relief
132.18 	association, the deferred member bears the full investment risk
132.19 	subsequent to transfer and in calculating the accrued liability
132.20 	of the volunteer firefighters relief association that pays a
132.21 	lump sum service pension, the accrued liability for deferred
132.22 	service pensions is equal to the separate relief association
132.23 	account balance or the fair market value of the separate
132.24 	investment vehicle held by the relief association.
132.25 	(f) (g) The deferred service pension is governed by and
132.26 	must be calculated under the general statute, special law,
132.27 	relief association articles of incorporation, and relief
132.28 	association bylaw provisions applicable on the date on which the
132.29 	member separated from active service with the fire department
132.30 	and active membership in the relief association.

132.31 	Sec. 13. [424A.021] CREDIT FOR BREAK IN SERVICE TO
132.32 	PROVIDE UNIFORMED SERVICE.
132.33 		Subdivision 1.Authorization. Subject to restrictions
132.34 	stated in this section, a volunteer firefighter who is absent
132.35 	from firefighting service due to service in the uniformed
132.36 	services, as defined in United States Code, title 38, section
133.1 	4303(13), may obtain service credit if the relief association is
133.2 	a defined benefit plan or an allocation of any fire state aid,
133.3 	any municipal contributions, and any investment return received
133.4 	by the relief association if the relief association is a defined
133.5 	contribution plan for the period of the uniformed service, not
133.6 	to exceed five years, unless a longer period is required under
133.7 	United States Code, title 38, section 4312.
133.8 		Subd. 2.Limitations. (a) To be eligible for service
133.9 	credit or an investment return allocation under this section,
133.10 	the volunteer firefighter must return to firefighting service
133.11 	with coverage by the same relief association or by the successor
133.12 	to that relief association upon discharge from service in the
133.13 	uniformed service within the time frame required in United
133.14 	States Code, title 38, section 4312(e).
133.15 	(b) Service credit or an investment return allocation is
133.16 	not authorized if the firefighter separates from uniformed
133.17 	service with a dishonorable or bad conduct discharge or under
133.18 	other than honorable conditions.
133.19 	(c) Service credit or an investment return allocation is
133.20 	not authorized if the firefighter fails to provide notice to the
133.21 	fire department that the individual is leaving to provide
133.22 	service in the uniformed service, unless it is not feasible to
133.23 	provide that notice due to the emergency nature of the situation.

133.24 	Sec. 14. Minnesota Statutes 2004, section 424A.04,
133.25 	subdivision 1, is amended to read:
133.26 		Subdivision 1.Membership.  (a) Every A relief
133.27 	association that is directly associated with a municipal fire
133.28 	department shall must be managed by a board of trustees
133.29 	consisting of nine members.  Six trustees shall must be elected
133.30 	from the membership of the relief association and three trustees
133.31 	shall must be drawn from the officials of the municipalities
133.32 	served by the fire department to which the relief association is
133.33 	directly associated.  The bylaws of a relief association which
133.34 	provides a monthly benefit service pension may provide that one
133.35 	of the six trustees elected from the relief
133.36 	association membership may be a retired member receiving a
134.1 	monthly pension who is elected by the membership of the relief
134.2 	association.  The three ex officio municipal trustees shall be
134.3 	the mayor, the clerk, clerk-treasurer or finance director,must
134.4 	be one elected municipal official and one elected or appointed
134.5 	municipal official who are designated as municipal
134.6 	representatives by the municipal governing board annually and
134.7 	the chief of the municipal fire department.
134.8 	(b) Every A relief association that is a subsidiary of an
134.9 	independent nonprofit firefighting corporation shall must be
134.10 	managed by a board of trustees consisting of ten nine members.
134.11 	Six trustees shall must be elected from the membership of the
134.12 	relief association, three two trustees shall must be drawn from
134.13 	the officials of the municipalities served by the fire
134.14 	department to which the relief association is directly
134.15 	associated, and one trustee shall be the fire chief serving with
134.16 	the independent nonprofit firefighting corporation.  The bylaws
134.17 	of a relief association may provide that one of the six trustees
134.18 	elected from the relief association membership may be a retired
134.19 	member receiving a monthly pension who is elected by the
134.20 	membership of the relief association.  The three ex officio two
134.21 	municipal trustees who are the elected officials shall must 
134.22 	be elected or appointed municipal officials,selected as follows:
134.23 	(1) if only one municipality contracts with the independent
134.24 	nonprofit firefighting corporation, the ex officio municipal 
134.25 	trustees shall must be three elected two officials of the
134.26 	contracting municipality who are designated annually by the
134.27 	governing body of the municipality;
134.28 	(2) if two municipalities contract with the independent
134.29 	nonprofit firefighting corporation, the ex officio trustees
134.30 	shall be two elected officials of the largest municipality in
134.31 	population and one elected official of the next largest
134.32 	municipality in population who are designated by the governing
134.33 	bodies of the applicable municipalities;or
134.34 	(3) (2) if three two or more municipalities contract with
134.35 	the independent nonprofit corporation, the ex officio municipal 
134.36 	trustees shall must be one elected official of from each of
135.1 	the three two largest municipalities in population who are
135.2 	designated annually by the governing bodies of the applicable
135.3 	municipalities.
135.4 	(c) The municipal trustees for a relief association that is
135.5 	directly associated with a fire department operated as or by a
135.6 	joint powers entity must be designated annually by the joint
135.7 	powers board.  The municipal trustees for a relief association
135.8 	that is directly associated with a fire department service area
135.9 	township must be designated by the township board.
135.10 	(d) If a relief association lacks the ex officio municipal 
135.11 	board members provided for in paragraph (a), (b),or (b) (c) 
135.12 	because the fire department is not located in or associated with
135.13 	an organized municipality, joint powers entity, or township,the
135.14 	ex officio municipal board members must be appointed from the
135.15 	fire department service area by the board of commissioners of
135.16 	the applicable county.
135.17 	(e) The term of these appointed ex officio municipal board
135.18 	members is three years one year or until the person's successor
135.19 	is qualified, whichever is later.
135.20 	(d) An ex officio (f) A municipal trustee under paragraph
135.21 	(a), (b), or (c) shall have , or (d) has all the rights and
135.22 	duties accorded to any other trustee,except the right to be an
135.23 	officer of the relief association board of trustees.
135.24 	(e) (g) A board shall must have at least three officers,
135.25 	which shall be who are a president, a secretary and a treasurer.
135.26 	These officers shall must be elected from among the elected
135.27 	trustees by either the full board of trustees or by the
135.28 	membership, as specified in the bylaws, and .In no event shall 
135.29 	may any trustee hold more than one officer position at any one
135.30 	time.  The terms of the elected trustees and of the officers of
135.31 	the board shall must be specified in the bylaws of the relief
135.32 	association, but shall may not exceed three years.  If the term
135.33 	of the elected trustees exceeds one year, the election of the
135.34 	various trustees elected from the membership shall initially and
135.35 	shall thereafter continue to must be staggered on as equal a
135.36 	basis as is practicable.

136.1 	Sec. 15. Minnesota Statutes 2004, section 424B.10,
136.2 	subdivision 1, is amended to read:
136.3 		Subdivision 1.Benefits.  (a) Notwithstanding any
136.4 	provision of section 424A.02, subdivision 3, to the contrary,
136.5 	the service pension of the subsequent relief association as of
136.6 	the effective date of consolidation is either the service
136.7 	pension amount specified in clause (1) or the service pension
136.8 	amounts specified in clause (2), as provided for in the
136.9 	consolidated relief association's articles of incorporation or
136.10 	bylaws:
136.11 	(1) the highest dollar amount service pension amount of any
136.12 	prior volunteer firefighters relief association in effect
136.13 	immediately before the consolidation initiation if the pension
136.14 	amount was implemented consistent with section 424A.02; or 
136.15 	(2) for service rendered by each individual volunteer
136.16 	firefighter before consolidation, the service pension amount
136.17 	under the consolidating volunteer firefighters relief
136.18 	association that the firefighter belonged to immediately before
136.19 	the consolidation if the pension amount was implemented
136.20 	consistent with section 424A.02 and for service rendered after
136.21 	the effective date of the consolidation, the highest dollar
136.22 	amount service pension of any of the consolidating volunteer
136.23 	firefighters relief associations in effect immediately before
136.24 	the consolidation if the pension amount was implemented
136.25 	consistent with section 424A.02.
136.26 	(b) Any increase in the service pension amount beyond the
136.27 	amount implemented under paragraph (a) must conform with the
136.28 	requirements and limitations of sections 69.771 to 69.775 and
136.29 	424A.02.

136.30 	Sec. 16. STUDY OF STATEWIDE LUMP-SUM VOLUNTEER
136.31 	FIREFIGHTER RETIREMENT PLAN; CREATION OF TASK FORCE.
 136.32 		Subdivision 1.Task force membership. (a) A statewide
136.33 	Volunteer Firefighter Retirement Plan Study Task Force is
136.34 	created.
136.35 	(b) The task force members are:
136.36 	(1) four members appointed by the president of the
137.1 	Minnesota Area Relief Association coalition;
137.2 	(2) four members appointed by the president of the
137.3 	Minnesota State Fire Department Association;
137.4 	(3) four members appointed by the president of the
137.5 	Minnesota State Fire Chiefs Association;
137.6 	(4) four members appointed by the board of directors of the
137.7 	League of Minnesota Cities;
137.8 	(5) two members appointed by the board of directors of the
137.9 	Insurance Federation of Minnesota;
137.10 	(6) two members appointed by the board of directors of the
137.11 	Minnesota Association of Farm Mutual Insurance Companies; and 
137.12 	(7) the Minnesota state auditor or the auditor's designee.
137.13 	(c) Appointments must be made on or before July 1, 2005.
137.14 	If the appointment is not made in a timely manner, or if there
137.15 	is a vacancy, the state auditor shall appoint the task force
137.16 	member or the replacement member.
137.17 	(d) The chair of the task force shall be selected by the
137.18 	task force.
137.19 	(e) Administrative services for the task force must be
137.20 	provided by the Department of Public Safety.
137.21 		Subd. 2.Task force duties. (a) The task force shall
137.22 	conduct fact finding regarding the creation of a statewide
137.23 	volunteer firefighter retirement plan.
137.24 	(b) The task force shall recommend the investment vehicle
137.25 	or vehicles to be utilized by the plan, the administration and
137.26 	corporate governance structure of the plan, the incentives
137.27 	needed to formulate the plan, the limitations applicable to the
137.28 	plan, and the state resources needed to be dedicated to the plan.
137.29 		Subd. 3.Report. The task force shall prepare a report
137.30 	detailing its findings about a potential statewide volunteer
137.31 	firefighter retirement plan.  The report is due January 15,
137.32 	2006, and must be filed with the Legislative Reference Library;
137.33 	the chair of the Legislative Commission on Pensions and
137.34 	Retirement; the chair of the State and Local Government
137.35 	Operations Committee of the senate; the chair of the State
137.36 	Government Budget Division, Environment, Agriculture, and
138.1 	Economic Development Budget Division, and Public Safety Budget
138.2 	Division of the senate Finance Committee; the chair of the
138.3 	Governmental Operations and Veterans Affairs Policy Committee of
138.4 	the house of representatives; and the chair of the State
138.5 	Government Finance Committee of the house of representatives.

138.6 	Sec. 17. APPROPRIATION.
 138.7 	$40,000 is appropriated from the general fund in fiscal
138.8 	year 2006 to the commissioner of public safety to hire a
138.9 	consultant to assist the statewide Volunteer Firefighter
138.10 	Retirement Plan Study Task Force.

138.11 	Sec. 18. EFFECTIVE DATE.
 138.12 	(a) Sections 1 to 12 and 14 to 17 are effective July 1,
138.13 	2005.
138.14 	(b) Section 13 is effective July 1, 2005, and applies to
138.15 	breaks in service that end on or after that date.

138.16 	ARTICLE 12
138.17 	VARIOUS CORRECTIONS
138.18 	AND CLARIFICATIONS

138.19 	Section 1. Minnesota Statutes 2004, section 3A.13, is
138.20 	amended to read:
138.21 	3A.13 EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM
138.22 	DEDUCTION.
138.23 	(a) The provisions of section 352.15 shall 356.401 apply to
138.24 	the legislators retirement plan, chapter 3A.
138.25 	(b) The executive director of the Minnesota State
138.26 	Retirement System must, at the request of a retired legislator
138.27 	who is enrolled in a health insurance plan covering state
138.28 	employees, deduct the person's health insurance premiums from
138.29 	the person's annuity and transfer the amount of the premium to a
138.30 	health insurance carrier covering state employees.

138.31 	Sec. 2. Minnesota Statutes 2004, section 69.011,
138.32 	subdivision 2b, is amended to read:
138.33 		Subd. 2b.Departments of natural resources and public
138.34 	safety.  (a) On or before July 1, 1997, the commissioner of
138.35 	natural resources shall certify one-half of the number of peace
138.36 	officers as defined in subdivision 1, clause (g), employed by
139.1 	the Enforcement Division during calendar year 1996 and the
139.2 	commissioner of public safety shall certify one-half of the
139.3 	number of peace officers as defined in subdivision 1, clause
139.4 	(g), employed by the Bureau of Criminal Apprehension, the
139.5 	Gambling Enforcement Division, and the State Patrol Division
139.6 	during calendar year 1996.
139.7 	(b) On or before March 15, 1998, the commissioner of
139.8 	natural resources shall certify seven-tenths of the number of
139.9 	peace officers as defined in subdivision 1, clause (g), employed
139.10 	by the Enforcement Division and the commissioner of public
139.11 	safety shall certify seven-tenths of the number of peace
139.12 	officers as defined in subdivision 1, clause (g), employed by
139.13 	the Bureau of Criminal Apprehension, the Gambling Enforcement
139.14 	Division, and the State Patrol Division.
139.15 	(c) On or before March 15, 1999, and annually on or before 
139.16 	each March 15 thereafter, the commissioner of natural resources
139.17 	shall certify the number of peace officers as defined in
139.18 	subdivision 1, clause (g), employed by the Enforcement Division
139.19 	and the commissioner of public safety shall certify the number
139.20 	of peace officers as defined in subdivision 1, clause (g),
139.21 	employed by the Bureau of Criminal Apprehension, the Gambling
139.22 	Enforcement Division, and the State Patrol Division.
139.23 	(d) (b) The certification must be on a form prescribed by
139.24 	the commissioner.  Peace officers certified under this paragraph
139.25 	must be included in the total certifications under subdivision 2.

139.26 	Sec. 3. Minnesota Statutes 2004, section 69.021,
139.27 	subdivision 5, is amended to read:
139.28 		Subd. 5.Calculation of state aid.  (a) The amount of
139.29 	fire state aid available for apportionment, before the addition
139.30 	of the minimum fire state aid allocation amount under
139.31 	subdivision 7, is equal to 107 percent of the amount of premium
139.32 	taxes paid to the state upon the fire, lightning, sprinkler
139.33 	leakage, and extended coverage premiums reported to the
139.34 	commissioner by insurers on the Minnesota Firetown Premium
139.35 	Report.  This amount shall must be reduced by the amount
139.36 	required to pay the state auditor's costs and expenses of the
140.1 	audits or exams of the firefighters relief associations.
140.2 	The total amount for apportionment in respect to fire state
140.3 	aid must not be less than two percent of the premiums reported
140.4 	to the commissioner by insurers on the Minnesota Firetown
140.5 	Premium Report after subtracting the following amounts:
140.6 	(1) the amount required to pay the state auditor's costs
140.7 	and expenses of the audits or exams of the firefighters relief
140.8 	associations; and
140.9 	(2) one percent of the premiums reported by town and
140.10 	farmers' mutual insurance companies and mutual property and
140.11 	casualty companies with total assets of $5,000,000 or less.
140.12 	(b) The total amount for apportionment as police state aid
140.13 	is equal to 104 percent of the amount of premium taxes paid to
140.14 	the state on the premiums reported to the commissioner by
140.15 	insurers on the Minnesota Aid to Police Premium Report, reduced
140.16 	by the amount required to pay the costs and expenses of the
140.17 	state auditor for audits or exams of police relief
140.18 	associations.  The total amount for apportionment in respect to
140.19 	the police state aid program must not be less than two percent
140.20 	of the amount of premiums reported to the commissioner by
140.21 	insurers on the Minnesota Aid to Police Premium Report after
140.22 	subtracting the amount required to pay the state auditor's cost
140.23 	and expenses of the audits or exams of the police relief
140.24 	associations.
140.25 	(c) The commissioner shall calculate the percentage of
140.26 	increase or decrease reflected in the apportionment over or
140.27 	under the previous year's available state aid using the same
140.28 	premiums as a basis for comparison.
140.29 	(d) The amount for apportionment in respect to peace
140.30 	officer state aid under paragraph (b) must be further reduced by
140.31 	$1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000,
140.32 	and $2,404,000 in fiscal year 2001.  These reductions in this
140.33 	paragraph cancel to the general fund.
140.34 	(e) In addition to the amount for apportionment of police
140.35 	state aid under paragraph (b), each year $100,000 shall must be
140.36 	apportioned for police state aid.  An amount sufficient to pay
141.1 	this increase is annually appropriated from the general fund.

141.2 	Sec. 4. Minnesota Statutes 2004, section 69.021,
141.3 	subdivision 11, is amended to read:
141.4 		Subd. 11.Excess police state-aid holding account.  (a)
141.5 	The excess police state-aid holding account is established in
141.6 	the general fund.  The excess police state-aid holding account
141.7 	must be administered by the commissioner.
141.8 	(b) Excess police state aid determined according to
141.9 	subdivision 10, must be deposited in the excess police state-aid
141.10 	holding account.
141.11 	(c) From the balance in the excess police state-aid holding
141.12 	account, $900,000 is appropriated to and must be transferred
141.13 	annually to the ambulance service personnel longevity award and
141.14 	incentive suspense account established by section 144E.42,
141.15 	subdivision 2.
141.16 	(d) If a police officer stress reduction program is created
141.17 	by law and money is appropriated for that program, an amount
141.18 	equal to that appropriation must be transferred to the
141.19 	administrator of that program from the balance in the excess
141.20 	police state-aid holding account.
141.21 	(e) On October 1, 1997, and annually on each subsequent
141.22 	October 1,one-half of the balance of the excess police
141.23 	state-aid holding account remaining after the deductions under
141.24 	paragraphs (c) and (d) is appropriated for additional
141.25 	amortization aid under section 423A.02, subdivision 1b.
141.26 	(f) Annually, the remaining balance in the excess police
141.27 	state-aid holding account, after the deductions under paragraphs
141.28 	(c), (d), and (e), cancels to the general fund.

141.29 	Sec. 5. Minnesota Statutes 2004, section 69.33, is amended
141.30 	to read:
141.31 	69.33 NAMES OF ASSOCIATIONS REPORTED TO INSURANCE
141.32 	COMPANIES.
141.33 	The commissioner shall enclose in the annual statement
141.34 	blank that is sent to all fire insurance companies doing
141.35 	business in this state a blank form containing the names of all
141.36 	firefighters' relief associations in all cities of the first
142.1 	class and the names of the cities and require these companies,
142.2 	at the time of making their annual statements to the
142.3 	commissioner, to state on these blanks the amount of premiums
142.4 	received by them upon properties insured within the corporate
142.5 	limits of the cities named thereon during the year ending
142.6 	December 31st last past.  Thereafter, before July first each
142.7 	year, the commissioner shall certify to the commissioner of
142.8 	finance the information thus obtained, together with the amount
142.9 	of the tax for the benefit of the relief association pension
142.10 	plans covering firefighters in cities of the first class paid in
142.11 	such year by these companies upon these insurance premiums.

142.12 	Sec. 6. Minnesota Statutes 2004, section 69.773,
142.13 	subdivision 4, is amended to read:
142.14 		Subd. 4.Financial requirements of special fund. Prior
142.15 	to Before August 1 of each year, the officers of the relief
142.16 	association shall determine the financial requirements of the
142.17 	special fund of the relief association in accordance with the
142.18 	requirements of this subdivision.  The financial requirements of
142.19 	the relief association shall must be based on the most recent
142.20 	actuarial valuation of the special fund prepared in accordance
142.21 	with subdivision 2.  If the relief association has an unfunded
142.22 	actuarial accrued liability as reported in the most recent
142.23 	actuarial valuation, the financial requirements shall must be
142.24 	determined by adding the figures calculated pursuant to under 
142.25 	clauses (a), (b), and (c).  If the relief association does not
142.26 	have an unfunded actuarial accrued liability as reported in the
142.27 	most recent actuarial valuation, the financial requirements
142.28 	shall must be an amount equal to the figure calculated pursuant
142.29 	to under clauses (a) and (b), reduced by an amount equal to
142.30 	one-tenth of the amount of any assets in excess of the actuarial
142.31 	accrued liability of the relief association.  The determination
142.32 	of whether or not the relief association has an unfunded
142.33 	actuarial accrued liability shall must be based on the current
142.34 	market value of assets for which a market value is readily
142.35 	ascertainable and the cost or book value, whichever is
142.36 	applicable, for assets for which no market value is readily
143.1 	ascertainable.
143.2 	(a) The normal level cost requirement for the following
143.3 	year, expressed as a dollar amount, shall be is the figure for
143.4 	the normal level cost of the relief association as reported in
143.5 	the actuarial valuation.
143.6 	(b) The amount of anticipated future administrative
143.7 	expenses of the special fund shall must be calculated by
143.8 	multiplying the dollar amount of the administrative expenses of
143.9 	the special fund for the most recent year by the factor of 1.035.
143.10 	(c) The amortization contribution requirement to retire the
143.11 	current unfunded actuarial accrued liability by the established
143.12 	date for full funding shall be is the figure for the
143.13 	amortization contribution as reported in the actuarial
143.14 	valuation. If there has not been a change in the actuarial
143.15 	assumptions used for calculating the actuarial accrued liability
143.16 	of the special fund, a change in the bylaws of the relief
143.17 	association governing the service pensions, retirement benefits,
143.18 	or both payable from the special fund or a change in the
143.19 	actuarial cost method used to value all or a portion of the
143.20 	special fund which change or changes, which by themselves
143.21 	without inclusion of any other items of increase or decrease,
143.22 	produce a net increase in the unfunded actuarial accrued
143.23 	liability of the special fund since December 31, 1970, the
143.24 	established date for full funding shall be December 31, 1990.
143.25 	If there has been a change in the actuarial assumptions used for
143.26 	calculating the actuarial accrued liability of the special fund,
143.27 	a change in the bylaws of the relief association governing the
143.28 	service pensions, retirement benefits, or both payable from the
143.29 	special fund or a change in the actuarial cost method used to
143.30 	value all or a portion of the special fund and the change or
143.31 	changes, by themselves and without inclusion of any other items
143.32 	of increase or decrease, produce a net increase in the unfunded
143.33 	actuarial accrued liability of the special fund since December
143.34 	31, 1970, but prior to January 1, 1979, the established date for
143.35 	full funding shall be December 31, 1998, and if there has been a
143.36 	change since December 31, 1978, the established date for full
144.1 	funding shall must be determined using the following procedure:
144.2 	(i) the unfunded actuarial accrued liability of the special
144.3 	fund shall must be determined in accordance with the provisions
144.4 	governing service pensions, retirement benefits, and actuarial
144.5 	assumptions in effect before an applicable change;
144.6 	(ii) the level annual dollar contribution needed to
144.7 	amortize this unfunded actuarial accrued liability amount by the
144.8 	date for full funding in effect prior to before the change shall 
144.9 	must be calculated using the interest assumption specified in
144.10 	section 356.215, subdivision 8, in effect before any applicable
144.11 	change;
144.12 	(iii) the unfunded actuarial accrued liability of the
144.13 	special fund shall must be determined in accordance with any new
144.14 	provisions governing service pensions, retirement benefits, and
144.15 	actuarial assumptions and the remaining provisions governing
144.16 	service pensions, retirement benefits, and actuarial assumptions
144.17 	in effect before an applicable change;
144.18 	(iv) the level annual dollar contribution needed to
144.19 	amortize the difference between the unfunded actuarial accrued
144.20 	liability amount calculated pursuant to under subclause (i) and
144.21 	the unfunded actuarial accrued liability amount
144.22 	calculated pursuant to under subclause (iii) over a period of 20
144.23 	years starting December 31 of the year in which the change is
144.24 	effective shall must be calculated using the interest assumption
144.25 	specified in section 356.215, subdivision 8, in effect after any
144.26 	applicable change;
144.27 	(v) the annual amortization contribution calculated
144.28 	pursuant to under subclause (iv) shall must be added to the
144.29 	annual amortization contribution calculated pursuant to under 
144.30 	subclause (ii);
144.31 	(vi) the period in which the unfunded actuarial accrued
144.32 	liability amount determined in subclause (iii) will be amortized
144.33 	by the total annual amortization contribution computed pursuant
144.34 	to under subclause (v) shall must be calculated using the
144.35 	interest assumption specified in section 356.215, subdivision 8,
144.36 	in effect after any applicable change, rounded to the nearest
145.1 	integral number of years, but which shall does not exceed a
145.2 	period of 20 years from the end of the year in which the
145.3 	determination of the date for full funding using this procedure
145.4 	is made and which shall is not be less than the period of years
145.5 	beginning in the year in which the determination of the date for
145.6 	full funding using this procedure is made and ending by the date
145.7 	for full funding in effect before the change;
145.8 	(vii) the period determined pursuant to under subclause (vi)
145.9 	shall must be added to the date as of which the actuarial
145.10 	valuation was prepared and the resulting date shall be is the
145.11 	new date for full funding.

145.12 	Sec. 7. Minnesota Statutes 2004, section 352.01,
145.13 	subdivision 4, is amended to read:
145.14 		Subd. 4.Accumulated contributions.  "Accumulated
145.15 	contributions" means the total, exclusive of interest, of (1)
145.16 	the sums deducted from the salary of an employee, (2) the amount
145.17 	of payments, including assessments, paid by the employee in lieu
145.18 	of salary deductions and all other payments made under Laws
145.19 	1929, chapter 191, as amended,this chapter and credited to the
145.20 	employee's individual account in the retirement fund.

145.21 	Sec. 8. Minnesota Statutes 2004, section 352.01,
145.22 	subdivision 5, is amended to read:
145.23 		Subd. 5.Retirement fund. (a) "Retirement fund" means
145.24 	the general state employees retirement fund created by section
145.25 	352.04, subdivision 1, with respect to the general state
145.26 	employees retirement plan or the correctional state employees
145.27 	retirement fund created by section 352.911, subdivision 1, with
145.28 	respect to the correctional state employees retirement plan.
145.29 	(b) " The retirement fund " includes the aggregate of
145.30 	accumulated contributions of employees covered by the applicable
145.31 	plan, and all other funds paid into the state treasury or
145.32 	received by the director under Laws 1929, chapter 191, as
145.33 	amended this chapter, together with all income and profits from
145.34 	the money and interest on it, including contributions on the
145.35 	part of the federal government, the state, and state departments.

145.36 	Sec. 9. Minnesota Statutes 2004, section 352.01,
146.1 	subdivision 21, is amended to read:
146.2 		Subd. 21.Accrued annuities. (a) In this chapter and
146.3 	chapters 3A, 352B, 352C, and 490, "accrued annuity"  means an
146.4 	annuity that had become payable to a retired employee in the
146.5 	lifetime of the employee.
146.6 	(b) An annuity or benefit authorized as provided in this
146.7 	chapter and chapters 3A, 352B, 352C, and 490 becomes payable on
146.8 	the first day of each calendar month for that calendar month and
146.9 	is to must be paid on the first day of each calendar month
146.10 	beginning with benefits payable on and after December 1, 1977.
146.11 	(c) Notwithstanding any provision to the contrary in this
146.12 	chapter and chapters 3A, 352B, 352C, and 490, benefit payment
146.13 	authorized as "payable for life" is payable for the entire month
146.14 	in which death occurs, and the benefit payment for the month of
146.15 	death is payable to the surviving spouse or other beneficiary
146.16 	only if the annuitant dies before negotiating the benefit check.

146.17 	Sec. 10. Minnesota Statutes 2004, section 352.01,
146.18 	subdivision 23, is amended to read:
146.19 		Subd. 23.Coverage or covered by the system.  "Coverage"
146.20 	or "covered by the system" means that a state employees employee 
146.21 	who serve serves the state of Minnesota and make makes the
146.22 	required employee contributions to the retirement fund will is,
146.23 	by reason of these contributions become ,entitled to either (1)
146.24 	a retirement annuity, or (2) a disability benefit, or (3) a
146.25 	refund of accumulated contributions, as provided in this chapter.

146.26 	Sec. 11. Minnesota Statutes 2004, section 352.021,
146.27 	subdivision 1, is amended to read:
146.28 		Subdivision 1.Establishment. (a) There is established
146.29 	the general state employees retirement plan of the Minnesota
146.30 	State Retirement System for state employees.
146.31 	(b) The system general state employees retirement plan is a
146.32 	continuation of the State Employees Retirement Association.
146.33 	(c) Any person who was a member of the State Employees
146.34 	Retirement Association on June 30, 1967, is covered by
146.35 	the system general state employees retirement plan and is
146.36 	entitled to all benefits provided by the system plan upon
147.1 	fulfilling the age, service, contribution, and other
147.2 	requirements of this chapter.

147.3 	Sec. 12. Minnesota Statutes 2004, section 352.021,
147.4 	subdivision 2, is amended to read:
147.5 		Subd. 2.State employees covered.  Every person who is a
147.6 	state employee, as defined in section 352.01, on July 1, 1967,
147.7 	or becomes a state employee after that date as defined in
147.8 	section 352.01is covered by the system general state employees
147.9 	retirement plan.  Acceptance of state employment or continuance
147.10 	in state service is deemed to be consent to have deductions made
147.11 	from salary for deposit to the credit of the account of the
147.12 	state employee in the retirement fund.

147.13 	Sec. 13. Minnesota Statutes 2004, section 352.021,
147.14 	subdivision 3, is amended to read:
147.15 		Subd. 3.Optional exemptions.  Any person who is
147.16 	appointed by the governor or lieutenant governor may request
147.17 	exemption from coverage by the general state employees
147.18 	retirement plan under this chapter if the appointee is not so 
147.19 	covered at by the plan on the date of appointment.  To qualify
147.20 	for this exemption, a written request must be made within 90
147.21 	days from the date of entering upon the duties of the position
147.22 	to which the person is appointed.  After making the request, a
147.23 	person requesting the exemption is not entitled to coverage by
147.24 	the general state employees retirement plan while employed in
147.25 	the position that entitled that person to an exemption from
147.26 	coverage.

147.27 	Sec. 14. Minnesota Statutes 2004, section 352.021,
147.28 	subdivision 4, is amended to read:
147.29 		Subd. 4.Reentering service after refund.  When a former
147.30 	employee who has withdrawn accumulated contributions reenters
147.31 	employment in a position entitled to coverage under the
147.32 	system general state employees retirement plan, the employee
147.33 	shall must be covered by the system plan on the same basis as a
147.34 	new employee and is not entitled to credit for any former
147.35 	service.  The annuity rights forfeited when taking a refund can
147.36 	only be restored as provided in this chapter.

148.1 	Sec. 15. Minnesota Statutes 2004, section 352.04,
148.2 	subdivision 1, is amended to read:
148.3 		Subdivision 1.Fund created.  (a) There is created a
148.4 	special fund to be known as the general state employees
148.5 	retirement fund.  In that fund there shall be deposited
148.6 	employees , employee contributions, employers employer 
148.7 	contributions, and other amounts authorized by law must be
148.8 	deposited.
148.9 	(b) Effective July 1, 1969,The general state employees
148.10 	retirement plan of the Minnesota State Retirement System shall 
148.11 	must participate in the Minnesota postretirement investment fund.
148.12 	In that fund there shall be deposited The amounts provided in
148.13 	section 352.119must be deposited in the Minnesota
148.14 	postretirement investment fund.

148.15 	Sec. 16. Minnesota Statutes 2004, section 352.04,
148.16 	subdivision 12, is amended to read:
148.17 		Subd. 12.Fund disbursement restricted.  The general 
148.18 	state employees retirement fund and the participation in the
148.19 	Minnesota postretirement investment fund must be disbursed only
148.20 	for the purposes provided by law.  The expenses of the system
148.21 	and any benefits provided by law, other than benefits payable
148.22 	from the Minnesota postretirement investment fund, must be paid
148.23 	from the general state employees retirement fund.  The
148.24 	retirement allowances, retirement annuities, and disability
148.25 	benefits, as well as refunds of any sum remaining to the credit
148.26 	of a deceased retired employee or a disabled employee must be
148.27 	paid only from the general state employees retirement fund after
148.28 	the needs have been certified and the amounts withdrawn from the
148.29 	participation in the Minnesota postretirement investment fund
148.30 	under section 11A.18.  The amounts necessary to make the
148.31 	payments from the general state employees retirement fund and
148.32 	the participation in the Minnesota postretirement investment
148.33 	fund are annually appropriated from these funds for those
148.34 	purposes.

148.35 	Sec. 17. Minnesota Statutes 2004, section 352.041,
148.36 	subdivision 1, is amended to read:
149.1 		Subdivision 1.Allowable service credit. Any (a) An 
149.2 	employee covered by the system general state employees
149.3 	retirement plan who is given a leave of absence for employment
149.4 	by a political subdivision of the state shall remains a member
149.5 	of the plan and must continue to pay member contributions into
149.6 	the general state employees retirement fund for the period of
149.7 	leave.
149.8 	(b) Upon payment of member contributions,the employee must
149.9 	be given allowable service credit as a state employee on the
149.10 	records of the system retirement plan as though the employee had
149.11 	received salary from the state during the leave.  Payments into
149.12 	the retirement fund shall must be at the rate required in
149.13 	section 352.04, subdivision 2, and must be based upon the salary
149.14 	received from the political subdivision subject to the maximum
149.15 	amount, if any.

149.16 	Sec. 18. Minnesota Statutes 2004, section 352.041,
149.17 	subdivision 2, is amended to read:
149.18 		Subd. 2.Employee contributions, procedure.  The officer
149.19 	or employee who is authorized by law to pay salaries to
149.20 	employees of the political subdivision which is employing a
149.21 	state employee shall have must deduct employee contributions
149.22 	deducted for the general state employees retirement plan under
149.23 	section 352.04, subdivision 2,from the salary of each employee
149.24 	who is on leave of absence from state service on each payroll
149.25 	abstract and shall must pay the sum to the director following
149.26 	the conclusion of each pay period.

149.27 	Sec. 19. Minnesota Statutes 2004, section 352.041,
149.28 	subdivision 3, is amended to read:
149.29 		Subd. 3.Employer contributions, procedure.  The officer
149.30 	or employee who is authorized by law to pay salaries to
149.31 	employees of the political subdivision which is employing a
149.32 	state employee covered by the system shall general state
149.33 	employees retirement plan also must have employer contributions
149.34 	made to the general state employees retirement fund on following
149.35 	the conclusion of each payroll abstract in the amount required
149.36 	by section 352.04, subdivision 3.  These contributions are to 
150.1 	must be charged to the political subdivision as an
150.2 	administrative cost.

150.3 	Sec. 20. Minnesota Statutes 2004, section 352.041,
150.4 	subdivision 5, is amended to read:
150.5 		Subd. 5.Employer contributions, leaves of absence; tax
150.6 	levies. (a) Every political subdivision which is employing a
150.7 	state employee covered by the system on leave of absence from
150.8 	state service for employment by a political subdivision of the
150.9 	state shall must pay into the general state employees retirement
150.10 	fund the amount of the employer contribution required by law for
150.11 	state employees covered by the system under section 352.04,
150.12 	subdivision 3.
150.13 	(b) Employing political subdivisions, except other than 
150.14 	school districts,may levy taxes necessary for the payment of
150.15 	employer contributions without limitation as to rate or amount.
150.16 	The levy of the taxes does not reduce the amount of other
150.17 	taxes to that may be levied by political subdivisions,
150.18 	except other than school districts,which are subject to any
150.19 	limitation.

150.20 	Sec. 21. Minnesota Statutes 2004, section 352.15,
150.21 	subdivision 1, is amended to read:
150.22 		Subdivision 1.Exemption; exceptions. None of the money,
150.23 	annuities, or other benefits mentioned in this chapter is
150.24 	assignable either in law or in equity or subject to execution,
150.25 	levy, attachment, garnishment, or other legal process, except as
150.26 	provided in subdivision 1a or section 518.58, 518.581, or
150.27 	518.6111.The provisions of section 356.401 apply to the general
150.28 	state employees retirement plan and to the correctional state
150.29 	employees retirement plan.

150.30 	Sec. 22. Minnesota Statutes 2004, section 352.15,
150.31 	subdivision 3, is amended to read:
150.32 		Subd. 3.Deducting health or dental insurance premiums.
 150.33 	The board may direct authorize, at its discretion, the deduction
150.34 	of a retiree's health or dental insurance premiums and transfer
150.35 	of the amounts to a health or dental insurance carrier covering
150.36 	state employees.  The insurance carrier must certify that the
151.1 	retired employee has signed an authorization for the deduction
151.2 	and provide a computer readable roster of covered retirees and
151.3 	amounts.  The health or dental insurance carrier must refund
151.4 	deductions withheld from a retiree's check in error directly to
151.5 	the retiree.  The board shall require that the insurance carrier
151.6 	to reimburse the fund for the administrative expense of
151.7 	withholding the premium amounts.  The insurance carrier shall
151.8 	assume liability for any failure of the system to properly
151.9 	withhold the premium amounts.

151.10 	Sec. 23. Minnesota Statutes 2004, section 352.15,
151.11 	subdivision 4, is amended to read:
151.12 		Subd. 4.Direct transfer of refunds. A direct transfer
151.13 	of account refunds under this chapter may be made to an 
151.14 	individual retirement savings accounts account or a qualified
151.15 	retirement plans plan of the person upon the receipt of an 
151.16 	application for transfer by a former employee, on forms
151.17 	acceptable to the executive director.

151.18 	Sec. 24. Minnesota Statutes 2004, section 352.22,
151.19 	subdivision 10, is amended to read:
151.20 		Subd. 10.Other refunds.  Former employees covered by the
151.21 	system are entitled to apply for refunds if they are or become
151.22 	members of the State Patrol retirement fund, the state Teachers
151.23 	Retirement Association, or employees of the University of
151.24 	Minnesota excluded from coverage under the system by action of
151.25 	the Board of Regents; or labor service employees, excluded from
151.26 	coverage under section 352.01, subdivision 2b, clause (25);or
151.27 	employees of the adjutant general who under federal law
151.28 	effectually elect membership in a federal retirement system; or
151.29 	officers or employees of the senate or house of representatives,
151.30 	excluded from coverage under section 352.01, subdivision 2b,
151.31 	clause (8) (7).  The refunds must include accumulated
151.32 	contributions plus interest as provided in subdivision 2.  These
151.33 	employees may apply for a refund once 30 days or more have
151.34 	elapsed after their coverage ceases, even if they continue in
151.35 	state service but in positions not covered by this chapter.

151.36 	Sec. 25. Minnesota Statutes 2004, section 352B.01,
152.1 	subdivision 1, is amended to read:
152.2 		Subdivision 1.Scope.  In this chapter, each of the terms
152.3 	defined in this section have has the meanings meaning given
152.4 	them to it.

152.5 	Sec. 26. Minnesota Statutes 2004, section 352B.01,
152.6 	subdivision 2, is amended to read:
152.7 		Subd. 2.Member.  "Member" means:
152.8 	(1) a State Patrol member currently employed after June 30,
152.9 	1943,under section 299D.03 by the state, who is a peace officer
152.10 	under section 626.84, and whose salary or compensation is paid
152.11 	out of state funds;
152.12 	(2) a conservation officer employed under section 97A.201,
152.13 	currently employed by the state, whose salary or compensation is
152.14 	paid out of state funds;
152.15 	(3) a crime bureau officer who was employed by the crime
152.16 	bureau and was a member of the Highway Patrolmen's retirement
152.17 	fund on July 1, 1978, whether or not that person has the power
152.18 	of arrest by warrant after that date, or who is employed as
152.19 	police personnel, with powers of arrest by warrant under section
152.20 	299C.04, and who is currently employed by the state, and whose
152.21 	salary or compensation is paid out of state funds;
152.22 	(4) a person who is employed by the state in the Department
152.23 	of Public Safety in a data processing management position with
152.24 	salary or compensation paid from state funds, who was a crime
152.25 	bureau officer covered by the State Patrol retirement plan on
152.26 	August 15, 1987, and who was initially hired in the data
152.27 	processing management position within the department during
152.28 	September 1987, or January 1988, with membership continuing for
152.29 	the duration of the person's employment in that position,
152.30 	whether or not the person has the power of arrest by warrant
152.31 	after August 15, 1987;
152.32 	(5) a public safety employee defined as who is a peace
152.33 	officer in under section 626.84, subdivision 1, paragraph (c),
152.34 	and who is employed with by the Division of Alcohol and Gambling
152.35 	Enforcement under section 299L.01; and
152.36 	(6) a Fugitive Apprehension Unit officer after October 31,
153.1 	2000, who is employed by the Office of Special Investigations of
153.2 	the Department of Corrections and who is a peace officer under
153.3 	section 626.84.

153.4 	Sec. 27. Minnesota Statutes 2004, section 352B.01,
153.5 	subdivision 3, is amended to read:
153.6 		Subd. 3.Allowable service.  (a) "Allowable service"
153.7 	means:
153.8 	(1) for members defined in subdivision 2, clause (a) (1),
153.9 	monthly service is granted for in any month for which payments
153.10 	have been made to the State Patrol retirement fund, and
153.11 	(2) for members defined in subdivision 2, clauses (b) (2) 
153.12 	and (c) (3), service for which payments have been made to the
153.13 	State Patrol retirement fund, service for which payments were
153.14 	made to the State Police officers retirement fund after June 30,
153.15 	1961, and all prior service which was credited to a member for
153.16 	service on or before June 30, 1961.
153.17 	(b) Allowable service also includes any period of absence
153.18 	from duty by a member who, by reason of injury incurred in the
153.19 	performance of duty, is temporarily disabled and for which
153.20 	disability the state is liable under the workers' compensation
153.21 	law, until the date authorized by the executive director for
153.22 	commencement of payment of a disability benefit or return to
153.23 	employment.
153.24 	(c) MS 2002 (Expired)
153.25 	(d) Allowable service means service in a month during which
153.26 	a member is paid a salary from which a member contribution is
153.27 	deducted, deposited, and credited in the State Patrol retirement
153.28 	fund.

153.29 	Sec. 28. Minnesota Statutes 2004, section 352B.02,
153.30 	subdivision 1e, is amended to read:
153.31 		Subd. 1e.Audit; actuarial valuation.  The legislative
153.32 	auditor shall audit the fund.  Any actuarial valuation of the
153.33 	fund required under section 356.215 must be prepared by the
153.34 	actuary retained under section 356.214.  Any approved actuary
153.35 	retained by the executive director under section 352.03,
153.36 	subdivision 6, may perform actuarial valuations and experience
154.1 	studies to supplement those performed by the commission-retained 
154.2 	actuary retained under section 356.214.  Any supplemental
154.3 	actuarial valuation or experience studies shall must be filed
154.4 	with the executive director of the Legislative Commission on
154.5 	Pensions and Retirement.

154.6 	Sec. 29. Minnesota Statutes 2004, section 352B.071, is
154.7 	amended to read:
154.8 	352B.071 EXEMPTION FROM PROCESS.
154.9 	None of the money, annuities, or other benefits provided
154.10 	for in this chapter is assignable either in law or in equity or
154.11 	be subject to execution, levy, attachment, garnishment, or other
154.12 	legal process, except as provided in section 518.58, 518.581, or
154.13 	518.6111.The provisions of section 356.401 apply to the State
154.14 	Patrol retirement fund.

154.15 	Sec. 30. Minnesota Statutes 2004, section 352D.01, is
154.16 	amended to read:
154.17 	352D.01 ESTABLISHMENT.
154.18 	There is hereby established within the Minnesota State
154.19 	Retirement System a retirement program for certain public
154.20 	employees to be known as the Minnesota unclassified employees
154.21 	retirement program, which shall be .  The program must be 
154.22 	administered by the Minnesota State Retirement System.

154.23 	Sec. 31. Minnesota Statutes 2004, section 352D.015,
154.24 	subdivision 3, is amended to read:
154.25 		Subd. 3.Supplemental investment fund.  "Supplemental
154.26 	investment fund" means the fund established and governed by
154.27 	section 11A.17.

154.28 	Sec. 32. Minnesota Statutes 2004, section 352D.015,
154.29 	subdivision 4, is amended to read:
154.30 		Subd. 4.General fund.  "General fund" means the general 
154.31 	state employees retirement fund except the moneys for the
154.32 	unclassified program.

154.33 	Sec. 33. Minnesota Statutes 2004, section 352D.03, is
154.34 	amended to read:
154.35 	352D.03 TRANSFER OF ASSETS.
154.36 	Unless an eligible employee enumerated in section 352D.02,
155.1 	subdivision 1 or 1a, has elected coverage under the individual
155.2 	retirement account plan under chapter 354B, a sum of money
155.3 	representing the assets credited to each employee exercising the
155.4 	option contained in section 352D.02, plus an equal employer
155.5 	contribution together with interest for the employment period at
155.6 	the actuarially assumed rates applicable preretirement interest
155.7 	actuarial assumption rate during this period, compounded
155.8 	annually, shall must be used for the purchase of shares on
155.9 	behalf of each employee in the accounts of the supplemental
155.10 	retirement fund established by section 11A.17. Any employer's
155.11 	contribution to amortize the deficit in the state employee's
155.12 	retirement fund shall not, however, be used for the purchase of
155.13 	shares.

155.14 	Sec. 34. Minnesota Statutes 2004, section 352D.05,
155.15 	subdivision 4, is amended to read:
155.16 		Subd. 4.Repayment of refund. (a) A participant in the
155.17 	unclassified program may repay regular refunds taken pursuant to 
155.18 	under section 352.22, as provided in section 352.23.
155.19 	(b) A participant in the unclassified program or an
155.20 	employee covered by the general plan who has withdrawn the value
155.21 	of the total shares may repay the refund taken and thereupon
155.22 	restore the service credit, rights and benefits forfeited by
155.23 	paying into the fund the amount refunded plus interest at an
155.24 	annual rate of 8.5 percent compounded annually from the date
155.25 	that the refund was taken until the date that the refund is
155.26 	repaid.  If the participant had withdrawn only the employee
155.27 	shares as permitted under prior laws, repayment shall must be
155.28 	pro rata. Payment shall 
155.29 	(c) Except as provided in section 356.441, the repayment of
155.30 	a refund under this section must be made in a lump sum.

155.31 	Sec. 35. Minnesota Statutes 2004, section 352D.085,
155.32 	subdivision 1, is amended to read:
155.33 		Subdivision 1.Combined service. Except as provided in
155.34 	section 356.30, 356.302, or 356.303,service under the
155.35 	unclassified program for which the employee has been credited
155.36 	with employee shares may be used for the limited purpose of
156.1 	qualifying for benefits under sections 352.115, 352.72,
156.2 	subdivision 1, 352.113, 354.44, 354.45, 354.48, and 354.60;
156.3 	provided such .  The service also may not be used to qualify for
156.4 	a disability benefit under section 352.113 or 354.48 if a
156.5 	participant was under the unclassified program at the time of
156.6 	the disability, and provided further that .  Also,the years of
156.7 	service and salary paid while the participant was in the
156.8 	unclassified program shall may not be used in determining the
156.9 	amount of benefits.

156.10 	Sec. 36. Minnesota Statutes 2004, section 352D.09,
156.11 	subdivision 5, is amended to read:
156.12 		Subd. 5.Unclaimed benefits.  If the beneficiary,
156.13 	surviving spouse or estate has not made application for benefits
156.14 	within ten years after the date of the death of a participant,
156.15 	the value of the shares shall be is appropriated to the regular 
156.16 	general state employees retirement fund and the provisions of
156.17 	section 352.12, subdivision 12shall ,govern.  If a former
156.18 	participant fails to make a claim for benefits within five years
156.19 	after the termination of covered service or by age 70, whichever
156.20 	is later, the value of the shares shall be is appropriated to
156.21 	the general state employees retirement fund and the provisions
156.22 	of section 352.22, subdivision 8, shall apply.

156.23 	Sec. 37. Minnesota Statutes 2004, section 352D.12, is
156.24 	amended to read:
156.25 	352D.12 TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.
156.26 	(a) An employee who is a participant in the unclassified
156.27 	program and who has prior service credit in a covered plan under
156.28 	chapters 3A,chapter 352, 352C,353, 354, 354A, and or 422A
156.29 	may, within the time limits specified in this section, elect to
156.30 	transfer to the unclassified program prior service contributions
156.31 	to one or more of those plans. Participants with six or more
156.32 	years of prior service credit in a plan governed by chapter 3A
156.33 	or 352C on July 1, 1998, may not transfer prior service
156.34 	contributions.  Participants with less than six years of prior
156.35 	service credit in a plan governed by chapter 3A or 352C on July
156.36 	1, 1998, must be contributing to the unclassified plan on or
157.1 	after January 5, 1999, in order to transfer prior contributions.
157.2 	(b) For participants with prior service credit in a plan
157.3 	governed by chapter 352, 353, 354, 354A, or 422A, "prior service
157.4 	contributions" means the accumulated employee and equal employer
157.5 	contributions with interest at an annual rate of 8.5 percent
157.6 	compounded annually, based on fiscal year balances. For
157.7 	participants with less than six years of service credit as of
157.8 	July 1, 1998, and with prior service credit in a plan governed
157.9 	by chapter 3A or 352C, "prior service contributions" means an
157.10 	amount equal to twice the amount of the accumulated member
157.11 	contributions plus annual compound interest at the rate of 8.5
157.12 	percent, computed on fiscal year balances.
157.13 	(c) If a participant has taken a refund from a retirement
157.14 	plan listed in this section, the participant may repay the
157.15 	refund to that plan, notwithstanding any restrictions on
157.16 	repayment to that plan, plus 8.5 percent interest compounded
157.17 	annually and have the accumulated employee and equal employer
157.18 	contributions transferred to the unclassified program with
157.19 	interest at an annual rate of 8.5 percent compounded annually
157.20 	based on fiscal year balances.  If a person repays a refund and
157.21 	subsequently elects to have the money transferred to the
157.22 	unclassified program, the repayment amount, including interest,
157.23 	is added to the fiscal year balance in the year which the
157.24 	repayment was made.
157.25 	(d) A participant electing to transfer prior service
157.26 	contributions credited to a retirement plan governed by chapter
157.27 	352, 353, 354, 354A, or 422A as provided under this section must
157.28 	complete the a written application for the transfer and repay
157.29 	any refund within one year of the commencement of the employee's
157.30 	participation in the unclassified program. A participant
157.31 	electing to transfer prior service contributions credited to a
157.32 	retirement plan governed by chapter 3A or 352C as provided under
157.33 	this section must complete the application for the transfer and
157.34 	repay any refund between January 5, 1999, and June 1, 1999, if
157.35 	the employee commenced participation in the unclassified program
157.36 	before January 5, 1999, or within one year of the commencement
158.1 	of the employee's participation in the unclassified program if
158.2 	the employee commenced participation in the unclassified program
158.3 	after January 4, 1999.

158.4 	Sec. 38. Minnesota Statutes 2004, section 353.01,
158.5 	subdivision 32, is amended to read:
158.6 		Subd. 32.Coordinated member.  "Coordinated member" means
158.7 	any a public employee, including any a public hospital employee,
158.8 	who is covered by any an agreement or modification made between
158.9 	the state and the Secretary of Health, Education and Welfare 
158.10 	Human Services, making the provisions of the federal Old Age,
158.11 	Survivors and Disability Insurance Act applicable to the member
158.12 	if the membership eligibility criteria are met under this
158.13 	chapter.  A coordinated member also is a former basic member who
158.14 	has a complete and continuous separation for at least 30 days
158.15 	from employment as a public employee meeting the requirements
158.16 	specified in subdivision 28, paragraphs (a) and (b), and who
158.17 	reenters public service as a public employee and meets the
158.18 	membership eligibility criteria under this chapter.

158.19 	Sec. 39. Minnesota Statutes 2004, section 353.01,
158.20 	subdivision 33, is amended to read:
158.21 		Subd. 33.Basic member.  "Basic member" means any a 
158.22 	public employee, including any a public hospital employee, who
158.23 	is not covered by any agreement or modification made between the
158.24 	state and the Secretary of Health, Education and Welfare Human
158.25 	Services.

158.26 	Sec. 40. Minnesota Statutes 2004, section 353.025, is
158.27 	amended to read:
158.28 	353.025 RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS.
158.29 	From and after January 1, 1982,Employees of the Range
158.30 	Association of Municipalities and Schools hereinafter referred
158.31 	to as the association, shall become are coordinated members of
158.32 	the general employees retirement plan of the Public Employees
158.33 	Retirement Association unless specifically exempt under section
158.34 	353.01, subdivision 2b, and .The Range Association shall be
158.35 	deemed to be of Municipalities and Schools is a governmental
158.36 	subdivision for the purposes of this chapter.

159.1 	Sec. 41. Minnesota Statutes 2004, section 353.026, is
159.2 	amended to read:
159.3 	353.026 COVERAGE FOR CERTAIN MUNICIPAL AND SCHOOL DISTRICT
159.4 	EMPLOYEES.
159.5 	Any person who was employed by the city of Minneapolis,
159.6 	Special School District No. 1, or public corporation as defined
159.7 	in section 422A.01, subdivision 9, on or after July 1, 1978,and
159.8 	prior to before July 1, 1979, and who was excluded from
159.9 	retirement coverage by the coordinated program of the
159.10 	Minneapolis municipal employees retirement fund pursuant to 
159.11 	under section 422A.09, subdivision 3, shall be is entitled to
159.12 	retirement coverage by the general employees retirement plan of
159.13 	the Public Employees Retirement Association unless specifically
159.14 	excluded pursuant to under section 353.01, subdivision 2b, from
159.15 	and after May 19, 1981.

159.16 	Sec. 42. Minnesota Statutes 2004, section 353.027, is
159.17 	amended to read:
159.18 	353.027 RETENTION OF COVERAGE FOR CERTAIN MUNICIPAL COURT
159.19 	EMPLOYEES.
159.20 	Any person employed on January 1, 1975, by a municipal
159.21 	court established pursuant to under Minnesota Statutes 1957,
159.22 	section 488.03,and located in the cities of New Brighton,
159.23 	Roseville, Maplewood, North Saint Paul, White Bear Lake,or St.
159.24 	Paul shall be is eligible for membership in the general
159.25 	employees retirement plan of the Public Employees Retirement
159.26 	Association and shall retain retains any rights or benefits the
159.27 	person had attained as a member of the general employees
159.28 	retirement plan of the association on January 1, 1975, so long
159.29 	as the person remains an employee of the municipal court of
159.30 	Ramsey County.

159.31 	Sec. 43. Minnesota Statutes 2004, section 353.028, is
159.32 	amended to read:
159.33 	353.028 CITY MANAGERS; ELECTION; DEFERRED COMPENSATION.
159.34 		Subdivision 1.Definitions. (a) For purposes of this
159.35 	section, each of the terms in this subdivision has the meaning
159.36 	indicated.
160.1 	(b) "City manager" means (1) a person who is duly appointed
160.2 	to and is holding the position of city manager in a Plan B
160.3 	statutory city or in a home rule city operating under the
160.4 	"council-manager" form of government, or (2) a person who is 
160.5 	appointed to and is holding the position of chief administrative
160.6 	officer of a home rule charter city or a statutory city pursuant
160.7 	to under a charter provision, ordinance, or resolution
160.8 	establishing such a position and prescribing its duties and
160.9 	responsibilities.
160.10 	(c) "Governing body" means the city council of the city
160.11 	employing the city manager.
160.12 	(d) "Election" means the election described in subdivision
160.13 	2.
160.14 		Subd. 2.Election. (a) A city manager may elect to be
160.15 	excluded from membership in the general employees retirement
160.16 	plan of the Public Employees Retirement Association.  The
160.17 	election of exclusion must be made within six months following
160.18 	the commencement of employment, must be made in writing on a
160.19 	form prescribed by the executive director, and must be approved
160.20 	by a resolution of adopted by the governing body of the city.
160.21 	The election of exclusion is not effective until it is filed
160.22 	with the executive director.  Membership of a city manager in
160.23 	the association general employees retirement plan ceases on the
160.24 	date the written election is received by the executive director
160.25 	or upon a later date specified.  Employee and employer
160.26 	contributions made on behalf of a person exercising the option
160.27 	to be excluded from membership under this section must be
160.28 	refunded in accordance with section 353.27, subdivision 7.
160.29 	(b) A city manager who has elected exclusion under this
160.30 	subdivision may elect to revoke that action by filing a written
160.31 	notice with the executive director.  The notice must be on a
160.32 	form prescribed by the executive director and must be approved
160.33 	by a resolution of the governing body of the city.  Membership
160.34 	of the city manager in the association resumes prospectively
160.35 	from the date of the first day of the pay period for which
160.36 	contributions were deducted or, if pay period coverage dates are
161.1 	not provided, the date on which the notice of revocation or
161.2 	contributions are received in the office of the association,
161.3 	provided that the notice of revocation is received by the
161.4 	association within 60 days of the receipt of contributions.
161.5 	(c) An election under paragraph (b) is irrevocable.  Any
161.6 	election under paragraph (a) or (b) must include a statement
161.7 	that the individual will not seek authorization to purchase
161.8 	service credit for any period of excluded service.
161.9 		Subd. 3.Deferred compensation; city contribution. If an
161.10 	election of exclusion is made, and if the city manager and the
161.11 	governing body of the city additionally agree in writing that
161.12 	the additional compensation is to be deferred and shall is to be
161.13 	contributed on behalf of the city manager to a deferred
161.14 	compensation program which meets the requirements of section 457
161.15 	of the Internal Revenue Code of 1954 1986, as amended through
161.16 	December 31, 1980, the governing body may compensate the city
161.17 	manager, in addition to the salary allowed under any limitation
161.18 	imposed on salaries by law or charter, in an amount equal to the
161.19 	employer contribution which would be required by section 353.27,
161.20 	subdivision 3, if the city manager were a member of the
161.21 	association general employees retirement plan.
161.22 		Subd. 4.Refunds; deferred annuity. A city manager who
161.23 	makes an election to be excluded from membership is entitled to
161.24 	a refund of accumulated deductions or, if otherwise qualified, a
161.25 	deferred annuity in the manner provided by under section 353.34,
161.26 	at the option of the manager.
161.27 		Subd. 5.Election; other employment. If a city manager
161.28 	who has made an election to be excluded subsequently accepts
161.29 	employment in another governmental subdivision or subsequently 
161.30 	accepts employment other than as a city manager in the same
161.31 	city, the election shall be deemed to have been is rescinded on
161.32 	the effective date of employment.

161.33 	Sec. 44. Minnesota Statutes 2004, section 353.14, is
161.34 	amended to read:
161.35 	353.14 BENEFITS FROM OTHER FUNDS.
161.36 	No annuity or benefit provided by this chapter shall may be
162.1 	affected, diminished, or impaired by any pension, benefit, or
162.2 	annuity which any member or survivor is entitled to receive from
162.3 	a tax supported public retirement plan or system authorized by
162.4 	any other law, for based on service that is different service
162.5 	than the service for which the member or survivor is entitled to
162.6 	receive benefit or annuity from a retirement plan administered
162.7 	by the Public Employees Retirement Association.

162.8 	Sec. 45. Minnesota Statutes 2004, section 353.15,
162.9 	subdivision 1, is amended to read:
162.10 		Subdivision 1.Exemption; exceptions. No money, annuity,
162.11 	or benefit provided for in this chapter is assignable or subject
162.12 	to execution, levy, attachment, garnishment, or legal process,
162.13 	except as provided in subdivision 2 or section 518.58, 518.581,
162.14 	or 518.6111.The provisions of section 356.401 apply to the
162.15 	general employees retirement plan, to the public employees
162.16 	police and fire retirement plan, and to the local government
162.17 	correctional service retirement plan.

162.18 	Sec. 46. Minnesota Statutes 2004, section 353.15,
162.19 	subdivision 3, is amended to read:
162.20 		Subd. 3.Payment to public bodies.  If,in the judgment
162.21 	of the executive director,conditions so warrant, payment of an
162.22 	annuity, a retirement benefit, or a refund may be made to a
162.23 	public body in behalf of an annuitant, disabilitant, or survivor
162.24 	upon such terms as the executive director may prescribe.

162.25 	Sec. 47. Minnesota Statutes 2004, section 353.27,
162.26 	subdivision 11, is amended to read:
162.27 		Subd. 11.Employers; required to furnish requested
162.28 	information. (a) All governmental subdivisions shall furnish
162.29 	promptly such other information relative to the employment
162.30 	status of all employees or former employees, including,but not
162.31 	limited to,payroll abstracts pertaining to all past and present
162.32 	employees, as may be requested by the association or its 
162.33 	executive director, including schedules of salaries applicable
162.34 	to various categories of employment.
162.35 	(b) In the event payroll abstract records have been lost or
162.36 	destroyed, for whatever reason or in whatever manner, so that
163.1 	such schedules of salaries cannot be furnished therefrom, the
163.2 	employing governmental subdivision, in lieu thereof, shall
163.3 	furnish to the association an estimate of the earnings of any
163.4 	employee or former employee for any period as may be requested
163.5 	by the association or its executive director. Should If the
163.6 	association receive such schedules is provided a schedule of
163.7 	estimated earnings, the executive director is hereby authorized
163.8 	to use the same as a basis for making whatever computations
163.9 	might be necessary for determining obligations of the employee
163.10 	and employer to the retirement fund.  If estimates are not
163.11 	furnished by the employer pursuant to at the request of the
163.12 	association or its executive director, the association executive
163.13 	director may estimate the obligations of the employee and
163.14 	employer to the retirement fund based upon such those records as 
163.15 	that are in its possession. Where payroll abstracts have been
163.16 	lost or destroyed, the governmental agency need not furnish any
163.17 	information pertaining to employment prior to July 1, 1963.  The
163.18 	association shall make no estimate of any obligation of any
163.19 	employee, former employee, or employer covering employment prior
163.20 	to July 1, 1963.

163.21 	Sec. 48. Minnesota Statutes 2004, section 353.271, is
163.22 	amended to read:
163.23 	353.271 PARTICIPATION IN MINNESOTA POSTRETIREMENT
163.24 	INVESTMENT FUND.
163.25 		Subdivision 1.Authorization. The general employees
163.26 	retirement plan of the Public Employees Retirement Association,
163.27 	including the public employees police and fire fund but
163.28 	excluding the various local relief association consolidation
163.29 	accounts, is retirement plan, and the local government
163.30 	correctional service retirement plan are authorized to
163.31 	participate in the Minnesota postretirement investment fund.
163.32 	There shall be is one general participation in the Minnesota
163.33 	postretirement investment fund for all purposes by each plan of 
163.34 	the Public Employees Retirement fund and one general
163.35 	participation in the Minnesota postretirement investment fund
163.36 	for all purposes by the public employees police and fire
164.1 	fund Association.
164.2 		Subd. 2.Valuation of assets; adjustment of benefits.
 164.3 	(1) (a) The required reserves for retirement annuities payable
164.4 	as provided in this chapter other than those payable from the
164.5 	various local relief association consolidation accounts, as
164.6 	determined in accordance with the appropriate mortality table
164.7 	adopted by the board of trustees based on the experience of the
164.8 	fund as recommended by the actuary retained by the Legislative
164.9 	Commission on Pensions and Retirement under section 356.214, and
164.10 	approved under section 356.215, subdivision 18, and using the
164.11 	postretirement interest assumption specified in section 356.215,
164.12 	subdivision 8, shall must be transferred to the Minnesota
164.13 	postretirement investment fund as of the last business day of
164.14 	the month in which the retirement annuity begins.
164.15 	(2) (b) Annuity payments other than those payable from the
164.16 	various local relief association consolidation accounts
164.17 	shall must be adjusted in accordance with the provisions of
164.18 	section 11A.18.
164.19 	(3) (c) Increases in payments pursuant to under this
164.20 	section or from the various local relief association
164.21 	consolidation accounts, if applicable, will must be made
164.22 	automatically unless the intended recipient files written notice
164.23 	with the executive director of the Public Employees Retirement
164.24 	Association requesting that the increase shall not be made.

164.25 	Sec. 49. Minnesota Statutes 2004, section 353.31,
164.26 	subdivision 1c, is amended to read:
164.27 		Subd. 1c.Coordinated members.  Except for benefits
164.28 	provided under section 353.32, subdivisions 1 and 1a,no
164.29 	survivor benefits are payable to the surviving spouse or
164.30 	dependent children of a deceased coordinated member.

164.31 	Sec. 50. Minnesota Statutes 2004, section 353.32,
164.32 	subdivision 9, is amended to read:
164.33 		Subd. 9.Payment to a minor.  If a member or former
164.34 	member dies having named as beneficiary a person who is a minor
164.35 	at the time of the application for refund, the board may make
164.36 	the payment (a) (1) directly to the minor, (b) (2) to any 
165.1 	a person who has legally qualified and is acting as guardian of
165.2 	the minor's person or property in any jurisdiction, or (c) (3) 
165.3 	to either parent of the minor or to any an adult person with
165.4 	whom the minor may at the time be living, provided only that .
165.5 	The parent or other person to whom any amount is to be
165.6 	paid shall have advised must advise the board in writing that
165.7 	the amount will be held or used in trust for the benefit of such
165.8 	minor.  Any annuity or disability benefit payable at the time of
165.9 	death of an annuitant or recipient of a disability benefit,
165.10 	which is payable to a beneficiary who is a minor, may be paid in
165.11 	the same manner. Such The payment shall be is a bar to recovery
165.12 	by any other person or persons.

165.13 	Sec. 51. Minnesota Statutes 2004, section 353.33,
165.14 	subdivision 12, is amended to read:
165.15 		Subd. 12.Basic disability survivor benefits.  If a basic
165.16 	member who is receiving a disability benefit under subdivision 3:
165.17 	(a) (1) dies before attaining age 65 or within five years
165.18 	of the effective date of the disability, whichever is later, the
165.19 	surviving spouse shall is entitled to receive a survivor benefit
165.20 	under section 353.31, unless the surviving spouse elected to
165.21 	receive a refund under section 353.32, subdivision 1.;
165.22 	(b) (2) is living at age 65 or five years after the
165.23 	effective date of the disability, whichever is later, the basic
165.24 	member may continue to receive a normal disability benefit, or
165.25 	elect a joint and survivor optional annuity under section
165.26 	353.31, subdivision 1b.  The election of the joint and survivor
165.27 	optional annuity must occur within 90 days of attaining age 65
165.28 	or of reaching the five-year anniversary of the effective date
165.29 	of the disability benefit, whichever is later.  The optional
165.30 	annuity takes effect on the first day of the month following the
165.31 	month in which the person attains age 65 or reaches the
165.32 	five-year anniversary of the effective date of the disability
165.33 	benefit, whichever is later.; or 
165.34 	(c) (3) if there is a dependent child or children under
165.35 	paragraph (a) or (b) clause (1) or (2), the association shall
165.36 	grant dependent child is entitled to a dependent child benefit
166.1 	under section 353.31, subdivision 1b, paragraph (b).

166.2 	Sec. 52. Minnesota Statutes 2004, section 354.091, is
166.3 	amended to read:
166.4 	354.091 SERVICE CREDIT.
166.5 	(a) In computing service credit, no teacher shall may 
166.6 	receive credit for more than one year of teaching service for
166.7 	any fiscal year. Commencing July 1, 1961 Additionally, in
166.8 	crediting allowable service:
166.9 	(1) if a teacher teaches less than five hours in a day,
166.10 	service credit must be given for the fractional part of the day
166.11 	as the term of service performed bears to five hours;
166.12 	(2) if a teacher teaches five or more hours in a day,
166.13 	service credit must be given for only one day;
166.14 	(3) if a teacher teaches at least 170 full days in any
166.15 	fiscal year, service credit must be given for a full year of
166.16 	teaching service; and
166.17 	(4) if a teacher teaches for only a fractional part of the
166.18 	year, service credit must be given for such fractional part of
166.19 	the year in the same relationship as the period of service
166.20 	performed bears to 170 days.
166.21 	(b) A teacher shall must receive a full year of service
166.22 	credit based on the number of days in the employer's full school
166.23 	year if it that school year is less than 170 days.  Teaching
166.24 	service performed before July 1, 1961, must be computed under
166.25 	the law in effect at the time it was performed.
166.26 	(c) A teacher must not lose or gain retirement service
166.27 	credit as a result of the employer converting to a flexible or
166.28 	alternate work schedule.  If the employer converts to a flexible
166.29 	or alternate work schedule, the forms for reporting teaching
166.30 	service and the procedures for determining service credit must
166.31 	be determined by the executive director with the approval of the
166.32 	board of trustees.
166.33 	(d) For all services rendered on or after July 1, 2003,
166.34 	service credit for all members employed by the Minnesota State
166.35 	Colleges and Universities system must be determined:
166.36 	(1) for full-time employees, by the definition of full-time
167.1 	employment contained in the collective bargaining agreement for
167.2 	those units listed in section 179A.10, subdivision 2, or
167.3 	contained in the applicable personnel or salary plan for those
167.4 	positions designated in section 179A.10, subdivision 1;
167.5 	(2) for part-time employees, by the appropriate proration
167.6 	of full-time equivalency based on the provisions contained in
167.7 	the collective bargaining agreement for those units listed in
167.8 	section 179A.10, subdivision 2, or contained in the applicable
167.9 	personnel or salary plan for those positions designated in
167.10 	section 179A.10, subdivision 1, and the applicable procedures of
167.11 	the Minnesota State Colleges and Universities system; and
167.12 	(3) in no case may a member receive more than one year of
167.13 	service credit for any fiscal year.

167.14 	Sec. 53. Minnesota Statutes 2004, section 354.10,
167.15 	subdivision 1, is amended to read:
167.16 		Subdivision 1.Exemption; exceptions. (a) The provisions
167.17 	of section 356.401 apply to the teachers retirement plan.
167.18 	(b) The right of a teacher to take advantage of the
167.19 	benefits provided by this chapter, is a personal right only and
167.20 	is not assignable.  All money to the credit of a teacher's
167.21 	account in the fund or any money payable to the teacher from the
167.22 	fund belongs to the state of Minnesota until actually paid to
167.23 	the teacher or a beneficiary under this chapter.
167.24 	(c) The association may acknowledge a properly completed
167.25 	power of attorney form. An assignment or attempted assignment
167.26 	of a teacher's interest in the fund, or of the beneficiary's
167.27 	interest in the fund, by a teacher or a beneficiary is void and
167.28 	exempt from garnishment or levy under attachment or execution,
167.29 	except as provided in subdivision 2 or 3, or section 518.58,
167.30 	518.581, or 518.6111.

167.31 	Sec. 54. Minnesota Statutes 2004, section 354.10,
167.32 	subdivision 3, is amended to read:
167.33 		Subd. 3.Payment to public bodies.  If,in the judgment
167.34 	of the executive director,conditions so warrant, payment of an
167.35 	annuity, a retirement benefit, or a refund may be made to a
167.36 	public body in behalf of an annuitant, disabilitant, or survivor
168.1 	upon such terms as the executive director may prescribe.

168.2 	Sec. 55. Minnesota Statutes 2004, section 354.10,
168.3 	subdivision 4, is amended to read:
168.4 		Subd. 4.Changes in designated beneficiaries. Any (a) A 
168.5 	beneficiary designated by a retiree or member under section
168.6 	354.05, subdivision 22, may be changed or revoked by the retiree
168.7 	or member on a form provided by the executive director.
168.8 	(b) A change or revocation made under this subdivision is
168.9 	valid only if the properly completed form is received by the
168.10 	association on or before the date of death of the retiree or the
168.11 	member.
168.12 	(c) If a designated beneficiary dies before the retiree or
168.13 	member designating the beneficiary,and a new beneficiary is not
168.14 	designated, the retiree's or member's estate is the beneficiary.

168.15 	Sec. 56. Minnesota Statutes 2004, section 354.33,
168.16 	subdivision 5, is amended to read:
168.17 		Subd. 5.Retirees not eligible for federal benefits.
 168.18 	Notwithstanding the provisions of section 354.55, subdivision 3,
168.19 	when any person retires after July 1, 1973,who (a) (1) has ten
168.20 	or more years of allowable service, and (b) (2) does not have
168.21 	any retroactive Social Security coverage by reason of the
168.22 	person's position in the retirement system, and (c) (3) does not
168.23 	qualify for federal old age and survivor primary benefits at the
168.24 	time of retirement, the annuity shall must be computed under
168.25 	section 354.44, subdivision 2,of the law in effect on June 30,
168.26 	1969, except that accumulations after June 30, 1957, shall must 
168.27 	be calculated using the same mortality table and interest
168.28 	assumption as are used to transfer the required reserves to the
168.29 	Minnesota postretirement investment fund.

168.30 	Sec. 57. Minnesota Statutes 2004, section 354.39, is
168.31 	amended to read:
168.32 	354.39 EFFECTIVE DATE; APPLICATION.
168.33 	After July 1, 1971, any A member of the Teachers Retirement
168.34 	Association who is employed in a new state university and or any 
168.35 	other new institutions institution of higher learning not
168.36 	included in any agreement or modification made between the state
169.1 	and the federal Secretary of Health, Education and Welfare Human
169.2 	Services, making the provisions of the federal Old Age and ,
169.3 	Survivors and Disability Insurance Act applicable to such
169.4 	members, shall must be covered under the provisions of this
169.5 	chapter applicable to coordinated members.

169.6 	Sec. 58. Minnesota Statutes 2004, section 354.41,
169.7 	subdivision 2, is amended to read:
169.8 		Subd. 2.Teachers.  Every teacher after June 30, 1957,in
169.9 	the service or entering the service of the state or one of its
169.10 	governmental subdivision subdivisions as a teacher, except
169.11 	persons specially specifically excluded, shall must become a
169.12 	member of the association by the acceptance of such employment.

169.13 	Sec. 59. Minnesota Statutes 2004, section 354.42, is
169.14 	amended by adding a subdivision to read:
169.15 		Subd. 1a.Teachers retirement fund. (a) Within the
169.16 	Teachers Retirement Association and the state treasury is
169.17 	created a special retirement fund, which must include all the
169.18 	assets of the Teachers Retirement Association and all revenue of
169.19 	the association.  The fund is the continuation of the fund
169.20 	established under Laws 1931, chapter 406, section 2,
169.21 	notwithstanding the repeal of Minnesota Statutes 1973, section
169.22 	354.42, subdivision 1, by Laws 1974, chapter 289, section 59.
169.23 	(b) The teachers retirement fund must be credited with all
169.24 	employee and employer contributions, all investment revenue and
169.25 	gains, and all other income authorized by law.
169.26 	(c) From the teachers retirement fund is appropriated the
169.27 	payments of annuities and benefits authorized by this chapter,
169.28 	the transfers to the Minnesota postretirement investment fund,
169.29 	and the reasonable and necessary expenses of administering the
169.30 	fund and the association.

169.31 	Sec. 60. Minnesota Statutes 2004, section 354.44,
169.32 	subdivision 2, is amended to read:
169.33 		Subd. 2.Computation of money purchase annuity. (a) The
169.34 	amount of retirement annuity is an amount equal to double the
169.35 	annuity which could be purchased by the member's accumulated
169.36 	deductions plus interest thereon.  The annuity shall must be
170.1 	determined by the member's age, sex, double the amount of
170.2 	accumulated deductions, double the amount of interest earned on
170.3 	the accumulated deductions, and the appropriate mortality tables
170.4 	and interest rates.  To determine the amount of the annuity for
170.5 	a basic member, the accumulated deductions prior to before July
170.6 	1, 1957, and the accumulated deductions subsequent to after July
170.7 	1, 1957, shall must be considered separately.
170.8 	(1) (b) For service rendered prior to before July 1, 1957,
170.9 	the accumulated deductions for any a member shall must be
170.10 	carried forward at a fixed amount which is shown credited to the
170.11 	member's account as of that date.  That fixed amount shall must 
170.12 	also include any payments in lieu of salary deductions which are
170.13 	to be made in the future and are were actually so made pursuant
170.14 	to under an agreement executed between the member and the board
170.15 	as authorized by section 354.50 or any other authorized payments
170.16 	made by the member to the fund.  The annuity granted with
170.17 	respect to the period shall must be determined as follows:
170.18 	(a) (1) the fixed amount of the accumulated deductions for
170.19 	the period including the interest credited on the amount as
170.20 	earned up to July 1, 1957.; and 
170.21 	(b) (2) annuity purchase rates based on the applicable
170.22 	mortality table established by the board and the interest rate
170.23 	assumption in effect prior to before July 1, 1957, in the case
170.24 	of basic members and an annuity purchase rate based on an
170.25 	appropriate annuity table of mortality established by the board
170.26 	as provided in section 354.07, subdivision 1, and using the
170.27 	applicable postretirement interest rate assumption specified in
170.28 	section 356.215, subdivision 8, in the case of coordinated
170.29 	members.
170.30 	(2) (c) For service rendered subsequent to after July 1,
170.31 	1957, the accumulated deductions for any a member shall must 
170.32 	consist of the amounts actually credited to the member's account
170.33 	by reason of salary deductions.  The annuity granted with
170.34 	respect to the period shall must be determined by the following:
170.35 	(a) (1) accumulated deductions for the period;
170.36 	(b) (2) interest credited on these accumulated deductions
171.1 	from July 1, 1957, to the date of retirement;
171.2 	(c) (3) interest credited on accumulated deductions
171.3 	including prior credited interest provided in paragraph (1) (b) 
171.4 	from July 1, 1957, to the date of retirement;
171.5 	(d) (4) after the amount available for an annuity granted
171.6 	with respect to the person is determined in accordance with the
171.7 	provisions of this subdivision, an additional amount equal to 20
171.8 	percent of the sum of clause (2)(a) (1) plus interest credited
171.9 	to members a member's account from July 1, 1957, to date of
171.10 	retirement is to be added.  This added amount is not to be
171.11 	doubled as provided for other amounts determined in this
171.12 	subdivision; and 
171.13 	(e) (5) the annuity purchase rate based on an appropriate
171.14 	annuity table of mortality established by the board as provided
171.15 	in section 354.07, subdivision 1, and using the applicable
171.16 	postretirement interest rate assumption specified in section
171.17 	356.215, subdivision 8.

171.18 	Sec. 61. Minnesota Statutes 2004, section 354A.021,
171.19 	subdivision 5, is amended to read:
171.20 		Subd. 5.Tax sheltered annuity program and fund. Any A 
171.21 	teachers retirement fund association may establish a tax
171.22 	sheltered annuity program and fund meeting the requirements of
171.23 	section 403(b) of the Internal Revenue Code of 1986, as amended
171.24 	through December 31, 1992, which shall must include all assets
171.25 	which were acquired for the specific purpose of being credited
171.26 	to the program and fund and to which shall must be credited all
171.27 	employee contributions,and employer contributions,if
171.28 	negotiated under a collective bargaining agreement, designated
171.29 	for this purpose and all interest income attributable to the
171.30 	assets of the program and fund.

171.31 	Sec. 62. Minnesota Statutes 2004, section 354A.097,
171.32 	subdivision 1, is amended to read:
171.33 		Subdivision 1.Service credit purchase authorized.  A
171.34 	teacher who has at least three years of allowable service credit
171.35 	with the teachers retirement fund association and who performed
171.36 	service in the United States armed forces before becoming a
172.1 	teacher as defined in section 354A.011, subdivision 27, or who
172.2 	failed to obtain service credit for a military leave of absence
172.3 	period under section 354A.093, is entitled to purchase allowable
172.4 	service credit for the initial period of enlistment, induction,
172.5 	or call to active duty without any voluntary extension by making
172.6 	payment under section 356.55 provided 356.551 if the teacher has
172.7 	not purchased service credit from another Minnesota defined
172.8 	benefit public employee pension plan for the same period of
172.9 	service.

172.10 	Sec. 63. Minnesota Statutes 2004, section 354A.31,
172.11 	subdivision 5, is amended to read:
172.12 		Subd. 5.Unreduced normal retirement annuity.  Upon
172.13 	retirement at normal retirement age with at least three years of
172.14 	service credit, a coordinated member shall be is entitled to a
172.15 	normal retirement annuity calculated pursuant to under 
172.16 	subdivision 4 or 4a, whichever applies.

172.17 	Sec. 64. [356.401] EXEMPTION FROM PROCESS.
172.18 		Subdivision 1.Exemption; exceptions. None of the money,
172.19 	annuities, or other benefits provided for in the governing law
172.20 	of a covered retirement plan is assignable either in law or in
172.21 	equity or subject to state estate tax, or to execution, levy,
172.22 	attachment, garnishment, or other legal process, except as
172.23 	provided in subdivision 2 or section 518.58, 518.581, or
172.24 	518.6111.
172.25 		Subd. 2.Automatic deposits. (a) The chief
172.26 	administrative officer of a covered retirement plan may remit,
172.27 	through an automatic deposit system, annuity, benefit, or refund
172.28 	payments only to a financial institution associated with the
172.29 	National Automated Clearinghouse Association or a comparable
172.30 	successor organization that is trustee for a person who is
172.31 	eligible to receive the annuity, benefit, or refund.
172.32 	(b) Upon the request of a retiree, disabilitant, survivor,
172.33 	or former member, the chief administrative officer of a covered
172.34 	retirement plan may remit the annuity, benefit, or refund check
172.35 	to the applicable financial institution for deposit in the
172.36 	person's individual account or the person's joint account.  An
173.1 	overpayment to a joint account after the death of the annuitant
173.2 	or benefit recipient must be repaid to the fund of the
173.3 	applicable covered retirement plan by the joint tenant if the
173.4 	overpayment is not repaid to that fund by the financial
173.5 	institution associated with the National Automated Clearinghouse
173.6 	Association or its successor.  The governing board of the
173.7 	covered retirement plan may prescribe the conditions under which
173.8 	these payments may be made.
173.9 		Subd. 3.Covered retirement plans. The provisions of
173.10 	this section apply to the following retirement plans:
173.11 	(1) the legislators retirement plan, established by chapter
173.12 	3A;
173.13 	(2) the general state employees retirement plan of the
173.14 	Minnesota State Retirement System, established by chapter 352;
173.15 	(3) the correctional state employees retirement plan of the
173.16 	Minnesota State Retirement System, established by chapter 352;
173.17 	(4) the State Patrol retirement plan, established by
173.18 	chapter 352B;
173.19 	(5) the elective state officers retirement plan,
173.20 	established by chapter 352C;
173.21 	(6) the unclassified state employees retirement program,
173.22 	established by chapter 352D;
173.23 	(7) the general employees retirement plan of the Public
173.24 	Employees Retirement Association, established by chapter 353;
173.25 	(8) the public employees police and fire plan of the Public
173.26 	Employees Retirement Association, established by chapter 353;
173.27 	(9) the public employees defined contribution plan,
173.28 	established by chapter 353D;
173.29 	(10) the local government correctional service retirement
173.30 	plan of the Public Employees Retirement Association, established
173.31 	by chapter 353E;
173.32 	(11) the Teachers Retirement Association, established by
173.33 	chapter 354;
173.34 	(12) the Duluth Teachers Retirement Fund Association,
173.35 	established by chapter 354A;
173.36 	(13) the Minneapolis Teachers Retirement Fund Association,
174.1 	established by chapter 354A;
174.2 	(14) the St. Paul Teachers Retirement Fund Association,
174.3 	established by chapter 354A;
174.4 	(15) the individual retirement account plan, established by
174.5 	chapter 354B;
174.6 	(16) the higher education supplemental retirement plan,
174.7 	established by chapter 354C;
174.8 	(17) the Minneapolis employees retirement fund, established
174.9 	by chapter 422A;
174.10 	(18) the Minneapolis Police Relief Association, established
174.11 	by chapter 423B;
174.12 	(19) the Minneapolis Firefighters Relief Association,
174.13 	established by chapter 423C; and 
174.14 	(20) the judges' retirement fund, established by sections
174.15 	490.121 to 490.132.

174.16 	Sec. 65. Minnesota Statutes 2004, section 356.551, is
174.17 	amended to read:
174.18 	356.551 POST JULY 1, 2003 2004, PRIOR SERVICE CREDIT
174.19 	PURCHASE PAYMENT AMOUNT DETERMINATION PROCEDURE.
174.20 		Subdivision 1.Application. (a) Unless the prior service
174.21 	credit purchase authorization special law or general statute
174.22 	provision explicitly specifies a different purchase payment
174.23 	amount determination procedure, and if section 356.55 has
174.24 	expired,this section governs the determination of the prior
174.25 	service credit purchase payment amount of any prior service
174.26 	credit purchase.
174.27 	(b) The purchase payment amount determination procedure
174.28 	must recognize any service credit accrued to the purchaser in a
174.29 	pension plan enumerated in section 356.30, subdivision 3.
174.30 	(c) Any service credit in a Minnesota defined benefit
174.31 	public employee pension plan available to be reinstated by the
174.32 	purchaser through the repayment of a refund of member or
174.33 	employee contributions previously received must be repaid in
174.34 	full before any purchase of prior service credit payment is made
174.35 	under this section.
174.36 		Subd. 2.Determination. (a) Unless the minimum purchase
175.1 	amount set forth in paragraph (c) applies,the prior service
175.2 	credit purchase amount is an amount equal to the actuarial
175.3 	present value, on the date of payment, as calculated by the
175.4 	chief administrative officer of the pension plan and reviewed by
175.5 	the actuary retained by the Legislative Commission on Pensions
175.6 	and Retirement under section 356.214, of the amount of the
175.7 	additional retirement annuity obtained by the acquisition of the
175.8 	additional service credit in this section.
175.9 	(b) Calculation of this amount must be made using the
175.10 	preretirement interest rate applicable to the public pension
175.11 	plan specified in section 356.215, subdivision 4d 8, and the
175.12 	mortality table adopted for the public pension plan.  The
175.13 	calculation must assume continuous future service in the public
175.14 	pension plan until, and retirement at, the age at which the
175.15 	minimum requirements of the fund for normal retirement or
175.16 	retirement with an annuity unreduced for retirement at an early
175.17 	age, including section 356.30, are met with the additional
175.18 	service credit purchased.  The calculation must also assume a
175.19 	full-time equivalent salary, or actual salary, whichever is
175.20 	greater, and a future salary history that includes annual salary
175.21 	increases at the applicable salary increase rate for the plan
175.22 	specified in section 356.215, subdivision 4d.
175.23 	(c) The prior service credit purchase amount may not be
175.24 	less than the amount determined by applying the current employee
175.25 	or member contribution rate, the employer contribution rate, and
175.26 	the additional employer contribution rate, if any, to the
175.27 	person's current annual salary and multiplying that result by
175.28 	the number of whole and fraction years of service to be
175.29 	purchased.
175.30 	(d) Payment must be made in one lump sum within one year of
175.31 	the prior service credit authorization.  Payment of the amount
175.32 	calculated under this section must be made by the applicable
175.33 	eligible person.
175.34 	(e) However, the current employer or the prior employer
175.35 	may, at its discretion, pay all or any portion of the payment
175.36 	amount that exceeds an amount equal to the employee contribution
176.1 	rates in effect during the period or periods of prior service
176.2 	applied to the actual salary rates in effect during the period
176.3 	or periods of prior service, plus interest at the rate of 8.5
176.4 	percent a year compounded annually from the date on which the
176.5 	contributions would otherwise have been made to the date on
176.6 	which the payment is made.  If the employer agrees to payments
176.7 	under this subdivision, the purchaser must make the employee
176.8 	payments required under this subdivision within 290 90 days of
176.9 	the prior service credit authorization.  If that employee
176.10 	payment is made, the employer payment under this subdivision
176.11 	must be remitted to the chief administrative officer of the
176.12 	public pension plan within 60 days of receipt by the chief
176.13 	administrative officer of the employee payments specified under
176.14 	this subdivision.
176.15 		Subd. 3.Documentation. The prospective prior service
176.16 	credit purchaser must provide any relevant documentation
176.17 	required by the chief administrative officer of the applicable 
176.18 	public pension plan to determine eligibility for the prior
176.19 	service credit under this section.
176.20 		Subd. 4.Payment precondition for credit grant. Service
176.21 	credit for the purchase period must be granted by the public
176.22 	pension plan to the purchaser upon receipt of the full purchase
176.23 	payment amount specified in subdivision 2.

176.24 	Sec. 66. Minnesota Statutes 2004, section 356A.06,
176.25 	subdivision 7, is amended to read:
176.26 		Subd. 7.Expanded list of authorized investment
176.27 	securities.  (a)  [AUTHORITY.] Except to the extent otherwise
176.28 	authorized by law or bylaws, a covered pension plan not
176.29 	described by subdivision 6, paragraph (a), may invest its assets
176.30 	only in accordance with this subdivision.
176.31 	(b)  [SECURITIES GENERALLY.] The covered pension plan has
176.32 	the authority to purchase, sell, lend, or exchange the
176.33 	securities specified in paragraphs (c) to (g), including puts
176.34 	and call options and future contracts traded on a contract
176.35 	market regulated by a governmental agency or by a financial
176.36 	institution regulated by a governmental agency.  These
177.1 	securities may be owned as units in commingled trusts that own
177.2 	the securities described in paragraphs (c) to (g).
177.3 	(c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may
177.4 	invest funds in governmental bonds, notes, bills, mortgages, and
177.5 	other evidences of indebtedness provided the issue is backed by
177.6 	the full faith and credit of the issuer or the issue is rated
177.7 	among the top four quality rating categories by a nationally
177.8 	recognized rating agency.  The obligations in which funds may be
177.9 	invested under this paragraph include guaranteed or insured
177.10 	issues of (1) the United States, its agencies, its
177.11 	instrumentalities, or organizations created and regulated by an
177.12 	act of Congress; (2) Canada and its provinces, provided the
177.13 	principal and interest is payable in United States dollars; (3)
177.14 	the states and their municipalities, political subdivisions,
177.15 	agencies, or instrumentalities; (4) the International Bank for
177.16 	Reconstruction and Development, the Inter-American Development
177.17 	Bank, the Asian Development Bank, the African Development Bank,
177.18 	or any other United States government sponsored organization of
177.19 	which the United States is a member, provided the principal and
177.20 	interest is payable in United States dollars.
177.21 	(d)  [CORPORATE OBLIGATIONS.] The covered pension plan may
177.22 	invest funds in bonds, notes, debentures, transportation
177.23 	equipment obligations, or any other longer term evidences of
177.24 	indebtedness issued or guaranteed by a corporation organized
177.25 	under the laws of the United States or any state thereof, or the
177.26 	Dominion of Canada or any province thereof if they conform to
177.27 	the following provisions:
177.28 	(1) the principal and interest of obligations of
177.29 	corporations incorporated or organized under the laws of the
177.30 	Dominion of Canada or any province thereof must be payable in
177.31 	United States dollars; and
177.32 	(2) obligations must be rated among the top four quality
177.33 	categories by a nationally recognized rating agency.
177.34 	(e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may
177.35 	invest funds in bankers acceptances, certificates of deposit,
177.36 	deposit notes, commercial paper, mortgage participation
178.1 	certificates and pools, asset backed securities, repurchase
178.2 	agreements and reverse repurchase agreements, guaranteed
178.3 	investment contracts, savings accounts, and guaranty fund
178.4 	certificates, surplus notes, or debentures of domestic mutual
178.5 	insurance companies if they conform to the following provisions:
178.6 	(i) bankers acceptances and deposit notes of United States
178.7 	banks are limited to those issued by banks rated in the highest
178.8 	four quality categories by a nationally recognized rating
178.9 	agency;
178.10 	(ii) certificates of deposit are limited to those issued by
178.11 	(A) United States banks and savings institutions that are rated
178.12 	in the highest four quality categories by a nationally
178.13 	recognized rating agency or whose certificates of deposit are
178.14 	fully insured by federal agencies; or (B) credit unions in
178.15 	amounts up to the limit of insurance coverage provided by the
178.16 	National Credit Union Administration;
178.17 	(iii) commercial paper is limited to those issued by United
178.18 	States corporations or their Canadian subsidiaries and rated in
178.19 	the highest two quality categories by a nationally recognized
178.20 	rating agency;
178.21 	(iv) mortgage participation or pass through certificates
178.22 	evidencing interests in pools of first mortgages or trust deeds
178.23 	on improved real estate located in the United States where the
178.24 	loan to value ratio for each loan as calculated in accordance
178.25 	with section 61A.28, subdivision 3, does not exceed 80 percent
178.26 	for fully amortizable residential properties and in all other
178.27 	respects meets the requirements of section 61A.28, subdivision
178.28 	3;
178.29 	(v) collateral for repurchase agreements and reverse
178.30 	repurchase agreements is limited to letters of credit and
178.31 	securities authorized in this section;
178.32 	(vi) guaranteed investment contracts are limited to those
178.33 	issued by insurance companies or banks rated in the top four
178.34 	quality categories by a nationally recognized rating agency or
178.35 	to alternative guaranteed investment contracts where the
178.36 	underlying assets comply with the requirements of this
179.1 	subdivision;
179.2 	(vii) savings accounts are limited to those fully insured
179.3 	by federal agencies; and
179.4 	(viii) asset backed securities must be rated in the top
179.5 	four quality categories by a nationally recognized rating agency.
179.6 	(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do
179.7 	not apply to certificates of deposit and collateralization
179.8 	agreements executed by the covered pension plan under clause
179.9 	(1), item (ii).
179.10 	(3) In addition to investments authorized by clause (1),
179.11 	item (iv), the covered pension plan may purchase from the
179.12 	Minnesota Housing Finance Agency all or any part of a pool of
179.13 	residential mortgages, not in default, that has previously been
179.14 	financed by the issuance of bonds or notes of the agency.  The
179.15 	covered pension plan may also enter into a commitment with the
179.16 	agency, at the time of any issue of bonds or notes, to purchase
179.17 	at a specified future date, not exceeding 12 years from the date
179.18 	of the issue, the amount of mortgage loans then outstanding and
179.19 	not in default that have been made or purchased from the
179.20 	proceeds of the bonds or notes.  The covered pension plan may
179.21 	charge reasonable fees for any such commitment and may agree to
179.22 	purchase the mortgage loans at a price sufficient to produce a
179.23 	yield to the covered pension plan comparable, in its judgment,
179.24 	to the yield available on similar mortgage loans at the date of
179.25 	the bonds or notes.  The covered pension plan may also enter
179.26 	into agreements with the agency for the investment of any
179.27 	portion of the funds of the agency.  The agreement must cover
179.28 	the period of the investment, withdrawal privileges, and any
179.29 	guaranteed rate of return.
179.30 	(f)  [CORPORATE STOCKS.] The covered pension plan may
179.31 	invest funds in stocks or convertible issues of any corporation
179.32 	organized under the laws of the United States or the states
179.33 	thereof, the Dominion of Canada or its provinces, or any
179.34 	corporation listed on the New York Stock Exchange or the
179.35 	American Stock Exchange, if they conform to the following
179.36 	provisions:
180.1 	(1) the aggregate value of corporate stock investments, as
180.2 	adjusted for realized profits and losses, must not exceed 85
180.3 	percent of the market or book value, whichever is less, of a
180.4 	fund, less the aggregate value of investments according to
180.5 	subdivision 6 paragraph (g);
180.6 	(2) investments must not exceed five percent of the total
180.7 	outstanding shares of any one corporation.
180.8 	(g)  [OTHER INVESTMENTS.] (1) In addition to the
180.9 	investments authorized in paragraphs (b) to (f), and subject to
180.10 	the provisions in clause (2), the covered pension plan may
180.11 	invest funds in:
180.12 	(i) venture capital investment businesses through
180.13 	participation in limited partnerships and corporations;
180.14 	(ii) real estate ownership interests or loans secured by
180.15 	mortgages or deeds of trust through investment in limited
180.16 	partnerships, bank sponsored collective funds, trusts, and
180.17 	insurance company commingled accounts, including separate
180.18 	accounts;
180.19 	(iii) regional and mutual funds through bank sponsored
180.20 	collective funds and open-end investment companies registered
180.21 	under the Federal Investment Company Act of 1940;
180.22 	(iv) resource investments through limited partnerships,
180.23 	private placements, and corporations; and
180.24 	(v) international securities.
180.25 	(2) The investments authorized in clause (1) must conform
180.26 	to the following provisions:
180.27 	(i) the aggregate value of all investments made according
180.28 	to clause (1) may not exceed 35 percent of the market value of
180.29 	the fund for which the covered pension plan is investing;
180.30 	(ii) there must be at least four unrelated owners of the
180.31 	investment other than the state board covered pension plan for
180.32 	investments made under clause (1), item (i), (ii), (iii), or
180.33 	(iv);
180.34 	(iii) covered pension plan participation in an investment
180.35 	vehicle is limited to 20 percent thereof for investments made
180.36 	under clause (1), item (i), (ii), (iii), or (iv); and
181.1 	(iv) covered pension plan participation in a limited
181.2 	partnership does not include a general partnership interest or
181.3 	other interest involving general liability.  The covered pension
181.4 	plan may not engage in any activity as a limited partner which
181.5 	creates general liability.

181.6 	Sec. 67. Minnesota Statutes 2004, section 422A.01,
181.7 	subdivision 11, is amended to read:
181.8 		Subd. 11.Employee.  "Employee" means any a person who is 
181.9 	not exempted from the contributing class pursuant to under 
181.10 	section 422A.09, subdivision 3, who is was employed before July
181.11 	1, 1979,by and paid, in whole or in part, by the city or any of
181.12 	its boards, departments, or commissions, operated as a
181.13 	department of city government or independently if financed in
181.14 	whole or in part by city funds, including any a person who was 
181.15 	employed by a public corporation as herein defined, and
181.16 	including any a person who was employed before July 1, 1979,by
181.17 	Special School District No. 1, and who is not a member of any
181.18 	other retirement system, and also including any a person who
181.19 	is was employed before July 1, 1973,by the county of Hennepin,
181.20 	who was entitled by law to elect and has elected to retain
181.21 	membership in the municipal Minneapolis Employees Retirement
181.22 	Fund and who makes any required member contributions to the fund
181.23 	and who remains so employed.

181.24 	Sec. 68. Minnesota Statutes 2004, section 422A.06,
181.25 	subdivision 7, is amended to read:
181.26 		Subd. 7.Disability benefit fund.  (a) The required
181.27 	reserves for disability allowances which become effective after
181.28 	December 31, 1973, shall be transferred from the deposit
181.29 	accumulation fund to the A disability benefit fund is
181.30 	established, containing the required reserves for disability
181.31 	allowances under this chapter.  A proportionate share of income
181.32 	from investments shall must be allocated to this fund.
181.33 	There shall must be paid from this fund the disability
181.34 	allowances which become effective after December 31, 1973 
181.35 	payable under this chapter.
181.36 	(b) In the event of the termination of any disability
182.1 	allowance for any reason other than the death of the recipient,
182.2 	the balance of the required reserves for the disability
182.3 	allowance as of the date of the termination shall must be
182.4 	transferred from the disability benefit fund to the deposit
182.5 	accumulation fund.
182.6 	(c) At the end of each fiscal year, as part of the annual
182.7 	actuarial valuation, a determination shall must be made of the
182.8 	required reserves for all disability allowances being paid from
182.9 	the disability benefit fund.  Any excess of assets over
182.10 	actuarial required reserves in the disability benefit fund shall 
182.11 	must be transferred to the deposit accumulation fund.  Any
182.12 	excess of actuarial reserves over assets in the disability
182.13 	benefit fund shall must be funded by a transfer of the
182.14 	appropriate amount of assets from the deposit accumulation fund.

182.15 	Sec. 69. Minnesota Statutes 2004, section 422A.10,
182.16 	subdivision 1, is amended to read:
182.17 		Subdivision 1.member contribution rate ; deductions. (a) 
182.18 	There shall must be deducted and withheld from the basic salary,
182.19 	pay or compensation of each employee in the contributing class,
182.20 	prior to January 1, 1980 an amount equal to 7-1/4 percent, after
182.21 	December 31, 1979 but prior to January 1, 1981 an amount equal
182.22 	to 8-1/4 percent and after December 31, 1980 an amount equal to
182.23 	9-1/4 percent of such salary, pay or compensation, except as
182.24 	hereinafter provided.
182.25 	(b) The retirement board may increase the percentage rate
182.26 	of contribution to the retirement fund of any employee or
182.27 	employees for the purpose of establishing and maintaining on an
182.28 	actuarial basis a plan of insurance, survivors' benefits, or
182.29 	other type of benefit or benefits, the cost of which shall must 
182.30 	be paid out of such extra percentage so authorized and deducted
182.31 	from the employee's compensation, except as hereinafter
182.32 	provided.  Any plan or plans so established and placed in
182.33 	operation may be amended from time to time, or may be abandoned,
182.34 	but if abandoned, any surplus remaining from the operation of a
182.35 	plan shall must be the property of the fund, and shall must be
182.36 	credited to the reserve for loss in investment account.

183.1 	Sec. 70. Minnesota Statutes 2004, section 422A.10,
183.2 	subdivision 2, is amended to read:
183.3 		Subd. 2.consent to deductions mandatory member
183.4 	contributions.  Every employee to whom sections 422A.01 to
183.5 	422A.25 this chapter applies who shall continue in the service
183.6 	after the passage of Laws 1919, chapter 522, as well as every
183.7 	person to whom sections 422A.01 to 422A.25 applies who may
183.8 	hereafter be appointed to a position or place, shall be is 
183.9 	deemed to consent and agree to the deductions made and provided
183.10 	for herein, and payment with such reductions, for service, shall
183.11 	be are a full and complete discharge and acquittance of all
183.12 	claims and demands for all services rendered by such person
183.13 	during the period covered by such payment; except the person's
183.14 	claim to the benefits to which the person may be entitled under
183.15 	the provisions of sections 422A.01 to 422A.25this chapter.

183.16 	Sec. 71. Minnesota Statutes 2004, section 422A.22,
183.17 	subdivision 1, is amended to read:
183.18 		Subdivision 1.Retention; transfer. (a) If an employee
183.19 	to whom sections 422A.01 to 422A.25this chapter applies becomes
183.20 	absolutely separated from the active service prior to before 
183.21 	attaining the minimum retirement age established in section
183.22 	422A.13, the employee is entitled to a refund of the net
183.23 	accumulated amount of deduction from salary, pay, or
183.24 	compensation, made for the purpose of accumulating a fund from
183.25 	which to pay retirement allowances, shall be returned to such
183.26 	employee,with interest at the annual compound rate of six
183.27 	percent.
183.28 	(b) Any contributing employee who separates from a
183.29 	department, board or commission of the city whose employees are
183.30 	covered by a fund organized under sections 422A.01 to 422A.25
183.31 	this chapter, and becomes an employee of a department or board
183.32 	of the same city, whose employees are covered by a retirement
183.33 	fund or relief association by whatever name known, organized
183.34 	under any other law and supported in whole or in part by taxes
183.35 	on the same city, shall have has the option of:
183.36 	(1) retaining their membership in the fund organized under
184.1 	sections 422A.01 to 422A.25this chapter, regardless of the
184.2 	provisions of any law, rule, bylaw or other action requiring
184.3 	membership in any other retirement fund or relief association
184.4 	however organized.; or 
184.5 	(2) transferring to the fund or association covering the
184.6 	employees of the department or board to which they are
184.7 	transferring, providing they are eligible for membership therein.
184.8 	(c) Any contributing employee who elects to transfer to
184.9 	another fund or association as herein provided in paragraph (b),
184.10 	clause (2), shall must make such election within one year from
184.11 	the date of separation from the city service covered by this
184.12 	fund.  If the contributing employee elects to transfer to
184.13 	another fund as herein provided, the employee is entitled to a
184.14 	refund of the net accumulated contributions made by such
184.15 	employee to the fund organized under sections 422A.01 to
184.16 	422A.25, shall be returned to the employee this chapter with
184.17 	interest at the annual compound rate of six percent.

184.18 	Sec. 72. Minnesota Statutes 2004, section 422A.22,
184.19 	subdivision 3, is amended to read:
184.20 		Subd. 3.Limitation on eligibility.  No employee of the
184.21 	city shall be is eligible to be a member of,or receive benefits
184.22 	from,more than one retirement plan or fund of the city for the
184.23 	same period of service.

184.24 	Sec. 73. Minnesota Statutes 2004, section 422A.22,
184.25 	subdivision 4, is amended to read:
184.26 		Subd. 4.Death-while-active refund.  (a) Upon the death
184.27 	of an active member prior to before the employee's termination
184.28 	of active service, there shall be paid to the beneficiary or
184.29 	beneficiaries designated by the member on a form specified by
184.30 	the executive director and filed with the retirement board,are
184.31 	entitled to receive the net accumulated employee deductions from
184.32 	salary, pay, or compensation, including interest under
184.33 	subdivision 1, paragraph (a),compounded annually to the date of
184.34 	the member's death.  The amount must not include any
184.35 	contributions made by the employee or on the employee's behalf,
184.36 	or any interest or investment earnings on those contributions,
185.1 	which were allocated to the survivor benefit fund under section
185.2 	422A.06, subdivision 6.
185.3 	(b) If the employee fails to make a designation, or if the
185.4 	beneficiary or beneficiaries designated by the employee
185.5 	predeceases the employee, the benefit specified in paragraph (a)
185.6 	must be paid to the deceased employee's estate is entitled to
185.7 	the benefit specified in paragraph (a).
185.8 	(c) A benefit payable under this subdivision is in addition
185.9 	to any applicable survivor benefit under section 422A.23.

185.10 	Sec. 74. Minnesota Statutes 2004, section 422A.22,
185.11 	subdivision 6, is amended to read:
185.12 		Subd. 6.Refund; municipal employees retirement fund.
 185.13 	Any A person who has received a refund from the municipal 
185.14 	Minneapolis Employees Retirement Fund, and who is a member of a
185.15 	public retirement system included in section 422A.16,
185.16 	subdivision 8, may repay such refund with interest at a compound
185.17 	annual rate of 8.5 percent to the municipal Minneapolis 
185.18 	Employees Retirement Fund.  If a refund is repaid to the fund
185.19 	and if more than one refund has been received from the fund, all
185.20 	refunds must be repaid.  Repayment shall must be made as
185.21 	provided in sections 422A.01 to 422A.25this chapter.

185.22 	Sec. 75. Minnesota Statutes 2004, section 422A.231, is
185.23 	amended to read:
185.24 	422A.231 COST ALLOCATION.
185.25 	(a) Notwithstanding any law to the contrary, all current
185.26 	and future contribution requirements due to this article are
185.27 	payable by the participating contributing employing units other
185.28 	than the state of Minnesota.
185.29 	(b) In each actuarial valuation of the retirement fund, the
185.30 	actuary retained by the Legislative Commission on Pensions and
185.31 	Retirement under section 356.214shall include an exhibit on the
185.32 	impact of the benefit increases contained in this article on the
185.33 	survivor benefit fund.  The actuary shall calculate the expected
185.34 	change in the present value of the future benefits payable from
185.35 	the survivor benefit fund attributable to this article, using
185.36 	the actuarial method and assumptions applicable to the
186.1 	Minneapolis Employees Retirement Fund, from the prior actuarial
186.2 	valuation and shall compare that result with the actual change
186.3 	in the present value of future benefits payable from the
186.4 	survivor benefit fund attributable to this article from the
186.5 	prior actuarial valuation.
186.6 	(c) The executive director shall assess each participating
186.7 	employer, other than the state of Minnesota, its proportional
186.8 	share of the net increase amount calculated under paragraph
186.9 	(b).  The assessment must be made on the first business day of
186.10 	the following February, plus compound interest at an annual rate
186.11 	of six percent on the amount from the actuarial valuation date
186.12 	to the date of payment.

186.13 	Sec. 76. Minnesota Statutes 2004, section 422A.24, is
186.14 	amended to read:
186.15 	422A.24 ALLOWANCES NOT ASSIGNABLE OR SUBJECT TO PROCESS.
186.16 	No money payable pursuant to this chapter shall be
186.17 	assignable either in law or equity or be subject to execution,
186.18 	levy, attachment, garnishment, or other legal process, except as
186.19 	provided in section 518.58, 518.581, or 518.6111, nor shall any
186.20 	of the proceeds of payments due pursuant to this chapter be
186.21 	subject to the inheritance tax provisions of this state upon
186.22 	transfer to a surviving spouse or minor or dependent child of
186.23 	the decedent or a trust for their benefit.The provisions of
186.24 	section 356.401 apply to the Minneapolis employees retirement
186.25 	plan.

186.26 	Sec. 77. Minnesota Statutes 2004, section 423B.17, is
186.27 	amended to read:
186.28 	423B.17 PAYMENTS EXEMPT FROM PROCESS.
186.29 	A payment made by the association under a provision of
186.30 	sections 423B.01 to 423B.18, as amended, is exempt from legal
186.31 	process except as provided in section 518.58, 518.581, or
186.32 	518.6111.  No person entitled to a payment may assign the same.
186.33 	The association may not recognize an assignment or pay a sum on
186.34 	account of an assignment.The provisions of section 356.401
186.35 	apply to the Minneapolis Police Relief Association.

186.36 	Sec. 78. Minnesota Statutes 2004, section 423C.09, is
187.1 	amended to read:
187.2 	423C.09 PAYMENTS EXEMPT FROM PROCESS.
187.3 	All payments made, or to be made, by the association under
187.4 	this chapter shall be totally exempt from garnishment,
187.5 	execution, or other legal process, except as provided in section
187.6 	518.58, 518.581, or 518.6111.  No person entitled to a payment
187.7 	shall have the right to assign the name, nor shall the
187.8 	association have authority to recognize any assignment or to pay
187.9 	any sum on account thereof.  Any attempt to transfer any right
187.10 	or claim, or any part thereof, shall be void.The provisions of
187.11 	section 356.401 apply to the Minneapolis Firefighters Relief
187.12 	Association.

187.13 	Sec. 79. Minnesota Statutes 2004, section 490.126,
187.14 	subdivision 5, is amended to read:
187.15 		Subd. 5.Exemption from process; no assignment. None of
187.16 	the money, annuities, or other benefits provided in this chapter
187.17 	is assignable either in law or equity or is subject to
187.18 	execution, levy, attachment, garnishment, or other legal
187.19 	process, except as provided in section 518.58, 518.581, or
187.20 	518.6111.The provisions of section 356.401 apply to the judges
187.21 	retirement plan.

187.22 	Sec. 80. REVISOR'S INSTRUCTION.
 187.23 	In the next edition and subsequent editions of Minnesota
187.24 	Statutes, the revisor of statutes shall replace the reference to
187.25 	"sections 422A.01 to 422A.25" with the reference to "this
187.26 	chapter" wherever the reference appears in Minnesota Statutes,
187.27 	chapter 422A.

187.28 	Sec. 81. REPEALER.
 187.29 	(a) Minnesota Statutes 2004, section 352.119, subdivision
187.30 	1, is repealed.
187.31 	(b) Minnesota Statutes 2004, sections 353.34, subdivision
187.32 	3b; 353.36, subdivisions 2, 2a, 2b, and 2c; 353.46, subdivision
187.33 	4; 353.663; 353.74; and 353.75, are repealed.
187.34 	(c) Minnesota Statutes 2004, section 354.59, is repealed.
187.35 	(d) Minnesota Statutes 2004, sections 422A.22, subdivisions
187.36 	2 and 5; and 422A.221, are repealed.
188.1 	(e) Minnesota Statutes 2004, sections 352.15, subdivision
188.2 	1a; 353.15, subdivision 2; and 354.10, subdivision 2, are
188.3 	repealed.

188.4 	Sec. 82. EFFECTIVE DATE.
 188.5 	(a) Sections 1 to 73 and 75 to 81 are effective July 1,
188.6 	2005.
188.7 	(b) Section 74 is effective January 1, 2006.
188.8 	(c) Sections 1, 21, 22, 23, 29, 45, 46, 53, 64, 76, 77, 78,
188.9 	79, and 81, paragraph (e), do not apply to any cause of action
188.10 	that is proceeding on the date of enactment or to any cause of
188.11 	action for which the applicable statute of limitations has not
188.12 	expired as of the date of enactment.

188.13 	ARTICLE 13
188.14 	LOCAL RETIREMENT PLANS

188.15 	Section 1. Minnesota Statutes 2004, section 69.77,
188.16 	subdivision 4, is amended to read:
188.17 		Subd. 4.Relief association financial requirements;
188.18 	minimum municipal obligation.  (a) The officers of the relief
188.19 	association shall determine the financial requirements of the
188.20 	relief association and minimum obligation of the municipality
188.21 	for the following calendar year in accordance with the
188.22 	requirements of this subdivision.  The financial requirements of
188.23 	the relief association and the minimum obligation of the
188.24 	municipality must be determined on or before the submission date
188.25 	established by the municipality under subdivision 5.
188.26 	(b) The financial requirements of the relief association
188.27 	for the following calendar year must be based on the most recent
188.28 	actuarial valuation or survey of the special fund of the
188.29 	association if more than one fund is maintained by the
188.30 	association, or of the association, if only one fund is
188.31 	maintained, prepared in accordance with sections 356.215,
188.32 	subdivisions 4 to 15, and 356.216, as required under subdivision
188.33 	10.  If an actuarial estimate is prepared by the actuary of the
188.34 	relief association as part of obtaining a modification of the
188.35 	benefit plan of the relief association and the modification is
188.36 	implemented, the actuarial estimate must be used in calculating
189.1 	the subsequent financial requirements of the relief association.
189.2 	(c) If the relief association has an unfunded actuarial
189.3 	accrued liability as reported in the most recent actuarial
189.4 	valuation or survey, the total of the amounts calculated under
189.5 	clauses (1), (2), and (3), constitute the financial requirements
189.6 	of the relief association for the following year.  If the relief
189.7 	association does not have an unfunded actuarial accrued
189.8 	liability as reported in the most recent actuarial valuation or
189.9 	survey, the amount calculated under clauses (1) and (2)
189.10 	constitute the financial requirements of the relief association
189.11 	for the following year.  The financial requirement elements are:
189.12 	(1) the normal level cost requirement for the following
189.13 	year, expressed as a dollar amount, which must be determined by
189.14 	applying the normal level cost of the relief association as
189.15 	reported in the actuarial valuation or survey and expressed as a
189.16 	percentage of covered payroll to the estimated covered payroll
189.17 	of the active membership of the relief association, including
189.18 	any projected change in the active membership, for the following
189.19 	year;
189.20 	(2) for the Bloomington Fire Department Relief Association,
189.21 	the Fairmont Police Relief Association, and the Virginia Fire
189.22 	Department Relief Association, to the dollar amount of normal
189.23 	cost determined under clause (1) must be added an amount equal
189.24 	to the dollar amount of the administrative expenses of the
189.25 	special fund of the association if more than one fund is
189.26 	maintained by the association, or of the association if only one
189.27 	fund is maintained, for the most recent year, multiplied by the
189.28 	factor of 1.035.  The administrative expenses are those
189.29 	authorized under section 69.80.  No amount of administrative
189.30 	expenses under this clause are to be included in the financial
189.31 	requirements of the Minneapolis Firefighters Relief Association
189.32 	or the Minneapolis Police Relief Association; and
189.33 	(3) to the dollar amount of normal cost and expenses
189.34 	determined under clauses (1) and (2) must be added an amount
189.35 	equal to the level annual dollar amount which is sufficient to
189.36 	amortize the unfunded actuarial accrued liability by December
190.1 	31, 2010, the Fairmont Police Relief Association, the
190.2 	Minneapolis Firefighters Relief Association, and the Virginia
190.3 	Fire Department Relief Association, by the date determined under
190.4 	section 356.216, paragraph (a), clause (2), for the Bloomington
190.5 	Fire Department Relief Association, and by December 31, 2020,
190.6 	for the Minneapolis Police Relief Association,as determined
190.7 	from the actuarial valuation or survey of the fund, using an
190.8 	interest assumption set at the applicable rate specified in
190.9 	section 356.215, subdivision 8.  The amortization date specified
190.10 	in this clause applies to all local police or salaried
190.11 	firefighters' relief associations and that date supersedes any
190.12 	amortization date specified in any applicable special law.
190.13 	(d) The minimum obligation of the municipality is an amount
190.14 	equal to the financial requirements of the relief association
190.15 	reduced by the estimated amount of member contributions from
190.16 	covered salary anticipated for the following calendar year and
190.17 	the estimated amounts anticipated for the following calendar
190.18 	year from the applicable state aid program established under
190.19 	sections 69.011 to 69.051 receivable by the relief association
190.20 	after any allocation made under section 69.031, subdivision 5,
190.21 	paragraph (b), clause (2), or 423A.01, subdivision 2, clause
190.22 	(6), from the local police and salaried firefighters' relief
190.23 	association amortization aid program established under section
190.24 	423A.02, subdivision 1, from the supplementary amortization
190.25 	state-aid program established under section 423A.02, subdivision
190.26 	1a, and from the additional amortization state aid under section
190.27 	423A.02, subdivision 1b.

190.28 	Sec. 2. Minnesota Statutes 2004, section 356.215,
190.29 	subdivision 8, is amended to read:
190.30 		Subd. 8.Interest and salary assumptions.  (a) The
190.31 	actuarial valuation must use the applicable following
190.32 	preretirement interest assumption and the applicable following
190.33 	postretirement interest assumption:
190.34 	preretirement  postretirement
190.35 	                                   interest rate  interest rate
190.36 	            plan                      assumption     assumption
190.37 	     general state employees
190.38 	         retirement plan                  8.5%          6.0%
191.1 	     correctional state employees
191.2 	         retirement plan                  8.5           6.0
191.3 	     State Patrol retirement plan         8.5           6.0
191.4 	     legislators retirement plan          8.5           6.0
191.5 	     elective state officers
191.6 	         retirement plan                  8.5           6.0
191.7 	     judges retirement plan               8.5           6.0
191.8 	     general public employees
191.9 	         retirement plan                  8.5           6.0
191.10 	     public employees police and fire
191.11 	         retirement plan                  8.5           6.0
191.12 	     local government correctional
191.13 	         service retirement plan          8.5           6.0
191.14 	     teachers retirement plan             8.5           6.0
191.15 	     Minneapolis employees
191.16 	         retirement plan                  6.0           5.0
191.17 	     Duluth teachers retirement plan      8.5           8.5
191.18 	     Minneapolis teachers retirement
191.19 	         plan                             8.5           8.5
191.20 	     St. Paul teachers retirement
191.21 	         plan                             8.5           8.5
191.22 	     Minneapolis Police Relief
191.23 	         Association                      6.0           6.0
191.24 	     Fairmont Police Relief
191.25 	         Association                      5.0           5.0
191.26 	     Minneapolis Fire Department
191.27 	         Relief Association               6.0           6.0
191.28 	     Virginia Fire Department
191.29 	         Relief Association               5.0           5.0
191.30 	Bloomington Fire Department
191.31 	         Relief Association 6.0 6.0 
191.32 	     local monthly benefit volunteer
191.33 	         firefighters relief associations 5.0           5.0
191.34 	(b) The actuarial valuation must use the applicable
191.35 	following single rate future salary increase assumption, the
191.36 	applicable following modified single rate future salary increase
191.37 	assumption, or the applicable following graded rate future
191.38 	salary increase assumption:
191.39 	(1) single rate future salary increase assumption
191.40 	future salary
191.41 	            plan                          increase assumption
191.42 	     legislators retirement plan                  5.0%
191.43 	     elective state officers retirement
191.44 	         plan                                     5.0
191.45 	     judges retirement plan                       5.0
191.46 	     Minneapolis Police Relief Association        4.0
191.47 	     Fairmont Police Relief
191.48 	         Association                              3.5
191.49 	     Minneapolis Fire Department Relief
191.50 	         Association                              4.0
191.51 	     Virginia Fire Department
191.52 	         Relief Association                       3.5
191.53 	Bloomington Fire Department Relief 
191.54 	Association 4.0 
191.55 	(2) modified single rate future salary increase assumption
191.56 	future salary
191.57 	               plan                       increase assumption
191.58 	         Minneapolis employees        the prior calendar year
191.59 	           retirement plan            amount increased first by
191.60 	1.0198 percent to prior
192.1 	                                      fiscal year date and
192.2 	                                      then increased by 4.0
192.3 	                                      percent annually for
192.4 	                                      each future year
192.5 	(3) select and ultimate future salary increase assumption
192.6 	or graded rate future salary increase assumption
192.7 	future salary
192.8 	               plan                       increase assumption
192.9 	     general state employees             select calculation and
192.10 	         retirement plan                      assumption A
192.11 	     correctional state employees
192.12 	         retirement plan                      assumption H
192.13 	     State Patrol retirement plan             assumption H
192.14 	     general public employees            select calculation and
192.15 	         retirement plan                      assumption B
192.16 	     public employees police and fire
192.17 	         fund retirement plan                 assumption C
192.18 	     local government correctional service
192.19 	         retirement plan                      assumption H
192.20 	     teachers retirement plan                 assumption D
192.21 	     Duluth teachers retirement plan          assumption E
192.22 	     Minneapolis teachers retirement plan     assumption F
192.23 	     St. Paul teachers retirement plan        assumption G
192.24 	
192.25 	     The select calculation is:
192.26 	     during the ten-year select period, a designated percent
192.27 	     is multiplied by the result of ten minus T, where T is
192.28 	     the number of completed years of service, and is added
192.29 	     to the applicable future salary increase assumption.  The
192.30 	     designated percent is 0.2 percent for the correctional state
192.31 	     employees retirement plan, the State Patrol retirement
192.32 	     plan, the public employees police and fire plan, and the
192.33 	     local government correctional service plan; 0.3 percent
192.34 	     for the general state employees retirement plan, the
192.35 	     general public employees retirement plan, the teachers
192.36 	     retirement plan, the Duluth Teachers Retirement Fund
192.37 	     Association, and the St. Paul Teachers Retirement Fund
192.38 	     Association; and 0.4 percent for the Minneapolis Teachers
192.39 	     Retirement Fund Association.
192.40 	
192.41 	          The ultimate future salary increase assumption is:
192.42 	
192.43 	     age  A     B      C     D     E     F     G      H
192.44 	     16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
192.45 	     17  6.906.9011.508.158.006.506.90  7.7500
192.46 	     18  6.856.8511.508.108.006.506.90  7.7500
192.47 	     19  6.806.8011.508.058.006.506.90  7.7500
192.48 	     20  6.756.4011.506.006.906.506.90  7.7500
192.49 	     21  6.756.4011.506.006.906.506.90  7.1454
192.50 	     22  6.756.4011.006.006.906.506.90  7.0725
192.51 	     23  6.756.4010.506.006.856.506.85  7.0544
192.52 	     24  6.756.4010.006.006.806.506.80  7.0363
192.53 	     25  6.756.409.506.006.756.506.75  7.0000
192.54 	     26  6.756.369.206.006.706.506.70  7.0000
192.55 	     27  6.756.328.906.006.656.506.65  7.0000
192.56 	     28  6.756.288.606.006.606.506.60  7.0000
192.57 	     29  6.756.248.306.006.556.506.55  7.0000
192.58 	     30  6.756.208.006.006.506.506.50  7.0000
192.59 	     31  6.756.167.806.006.456.506.45  7.0000
192.60 	     32  6.756.127.606.006.406.506.40  7.0000
192.61 	     33  6.756.087.406.006.356.506.35  7.0000
192.62 	     34  6.756.047.206.006.306.506.30  7.0000
192.63 	     35  6.756.007.006.006.256.506.25  7.0000
192.64 	     36  6.755.966.806.006.206.506.20  6.9019
192.65 	     37  6.755.926.606.006.156.506.15  6.8074
192.66 	     38  6.755.886.405.906.106.506.10  6.7125
192.67 	     39  6.755.846.205.806.056.506.05  6.6054
192.68 	     40  6.755.806.005.706.006.506.00  6.5000
193.1 	     41  6.755.765.905.605.906.505.95  6.3540
193.2 	     42  6.755.725.805.505.806.505.90  6.2087
193.3 	     43  6.655.685.705.405.706.505.85  6.0622
193.4 	     44  6.555.645.605.305.606.505.80  5.9048
193.5 	     45  6.455.605.505.205.506.505.75  5.7500
193.6 	     46  6.355.565.455.105.406.405.70  5.6940
193.7 	     47  6.255.525.405.005.306.305.65  5.6375
193.8 	     48  6.155.485.355.005.206.205.60  5.5822
193.9 	     49  6.055.445.305.005.106.105.55  5.5404
193.10 	     50  5.955.405.255.005.006.005.50  5.5000
193.11 	     51  5.855.365.255.005.005.905.45  5.4384
193.12 	     52  5.755.325.255.005.005.805.40  5.3776
193.13 	     53  5.655.285.255.005.005.705.35  5.3167
193.14 	     54  5.555.245.255.005.005.605.30  5.2826
193.15 	     55  5.455.205.255.005.005.505.25  5.2500
193.16 	     56  5.355.165.255.005.005.405.20  5.2500
193.17 	     57  5.255.125.255.005.005.305.15  5.2500
193.18 	     58  5.255.085.255.105.005.205.10  5.2500
193.19 	     59  5.255.045.255.205.005.105.05  5.2500
193.20 	     60  5.255.005.255.305.005.005.00  5.2500
193.21 	     61  5.255.005.255.405.005.005.00  5.2500
193.22 	     62  5.255.005.255.505.005.005.00  5.2500
193.23 	     63  5.255.005.255.605.005.005.00  5.2500
193.24 	     64  5.255.005.255.705.005.005.00  5.2500
193.25 	     65  5.255.005.255.705.005.005.00  5.2500
193.26 	     66  5.255.005.255.705.005.005.00  5.2500
193.27 	     67  5.255.005.255.705.005.005.00  5.2500
193.28 	     68  5.255.005.255.705.005.005.00  5.2500
193.29 	     69  5.255.005.255.705.005.005.00  5.2500
193.30 	     70  5.255.005.255.705.005.005.00  5.2500
193.31 	     71  5.255.00         5.70
193.32 	(c) The actuarial valuation must use the applicable
193.33 	following payroll growth assumption for calculating the
193.34 	amortization requirement for the unfunded actuarial accrued
193.35 	liability where the amortization retirement is calculated as a
193.36 	level percentage of an increasing payroll:
193.37 	payroll growth
193.38 	                  plan                             assumption
193.39 	     general state employees retirement plan          5.00%
193.40 	     correctional state employees retirement plan     5.00
193.41 	     State Patrol retirement plan                     5.00
193.42 	     legislators retirement plan                      5.00
193.43 	     elective state officers retirement plan          5.00
193.44 	     judges retirement plan                           5.00
193.45 	     general public employees retirement plan         6.00
193.46 	     public employees police and fire
193.47 	         retirement plan                              6.00
193.48 	     local government correctional service
193.49 	         retirement plan                              6.00
193.50 	     teachers retirement plan                         5.00
193.51 	     Duluth teachers retirement plan                  5.00
193.52 	     Minneapolis teachers retirement plan             5.00
193.53 	     St. Paul teachers retirement plan                5.00

193.54 	Sec. 3. Minnesota Statutes 2004, section 356.216, is
193.55 	amended to read:
193.56 	356.216 CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
193.57 	AND FIRE FUNDS.
193.58 	(a) The provisions of section 356.215 that govern the
193.59 	contents of actuarial valuations must apply to any local police
194.1 	or fire pension fund or relief association required to make an
194.2 	actuarial report under this section, except as follows:
194.3 	(1) in calculating normal cost and other requirements, if
194.4 	required to be expressed as a level percentage of covered
194.5 	payroll, the salaries used in computing covered payroll must be
194.6 	the maximum rate of salary on which retirement and survivorship
194.7 	credits and amounts of benefits are determined and from which
194.8 	any member contributions are calculated and deducted;
194.9 	(2) in lieu of the amortization date specified in section
194.10 	356.215, subdivision 11, the appropriate amortization target
194.11 	date specified in section 69.77, subdivision 4, or 69.773,
194.12 	subdivision 4, clause (c), must be used in calculating any
194.13 	required amortization contribution, except that if the actuarial
194.14 	report for the Bloomington Fire Department Relief Association
194.15 	indicates an unfunded actuarial accrued liability, the unfunded
194.16 	obligation is to be amortized on a level dollar basis by
194.17 	December 31 of the year occurring 20 years later, and if
194.18 	subsequent actuarial valuations for the Bloomington Fire
194.19 	Department Relief Association determine a net actuarial
194.20 	experience loss incurred during the year which ended as of the
194.21 	day before the most recent actuarial valuation date, any
194.22 	unfunded liability due to that loss is to be amortized on a
194.23 	level dollar basis by December 31 of the year occurring 20 years
194.24 	later and except that the amortization date for the Minneapolis
194.25 	Police Relief Association is December 31, 2020;
194.26 	(3) in addition to the tabulation of active members and
194.27 	annuitants provided for in section 356.215, subdivision 13, the
194.28 	member contributions for active members for the calendar year
194.29 	and the prospective annual retirement annuities under the
194.30 	benefit plan for active members must be reported;
194.31 	(4) actuarial valuations required under section 69.773,
194.32 	subdivision 2, must be made at least every four years and
194.33 	actuarial valuations required under section 69.77 shall be made
194.34 	annually;
194.35 	(5) the actuarial balance sheet showing accrued assets
194.36 	valued at market value if the actuarial valuation is required to
195.1 	be prepared at least every four years or valued as current
195.2 	assets under section 356.215, subdivision 1, clause (6), or
195.3 	paragraph (b), whichever applies, if the actuarial valuation is
195.4 	required to be prepared annually, actuarial accrued liabilities,
195.5 	and the unfunded actuarial accrued liability must include the
195.6 	following required reserves:
195.7 	(i) For active members
195.8 	      1.  Retirement benefits
195.9 	      2.  Disability benefits
195.10 	      3.  Refund liability due to death or withdrawal
195.11 	      4.  Survivors' benefits
195.12 	         (ii) For deferred annuitants' benefits
195.13 	         (iii) For former members without vested rights
195.14 	         (iv) For annuitants
195.15 	      1.  Retirement annuities
195.16 	      2.  Disability annuities
195.17 	      3.  Surviving spouses' annuities
195.18 	      4.  Surviving children's annuities
195.19 	In addition to those required reserves, separate items must
195.20 	be shown for additional benefits, if any, which may not be
195.21 	appropriately included in the reserves listed above; and
195.22 	(6) actuarial valuations are due by the first day of the
195.23 	seventh month after the end of the fiscal year which the
195.24 	actuarial valuation covers.
195.25 	(b) For the Minneapolis Firefighters Relief Association or
195.26 	the Minneapolis Police Relief Association, the following
195.27 	provisions additionally apply:
195.28 	(1) in calculating the actuarial balance sheet, unfunded
195.29 	actuarial accrued liability, and amortization contribution of
195.30 	the relief association, "current assets" means the value of all
195.31 	assets at cost, including realized capital gains and losses,
195.32 	plus or minus, whichever applies, the average value of total
195.33 	unrealized capital gains or losses for the most recent
195.34 	three-year period ending with the end of the plan year
195.35 	immediately preceding the actuarial valuation report
195.36 	transmission date; and
196.1 	(2) in calculating the applicable portions of the actuarial
196.2 	valuation, an annual preretirement interest assumption of six
196.3 	percent, an annual postretirement interest assumption of six
196.4 	percent, and an annual salary increase assumption of four
196.5 	percent must be used.

196.6 	Sec. 4. Minnesota Statutes 2004, section 383B.46,
196.7 	subdivision 2, is amended to read:
196.8 		Subd. 2.Establishment of account; contributions.  The
196.9 	county of Hennepin shall deduct from the salary of every person
196.10 	who is eligible for coverage and who elected to retain or obtain
196.11 	coverage by the Hennepin County supplemental retirement program
196.12 	a sum equal to one percent of the total salary of the person.
196.13 	Any classified or unclassified employee who is employed in
196.14 	subsidized on-the-job training, work experience or public
196.15 	service employment as an enrollee under the federal
196.16 	Comprehensive Employment and Training Act shall not be included
196.17 	in the supplemental retirement account from and after March 30,
196.18 	1978 unless the employee has as of the later of March 30, 1978
196.19 	or the date of employment sufficient service credit in the
196.20 	public employees retirement fund or the Minneapolis municipal
196.21 	employees retirement fund, whichever is applicable, to meet the
196.22 	minimum vesting requirements for a deferred retirement annuity,
196.23 	or the county agrees in writing to make the required employer
196.24 	contributions on account of the individual from revenue sources
196.25 	other than funds provided under the federal Comprehensive
196.26 	Employment and Training Act, or the employee agrees in writing
196.27 	to make the required employer contribution in addition to the
196.28 	employee contribution.  The deduction shall be made in the same
196.29 	manner as other retirement deductions are made from the salary
196.30 	of the person.  An amount equal to the amounts deducted during
196.31 	each payroll period shall be contributed by the county of
196.32 	Hennepin.  The total amount deducted and contributed shall be
196.33 	deposited to the credit of the supplemental retirement account
196.34 	in the treasury of the county of Hennepin a separate account
196.35 	administered by the Minnesota State Retirement System on behalf
196.36 	of Hennepin County.  The Hennepin County supplemental retirement
197.1 	account is hereby established as an account separate and
197.2 	distinct from other funds, accounts, or assets of the county of
197.3 	Hennepin.

197.4 	Sec. 5. Minnesota Statutes 2004, section 383B.47, is
197.5 	amended to read:
197.6 	383B.47 PARTICIPATION IN MINNESOTA SUPPLEMENTAL INVESTMENT
197.7 	FUND.
197.8 	With the moneys deposited to the credit of the supplemental
197.9 	retirement account in the treasury of the county of Hennepin,
197.10 	the county of Hennepin , the Minnesota State Retirement System 
197.11 	shall purchase shares on behalf of Hennepin County in the
197.12 	accounts of the Minnesota supplemental investment fund as
197.13 	provided in section 383B.48.

197.14 	Sec. 6. Minnesota Statutes 2004, section 383B.48, is
197.15 	amended to read:
197.16 	383B.48 BUYING STATE SUPPLEMENTAL INVESTMENT FUND SHARES.
197.17 	At the time a person becomes eligible for coverage and
197.18 	elects to obtain coverage by the Hennepin County supplemental
197.19 	retirement program and before November 1 of each subsequent
197.20 	year,A participant in the Hennepin County supplemental
197.21 	retirement program shall indicate in writing on a form provided
197.22 	by the county of Hennepin the account of the Minnesota
197.23 	supplemental investment fund in which the participant wishes
197.24 	salary deductions and county matching contributions attributable
197.25 	to salary deductions to be invested for the subsequent 12-month
197.26 	period such time as allowed by the Minnesota State Retirement
197.27 	System. For that 12-month period,The county of Hennepin 
197.28 	Minnesota State Retirement System shall purchase with the salary
197.29 	deductions and county matching funds attributable to the salary
197.30 	deductions shares in the appropriate account of the Minnesota
197.31 	supplemental investment fund in accordance with the indicated
197.32 	preferences of the participant.  However, the county of Hennepin
197.33 	has the authority to determine which accounts of the Minnesota
197.34 	supplemental investment fund will be available for participant
197.35 	investment.  The shares purchased must stand in the name of the
197.36 	county of Hennepin.  A record must be kept by the county of
198.1 	Hennepin Minnesota State Retirement System indicating the number
198.2 	of shares in each account of the Minnesota supplemental
198.3 	investment fund purchased with the salary deductions and county
198.4 	matching funds attributable to the salary deductions of each
198.5 	participant.  The record must be known as the "participant's
198.6 	share account record."  The participant's share account record
198.7 	must show, in addition to the number of shares in the account,
198.8 	any cash balance of salary deductions or county matching funds
198.9 	attributable to those deductions which stand uninvested in
198.10 	shares.  At the option of the county of Hennepin, and subject to
198.11 	any terms and conditions established and communicated in writing
198.12 	by the county to a participant, the participant may designate no
198.13 	more often than once each calendar quarter month that prior
198.14 	salary deductions and county matching contributions attributable
198.15 	to the salary deductions, together with any interest earned, be
198.16 	reinvested in another account of the Minnesota supplemental
198.17 	investment fund made available by the county of Hennepin.

198.18 	Sec. 7. Minnesota Statutes 2004, section 383B.49, is
198.19 	amended to read:
198.20 	383B.49 SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF
198.21 	SHARES.
198.22 	When requested to do so, in writing, on forms provided by
198.23 	the county Minnesota State Retirement System, by a participant,
198.24 	surviving spouse, a guardian of a surviving child or a personal
198.25 	representative, whichever is applicable, the county of Hennepin 
198.26 	Minnesota State Retirement System shall on behalf of Hennepin
198.27 	County redeem shares in the accounts of the Minnesota
198.28 	supplemental investment fund standing in a participant's share
198.29 	account record under the following circumstances and in
198.30 	accordance with the laws and regulations governing the Minnesota
198.31 	supplemental investment fund:
198.32 	(1) A participant who is no longer employed by the county
198.33 	of Hennepin is entitled to receive the cash realized on the
198.34 	redemption of the shares to the credit of the participant's
198.35 	share account record of the person.  The participant may request
198.36 	the redemption of all or a portion of the shares in the
199.1 	participant's share account record of the person, but may not
199.2 	request more than one redemption in any one calendar year.  If
199.3 	only a portion of the shares in the participant's share account
199.4 	record is requested to be redeemed the person may request to
199.5 	redeem not less than 20 percent of the shares in any one
199.6 	calendar year and the redemption must be completed in no more
199.7 	than five years. The person may select annual redemption in a
199.8 	single lump sum or in monthly payments.An election is
199.9 	irrevocable except that a participant may request an amendment
199.10 	of the election to redeem all of the person's remaining shares.
199.11 	All requests under this paragraph are subject to application to
199.12 	and approval of the Hennepin County administrator, in the sole
199.13 	discretion of the administrator Minnesota State Retirement
199.14 	System upon verification by Hennepin County through the county
199.15 	administrator of the recipient's eligibility to redeem funds.
199.16 	(2) In the event of the death of a participant leaving a
199.17 	surviving spouse, the surviving spouse is entitled to receive
199.18 	the cash realized on the redemption of all or a portion of the
199.19 	shares in the participant's share account record of the deceased
199.20 	spouse, but in no event may the spouse request more than one
199.21 	redemption in each calendar year.  If only a portion of the
199.22 	shares in the participant's share account record is requested to
199.23 	be redeemed, the surviving spouse may request the redemption of
199.24 	not less than 20 percent of the shares in any one calendar year.
199.25 	The surviving spouse may elect annual redemption in a single
199.26 	lump sum payment or in monthly payments.Redemption must be
199.27 	completed in no more than five years.  An election is
199.28 	irrevocable except that the surviving spouse may request an
199.29 	amendment of the election to redeem all of the participant's
199.30 	remaining shares.  All requests under this paragraph are subject
199.31 	to application to and approval of the Hennepin County
199.32 	administrator, in the sole discretion of the
199.33 	administrator Minnesota State Retirement System upon
199.34 	verification by Hennepin County through the county administrator
199.35 	of the recipient's eligibility to redeem funds.  Upon the death
199.36 	of the surviving spouse, any shares remaining in the
200.1 	participant's share account record must be redeemed on behalf of
200.2 	Hennepin County by the county of Hennepin Minnesota State
200.3 	Retirement System and the cash realized from the redemption
200.4 	distributed to the estate of the surviving spouse.
200.5 	(3) In the event of the death of a participant leaving no
200.6 	surviving spouse, but leaving a minor surviving child or minor
200.7 	surviving children, the guardianship estate of the minor child
200.8 	is, or the guardianship estates of the minor children are,
200.9 	entitled to receive the cash realized on the redemption of all
200.10 	shares to the credit of the participant's share account record
200.11 	of the deceased participant.  In the event of minor surviving
200.12 	children, the cash realized must be paid in equal shares to the
200.13 	guardianship estates of the minor surviving children.
200.14 	(4) In the event of the death of a participant leaving no
200.15 	surviving spouse and no minor surviving children, the estate of
200.16 	the deceased participant is entitled to receive the cash
200.17 	realized on the redemption of all shares to the credit of the
200.18 	participant's share account record of the deceased participant.

200.19 	Sec. 8. [383B.491] MINNESOTA STATE RETIREMENT SYSTEM
200.20 	BILLING AUTHORITY.
200.21 	The Minnesota State Retirement System executive director is
200.22 	authorized to enter into an interagency agreement with Hennepin
200.23 	County under which the Minnesota State Retirement System would
200.24 	directly bill the county for the cost of the Minnesota State
200.25 	Retirement System's administration of the Hennepin County
200.26 	Supplemental Retirement Plan.

200.27 	Sec. 9. Minnesota Statutes 2004, section 423B.05,
200.28 	subdivision 3, is amended to read:
200.29 		Subd. 3.Continuation of board.  Notwithstanding the
200.30 	provisions of section 423A.01, subdivision 2, or any other law,
200.31 	the board of trustees and its successors established under
200.32 	subdivision 1 shall continue to govern the association until
200.33 	there are no more than 100 350 members of the police pension
200.34 	fund.  The fund thereafter must become a trust fund in
200.35 	accordance with section 423A.01, subdivision 2.

200.36 	Sec. 10. Minnesota Statutes 2004, section 423B.09,
201.1 	subdivision 1, is amended to read:
201.2 		Subdivision 1.Minneapolis police; persons entitled to
201.3 	receive pensions.  The association shall grant pensions payable
201.4 	from the police pension fund in monthly installments to persons
201.5 	entitled to pensions in the manner and for the following
201.6 	purposes.
201.7 	(a) When the actuarial value of assets of the fund
201.8 	according to the most recent annual actuarial valuation
201.9 	performed in accordance with sections 356.215 and 356.216 is
201.10 	less than 90 percent of the actuarial accrued liabilities,An
201.11 	active member or a deferred pensioner who has performed duty as
201.12 	a member of the police department of the city for five years or
201.13 	more, upon written application after retiring from duty and
201.14 	reaching at least age 50, is entitled to be paid monthly for
201.15 	life a service pension equal to eight units.  For full years of
201.16 	service beyond five years, the service pension increases by 1.6
201.17 	units for each full year, to a maximum of 40 units.  When the
201.18 	actuarial value of assets of the fund according to the most
201.19 	recent annual actuarial valuation prepared in accordance with
201.20 	sections 356.215 and 356.216 is greater than 90 percent of
201.21 	actuarial accrued liabilities,.Active members, deferred
201.22 	members, and service pensioners are entitled to a service
201.23 	pension according to the following schedule:
201.24 	5 years           8.0 units
201.25 	               6 years           9.6 units
201.26 	               7 years          11.2 units
201.27 	               8 years          12.8 units
201.28 	               9 years          14.4 units
201.29 	              10 years          16.0 units
201.30 	              11 years          17.6 units
201.31 	              12 years          19.2 units
201.32 	              13 years          20.8 units
201.33 	              14 years          22.4 units
201.34 	              15 years          24.0 units
201.35 	              16 years          25.6 units
201.36 	              17 years          27.2 units
202.1 	              18 years          28.8 units
202.2 	              19 years          30.4 units
202.3 	A B 
202.4 	              20 years 34.0 34.5 units 35.0 units 
202.5 	              21 years 35.6 36.1 units 36.6 units 
202.6 	              22 years 37.2 37.7 units 38.2 units 
202.7 	              23 years 38.8 39.3 units 39.8 units 
202.8 	              24 years 40.4 40.9 units 41.4 units 
202.9 	              25 years 42.0 42.5 units 43.0 units 
202.10 	Column A is applicable until December 31, 2005, and applies
202.11 	retroactively to January 1, 2005, for a service pensioner who
202.12 	retired before January 1, 2005.  Column B applies on and after
202.13 	January 1, 2006.
202.14 	Fractional years of service may not be used in computing
202.15 	pensions.
202.16 	(b) An active member who after five years' service but less
202.17 	than 20 years' service with the police department of the city,
202.18 	becomes superannuated so as to be permanently unable to perform
202.19 	the person's assigned duties, is entitled to be paid monthly for
202.20 	life a superannuation pension equal to four units for five years
202.21 	of service and an additional two units for each full year of
202.22 	service over five years and less than 20 years.
202.23 	(c) An active member who is not eligible for a service
202.24 	pension and who, while a member of the police department of the
202.25 	city, becomes diseased or sustains an injury while in the
202.26 	service that permanently unfits the member for the performance
202.27 	of police duties is entitled to be paid monthly for life a
202.28 	pension equal to 34 units while so disabled.

202.29 	Sec. 11. Minnesota Statutes 2004, section 423B.09, is
202.30 	amended by adding a subdivision to read:
202.31 		Subd. 7.Additional unit. The additional half units
202.32 	provided to members by subdivision 1 must also be provided under
202.33 	the same terms and at the same time as applicable under
202.34 	subdivision 1 to members who selected a joint annuity option
202.35 	under subdivision 6 and must be in an amount that is actuarially
202.36 	equivalent to the service pension and the automatic survivor
203.1 	coverage for that additional unit.

203.2 	Sec. 12. Minnesota Statutes 2004, section 423B.10,
203.3 	subdivision 1, is amended to read:
203.4 		Subdivision 1.Entitlement; benefit amount.  (a) The
203.5 	surviving spouse of a deceased service pensioner, disability
203.6 	pensioner, deferred pensioner, superannuation pensioner, or
203.7 	active member, who was the legally married spouse of the
203.8 	decedent, residing with the decedent, and who was married while
203.9 	or before the time the decedent was on the payroll of the police
203.10 	department, and who, if the deceased member was a service or
203.11 	deferred pensioner, was legally married to the member for a
203.12 	period of at least one year before retirement from the police
203.13 	department, is entitled to a surviving spouse benefit.  The
203.14 	surviving spouse benefit is equal to 22 22.5 units per month
203.15 	until December 31, 2005, and 23 units per month beginning on
203.16 	January 1, 2006,if the person is the surviving spouse of a
203.17 	deceased active member or disabilitant.  The surviving spouse
203.18 	benefit is equal to six units per month, plus an additional one
203.19 	unit for each year of service to the credit of the decedent in
203.20 	excess of five years, to a maximum of 22 22.5 units per month
203.21 	until December 31, 2005, and 23 units per month beginning on
203.22 	January 1, 2006, if the person is the surviving spouse of a
203.23 	deceased service pensioner, deferred pensioner, or
203.24 	superannuation pensioner.  The surviving spouse benefit is
203.25 	payable for the life of the surviving spouse.
203.26 	(b) A surviving child of a deceased service pensioner,
203.27 	disability pensioner, deferred pensioner, superannuation
203.28 	pensioner, or active member, who was living while the decedent
203.29 	was an active member of the police department or was born within
203.30 	nine months after the decedent terminated active service in the
203.31 	police department, is entitled to a surviving child benefit.
203.32 	The surviving child benefit is equal to eight units per month if
203.33 	the person is the surviving child of a deceased active member or
203.34 	disabilitant.  The surviving child benefit is equal to two units
203.35 	per month, plus an additional four-tenths of one unit per month
203.36 	for each year of service to the credit of the decedent in excess
204.1 	of five years, to a maximum of eight units, if the person is the
204.2 	surviving child of a deceased service pensioner, deferred
204.3 	pensioner, or superannuation pensioner.  The surviving child
204.4 	benefit is payable until the person attains age 18, or, if in
204.5 	full-time attendance during the normal school year, in a school
204.6 	approved by the board of directors, until the person receives a
204.7 	bachelor's degree or attains the age of 22 years, whichever
204.8 	occurs first.  In the event of the death of both parents leaving
204.9 	a surviving child or children entitled to a surviving child
204.10 	benefit as determined in this paragraph, the surviving child is,
204.11 	or the surviving children are, entitled to a surviving child
204.12 	benefit in such sums as determined by the board of directors to
204.13 	be necessary for the care and education of such surviving child
204.14 	or children, but not to exceed the family maximum benefit per
204.15 	month, to the children of any one family.
204.16 	(c) The surviving spouse and surviving child benefits are
204.17 	subject to a family maximum benefit.  The family maximum benefit
204.18 	is 41 units per month.
204.19 	(d) A surviving spouse who is otherwise not qualified may
204.20 	receive a benefit if the surviving spouse was married to the
204.21 	decedent for a period of five years and was residing with the
204.22 	decedent at the time of death.  The surviving spouse benefit is
204.23 	the same as that provided in paragraph (a), except that if the
204.24 	surviving spouse is younger than the decedent, the surviving
204.25 	spouse benefit must be actuarially equivalent to a surviving
204.26 	spouse benefit that would have been paid to the member's spouse
204.27 	had the member been married to a person of the same age or a
204.28 	greater age than the member's age before retirement.
204.29 	(e) For any surviving spouse who began receiving survivor
204.30 	benefits before January 1, 2005, the half-unit increase under
204.31 	paragraph (a) is effective retroactive to January 1, 2005.

204.32 	Sec. 13. Minnesota Statutes 2004, section 423C.05,
204.33 	subdivision 2, is amended to read:
204.34 		Subd. 2.Service pension.  (a) An active A member who has
204.35 	performed duty for the fire department for five years or more,
204.36 	upon written application after retiring from duty and reaching
205.1 	at least age 50, is entitled to be paid monthly for life a
205.2 	service pension under paragraph (b).
205.3 	(b) Based on the percentage that the actuarial value of
205.4 	assets of the special fund equal to the actuarial accrued
205.5 	liabilities of the special fund according to the most recent
205.6 	annual actuarial valuation of the relief association prepared in
205.7 	accordance with sections 356.215 and 356.216,The amount of the
205.8 	service pension is as follows:
205.9 	Length of Service Service Service 
205.10 	allowable pension pension pension 
205.11 	service payable if payable payable if 
205.12 	credit under 90 if greater greater
205.13 	             percent than 89.99than 92.49
205.14 	                            percent and percent
205.15 	                            less than Number of 
205.16 	92.5 percent units 
205.17 	5 years-8.0 units 8.0 units
205.18 	 6 years-9.6 units 9.6 units
205.19 	 7 years-11.2 units 11.2 units
205.20 	 8 years-12.8 units 12.8 units
205.21 	 9 years-14.4 units 14.4 units
205.22 	10 years 16.0 units 16.0 units 16.0 units
205.23 	11 years 17.6 units 17.6 units 17.6 units
205.24 	12 years 19.2 units 19.2 units 19.2 units
205.25 	13 years 20.8 units 20.8 units 20.8 units
205.26 	14 years 22.4 units 22.4 units 22.4 units
205.27 	15 years 24.0 units 24.0 units 24.0 units
205.28 	16 years 25.6 units 25.6 units 25.6 units
205.29 	17 years 27.2 units 27.2 units 27.2 units
205.30 	18 years 28.8 units 28.8 units 28.8 units
205.31 	19 years 30.4 units 30.4 units 30.4 units
205.32 	20 years 33.0 units 33.5 units 34.0 units
205.33 	21 years 34.6 units 35.1 units 35.6 units
205.34 	22 years 36.2 units 37.7 units 37.2 units
205.35 	23 years 37.8 units 38.3 units 38.8 units
205.36 	24 years 39.4 units 39.9 units 40.4 units
206.1 	25 years
206.2 	 or more 41.0 units 41.5 units 42.0 units
206.3 	(c) A member entitled to a benefit under this subdivision
206.4 	may elect to have it paid as an optional retirement annuity
206.5 	pursuant to the conditions set forth in subdivision 8.  A member
206.6 	receiving a benefit pursuant to subdivision 5 or 6 shall not
206.7 	simultaneously be entitled to a benefit under this subdivision.

206.8 	Sec. 14. [423C.16] RECOMPUTATION OF DISABLED BENEFIT
206.9 	PROHIBITED.
206.10 	Notwithstanding section 423A.11, the Board of Trustees of
206.11 	the Minneapolis Firefighters Relief Association shall not
206.12 	recompute the disability benefit of a member who became
206.13 	permanently disabled as the result of a service-related disease
206.14 	or injury.  Any prior recomputation of a disabled member's
206.15 	service-related disability pension shall be revoked upon the
206.16 	member's request and upon the member's signed and sworn
206.17 	agreement to waive any right to a recomputation of the benefit
206.18 	in the future.  Non-service-related disability pension benefits
206.19 	that were recomputed at full 25-year service pensions shall
206.20 	remain in effect.

206.21 	Sec. 15. NO REDUCTION OF BENEFITS.
 206.22 	When a pension benefit is properly paid in accordance with
206.23 	the laws governing the Minneapolis Police Relief Association or
206.24 	the Minneapolis Firefighters Relief Association, whichever
206.25 	apply, to any member, the dollar amount of the pension a member
206.26 	received may not be reduced if the city of Minneapolis and the
206.27 	collective bargaining agent representing active police officers
206.28 	or firefighters enter into or are required to abide by an
206.29 	agreement that would otherwise require the association to reduce
206.30 	the dollar amount of a pension that had properly been paid to
206.31 	any member.

206.32 	Sec. 16. AURORA, BIWABIK CITY, HOYT LAKES, AND PALO
206.33 	VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS; CONSOLIDATION.
 206.34 	(a) This section applies to consolidation of any
206.35 	combination of two or more of the following volunteer
206.36 	firefighter relief associations:  Aurora, Biwabik City, Hoyt
207.1 	Lakes, and Palo.
207.2 	(b) Notwithstanding Minnesota Statutes, section 424B.10,
207.3 	subdivision 1, paragraph (a), the service pension to be paid by
207.4 	the relief association existing after the consolidation is as
207.5 	follows:
207.6 	(1) for the service rendered by each individual volunteer
207.7 	firefighter before the effective date of the consolidation, the
207.8 	service pension amount is the amount payable to that volunteer
207.9 	firefighter under the articles of incorporation or bylaws of the
207.10 	consolidating volunteer firefighters relief association that the
207.11 	firefighter was a member of immediately before the
207.12 	consolidation;
207.13 	(2) for the service rendered after the effective date of
207.14 	the consolidation, the service pension amount is the highest
207.15 	dollar amount service pension of any of the consolidating
207.16 	volunteer firefighters relief associations under the articles of
207.17 	incorporation or bylaws in effect immediately before the
207.18 	consolidation; and 
207.19 	(3) after consolidation, increases in the amounts
207.20 	established in clauses (1) and (2) may be implemented if
207.21 	consistent with applicable requirements of Minnesota Statutes,
207.22 	chapters 69 and 424A.

207.23 	Sec. 17. EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD
207.24 	HOC POSTRETIREMENT ADJUSTMENT.
 207.25 	(a) In addition to the current pensions and other
207.26 	retirement benefits payable, the pensions and retirement
207.27 	benefits payable to retired police officers and firefighters and
207.28 	their surviving spouses by the Eveleth police and fire trust
207.29 	fund are increased by $100 per month.  Increases are retroactive
207.30 	from January 1, 2005.
207.31 	(b) Following the January 1, 2005, effective date of the
207.32 	benefit increase provided under paragraph (a), every two years
207.33 	thereafter, to be effective no earlier than the applicable
207.34 	January 1, the city council of the city of Eveleth is authorized
207.35 	to provide permanent, uniform benefit increases, not less than
207.36 	$10 per month nor to exceed $100 per month, to any remaining
208.1 	retirees and survivors receiving benefits from the Eveleth
208.2 	police and fire trust fund.  Any given benefit improvement under
208.3 	this paragraph is not effective unless the city council passes a
208.4 	resolution approving the increase.
208.5 	(c) Within 30 days following the approval of a resolution
208.6 	under paragraph (b), the chief administrative officer of the
208.7 	city of Eveleth shall file a copy of the resolution with the
208.8 	executive director of the Legislative Commission on Pensions and
208.9 	Retirement, with the chair of the house Governmental Operations
208.10 	and Veterans Affairs Committee, and with the chair of the senate
208.11 	State and Local Government Operations Committee.  Along with a
208.12 	copy of the resolution, the city's chief administrative officer
208.13 	must send a statement indicating the age of each benefit
208.14 	recipient and the retirement benefit or survivor benefit being
208.15 	received before and after the benefit increase.

208.16 	Sec. 18. MAPLEWOOD AND OAKDALE VOLUNTEER FIREFIGHTER
208.17 	RELIEF ASSOCIATIONS; TRANSFER OF ASSETS.
 208.18 	Notwithstanding any limitations in Minnesota Statutes,
208.19 	section 424A.02, subdivision 13, or any other provision of law
208.20 	to the contrary, if an agreement between the affected relief
208.21 	associations and cities is reached as provided in this section,
208.22 	the Maplewood Firefighters Relief Association may transfer
208.23 	assets from its special fund to the Oakdale Fire Department
208.24 	Relief Association representing the value of the accumulated
208.25 	service credit for the current members of the Oakdale Fire
208.26 	Department Relief Association who are currently eligible to
208.27 	receive a combined service pension for firefighter service in
208.28 	both associations.  The transfer of the assets from the
208.29 	Maplewood Firefighters Relief Association to the Oakdale Fire
208.30 	Department Relief Association must be in an amount representing
208.31 	the cumulative value of the service credit earned by the members
208.32 	of the Oakdale Fire Department Relief Association who are
208.33 	currently eligible to receive a combined service pension for
208.34 	firefighting service in both associations for the service credit
208.35 	that they accrued while working for the Maplewood Fire
208.36 	Department.  The amount of the assets, liabilities, and service
209.1 	credit to be transferred must be specified in a joint agreement
209.2 	negotiated by the secretaries of the two relief associations and
209.3 	ratified by the boards of trustees of both relief associations
209.4 	and of the cities of Maplewood and Oakdale.  The agreement must
209.5 	specify by name or other appropriate means the firefighters
209.6 	affected by the liability, asset, and service credit transfer.
209.7 	The ratification must be expressed in the form of resolutions
209.8 	adopted by each entity.  The agreements must specify the amount
209.9 	of assets to be transferred, the amount of liabilities to be
209.10 	transferred, and the amount of service credit each of the
209.11 	applicable individuals will receive in the Oakdale Fire
209.12 	Department Relief Association.  Upon the ratification of the
209.13 	agreement by both relief associations and both cities, the
209.14 	assets, liabilities, and service credit of the applicable
209.15 	individuals must be transferred to the Oakdale Fire Department
209.16 	Relief Association, and the Maplewood Firefighters Relief
209.17 	Association is relieved of any obligation to the individuals.  A
209.18 	certified copy of the ratified agreement must be filed with the
209.19 	state auditor and with the secretary of state.

209.20 	Sec. 19. EFFECTIVE DATE; LOCAL APPROVAL.
 209.21 	(a) Sections 1 and 3 with respect to the Bloomington Fire
209.22 	Department Relief Association and section 2 are effective the
209.23 	day after the date on which the city council of the city of
209.24 	Bloomington and its chief clerical officer timely complete their
209.25 	compliance with Minnesota Statutes, section 645.021,
209.26 	subdivisions 2 and 3.
209.27 	(b) Sections 1, 3, and 15, with respect to the Minneapolis
209.28 	Police Relief Association, 9, 10, 11, and 12 are not severable
209.29 	and are effective the day after the date on which the city
209.30 	council of the city of Minneapolis and the chief clerical
209.31 	officer of the city of Minneapolis timely complete their
209.32 	compliance with Minnesota Statutes, section 645.021,
209.33 	subdivisions 2 and 3.
209.34 	(c) Sections 4, 5, 6, 7, and 8 are effective on the day
209.35 	after the board of Hennepin County and its chief clerical
209.36 	officer complete in a timely manner their compliance with
210.1 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
210.2 	(d) Sections 13, 14, and 15, with respect to the
210.3 	Minneapolis Firefighters Relief Association, are effective on
210.4 	the day after the governing body of the city of Minneapolis and
210.5 	its chief clerical officer timely complete their compliance with
210.6 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
210.7 	(e) Section 17 is effective the day after the date on which
210.8 	the city council of the city of Eveleth and its chief clerical
210.9 	officer timely complete their compliance with Minnesota
210.10 	Statutes, section 645.021, subdivisions 2 and 3.
210.11 	(f) Section 16 is effective with respect to a volunteer
210.12 	firefighters relief association listed in column A the day after
210.13 	the governing body of the municipality listed in column B and
210.14 	its chief clerical officer timely complete compliance with
210.15 	Minnesota Statutes, section 645.021, subdivisions 2 and 3.
210.16 	A B
210.17 	              Aurora city of Aurora
210.18 	              Biwabik city of Biwabik
210.19 	              Hoyt Lakes city of Hoyt Lakes
210.20 	              Palo town of White 
210.21 	(g) Section 18 is effective the day after the governing
210.22 	body of the city of Maplewood, the governing body of the city of
210.23 	Oakdale, the Maplewood chief clerical officer, and the Oakdale
210.24 	chief clerical officer complete their compliance with Minnesota
210.25 	Statutes, section 645.021, subdivisions 2 and 3.

210.26 	ARTICLE 14
210.27 	MINNEAPOLIS EMPLOYEES RETIREMENT
210.28 	FUND CHANGES

210.29 	Section 1. Minnesota Statutes 2004, section 43A.17,
210.30 	subdivision 9, is amended to read:
210.31 		Subd. 9.Political subdivision compensation limit.  (a)
210.32 	The salary and the value of all other forms of compensation of a
210.33 	person employed by a political subdivision of this state,
210.34 	excluding a school district, or employed under section 422A.03
210.35 	may not exceed 95 percent of the salary of the governor as set
210.36 	under section 15A.082, except as provided in this subdivision.
211.1 	For purposes of this subdivision, "political subdivision of this
211.2 	state" includes a statutory or home rule charter city, county,
211.3 	town, metropolitan or regional agency, or other political
211.4 	subdivision, but does not include a hospital, clinic, or health
211.5 	maintenance organization owned by such a governmental unit or a
211.6 	retirement plan governed by chapter 422A.
211.7 	(b) Deferred compensation and payroll allocations to
211.8 	purchase an individual annuity contract for an employee are
211.9 	included in determining the employee's salary.  Other forms of
211.10 	compensation which shall be included to determine an employee's
211.11 	total compensation are all other direct and indirect items of
211.12 	compensation which are not specifically excluded by this
211.13 	subdivision.  Other forms of compensation which shall not be
211.14 	included in a determination of an employee's total compensation
211.15 	for the purposes of this subdivision are:
211.16 	(1) employee benefits that are also provided for the
211.17 	majority of all other full-time employees of the political
211.18 	subdivision, vacation and sick leave allowances, health and
211.19 	dental insurance, disability insurance, term life insurance, and
211.20 	pension benefits or like benefits the cost of which is borne by
211.21 	the employee or which is not subject to tax as income under the
211.22 	Internal Revenue Code of 1986;
211.23 	(2) dues paid to organizations that are of a civic,
211.24 	professional, educational, or governmental nature; and
211.25 	(3) reimbursement for actual expenses incurred by the
211.26 	employee which the governing body determines to be directly
211.27 	related to the performance of job responsibilities, including
211.28 	any relocation expenses paid during the initial year of
211.29 	employment.
211.30 	The value of other forms of compensation shall be the
211.31 	annual cost to the political subdivision for the provision of
211.32 	the compensation.
211.33 	(c) The salary of a medical doctor or doctor of osteopathy
211.34 	occupying a position that the governing body of the political
211.35 	subdivision has determined requires an M.D. or D.O. degree is
211.36 	excluded from the limitation in this subdivision.
212.1 	(d) The commissioner may increase the limitation in this
212.2 	subdivision for a position that the commissioner has determined
212.3 	requires special expertise necessitating a higher salary to
212.4 	attract or retain a qualified person.  The commissioner shall
212.5 	review each proposed increase giving due consideration to salary
212.6 	rates paid to other persons with similar responsibilities in the
212.7 	state and nation.  The commissioner may not increase the
212.8 	limitation until the commissioner has presented the proposed
212.9 	increase to the Legislative Coordinating Commission and received
212.10 	the commission's recommendation on it.  The recommendation is
212.11 	advisory only.  If the commission does not give its
212.12 	recommendation on a proposed increase within 30 days from its
212.13 	receipt of the proposal, the commission is deemed to have made
212.14 	no recommendation.

212.15 	Sec. 2. Minnesota Statutes 2004, section 422A.05,
212.16 	subdivision 2c, is amended to read:
212.17 		Subd. 2c.Minneapolis employees retirement fund
212.18 	investment authority.  (a) For investments made on or after July
212.19 	1, 1991, the board shall invest funds only in investments
212.20 	authorized by section 356A.06, subdivision 7.
212.21 	(b) However, in addition to real estate investments
212.22 	authorized under paragraph (a), the board may also make loans to
212.23 	purchasers of Minnesota situs nonfarm residential real estate
212.24 	that is owned by the Minneapolis Employees Retirement Fund.  The
212.25 	loans must be secured by mortgages or deeds of trust.
212.26 	(c) For investments made before July 1, 1991, the board
212.27 	may, but is not required to, comply with paragraph (a).
212.28 	However, with respect to these investments, the board shall act
212.29 	in accordance with subdivision 2a and chapter 356A.
212.30 	(d) The board may certify assets for investment by the
212.31 	State Board of Investment under sections 11A.14 and 11A.17.

212.32 	Sec. 3. Minnesota Statutes 2004, section 422A.06,
212.33 	subdivision 3, is amended to read:
212.34 		Subd. 3.Deposit accumulation fund. (a) The deposit
212.35 	accumulation fund consists of the assets held in the fund,
212.36 	including amounts contributed by or for employees, amounts
213.1 	contributed by the city, amounts contributed by municipal
213.2 	activities supported in whole or in part by revenues other than
213.3 	taxes and amounts contributed by any public corporation, amounts
213.4 	paid by the state, and by income from investments.
213.5 	(b) There must be paid from the fund the amounts required
213.6 	to be transferred to the retirement benefit fund, or the
213.7 	disability benefit fund, refunds of contributions, including the
213.8 	death-while-active refund specified in section 422A.22,
213.9 	subdivision 4, postretirement increases in retirement allowances
213.10 	granted under Laws 1965, chapter 688, or Laws 1969, chapter 859,
213.11 	and expenses of the administration of the retirement fund which
213.12 	were not charged by the retirement board against the income of
213.13 	the retirement benefit fund from investments as the cost of
213.14 	handling the investments of the retirement benefit fund.
213.15 	(c) To the extent that the deposit accumulation fund has
213.16 	insufficient assets to transfer the total value of the required
213.17 	reserves for retirement annuities to either the disability
213.18 	benefit fund under subdivisions 5 and 7 or the retirement
213.19 	benefit fund under subdivisions 5 and 8 as required, the deposit
213.20 	accumulation fund has a transfer amount payable on which an
213.21 	interest charge accrues.  The executive director must determine
213.22 	the interest charge for the period that transfer amount payable
213.23 	remains unpaid at an annual rate equal to five percent plus the
213.24 	percentage increase in the amount of the annual Consumer Price
213.25 	Index for urban wage earners and clerical workers as calculated
213.26 	by the Bureau of Labor Statistics of the United States
213.27 	Department of Labor from the previous June 30.  The interest
213.28 	charge must be reflected in the books of the Minneapolis
213.29 	Employees Retirement Fund and assessed against the deposit
213.30 	accumulation fund based on the average quarterly transfer amount
213.31 	payable balance outstanding.  Any revenue received by the
213.32 	deposit accumulation fund subsequent to unpaid transfers must be
213.33 	transferred from the deposit accumulation fund to the disability
213.34 	benefit fund or to the retirement fund, whichever applies, must
213.35 	first be applied to any remaining interest charge and then must
213.36 	be applied to the principal amount of transfer amount payable
214.1 	outstanding.

214.2 	Sec. 4. Minnesota Statutes 2004, section 422A.06,
214.3 	subdivision 5, is amended to read:
214.4 		Subd. 5.Transfer of reserves to retirement benefit fund;
214.5 	adjustments of annuities and benefits.  (a) Assets equal to the
214.6 	required reserves for retirement annuities as determined in
214.7 	accordance with the appropriate mortality table adopted by the
214.8 	board of trustees based on the experience of the fund as
214.9 	recommended by the commission-retained actuary retained under
214.10 	section 356.214and using the postretirement interest assumption
214.11 	specified in section 356.215, subdivision 8, shall must be
214.12 	transferred to the disability benefit fund as provided in
214.13 	subdivision 7, or the retirement benefit fund, except for any
214.14 	amounts payable from the survivor benefit fund, as of date of
214.15 	retirement.
214.16 	(b) If a full transfer amount is not payable from the
214.17 	deposit accumulation fund, the applicable fund must be credited
214.18 	with an interest-bearing transfer amount receivable.
214.19 	(b) (c) Annuity payments shall must be adjusted in
214.20 	accordance with this chapter, except that no minimum retirement
214.21 	payments described in this chapter shall must include any
214.22 	amounts payable from the survivors' benefit fund or disability
214.23 	benefit fund and supplemented benefits specifically financed by
214.24 	statute.
214.25 	(c) (d) Increases in annuity payments pursuant to under 
214.26 	this section shall be made automatically unless written notice
214.27 	on a form prescribed by the board is filed with the retirement
214.28 	board requesting that the increase not be made.
214.29 	(d) (e) Any additional annuity which began to accrue on
214.30 	July 1, 1973, or which began to accrue on January 1, 1974,
214.31 	pursuant to Laws 1973, chapter 770, section 1, shall must be
214.32 	considered as part of the base amount to be used in determining
214.33 	any postretirement adjustments payable pursuant to under the
214.34 	provisions of subdivision 8.

214.35 	Sec. 5. Minnesota Statutes 2004, section 422A.06,
214.36 	subdivision 7, is amended to read:
215.1 		Subd. 7.Disability benefit fund.  (a) Unless subdivision
215.2 	3, paragraph (c), applies,the required reserves for disability
215.3 	allowances which become effective after December 31, 1973, shall 
215.4 	must be transferred from the deposit accumulation fund to the
215.5 	disability benefit fund.  A proportionate share of income from
215.6 	investments shall must be allocated to this fund and any
215.7 	interest charge under subdivision 3, paragraph (c), must be
215.8 	credited to the fund. There shall be paid From this fund,the
215.9 	disability allowances which become effective after December 31,
215.10 	1973, must be paid.
215.11 	(b) In the event of termination of any disability allowance
215.12 	for any reason other than the death of the recipient, the
215.13 	balance of the required reserves for the disability allowance as
215.14 	of the date of termination shall must be transferred from the
215.15 	disability benefit fund to the deposit accumulation fund.
215.16 	(c) At the end of each fiscal year, as part of the annual
215.17 	actuarial valuation, a determination shall must be made of the
215.18 	required reserves for all disability allowances being paid from
215.19 	the disability benefit fund.  Any excess of assets over
215.20 	actuarial required reserves in the disability benefit fund shall 
215.21 	must be transferred to the deposit accumulation fund. Unless
215.22 	subdivision 3, paragraph (c), applies,any excess of actuarial
215.23 	reserves over assets in the disability benefit fund shall must 
215.24 	be funded by a transfer of the appropriate amount of assets from
215.25 	the deposit accumulation fund.

215.26 	Sec. 6. Minnesota Statutes 2004, section 422A.06,
215.27 	subdivision 8, is amended to read:
215.28 		Subd. 8.Retirement benefit fund.  (a) The retirement
215.29 	benefit fund shall consist consists of amounts held for payment
215.30 	of retirement allowances for members retired pursuant to under 
215.31 	this chapter, including any transfer amount payable under
215.32 	subdivision 3, paragraph (c).
215.33 	(b) Unless subdivision 3, paragraph (c), applies,assets
215.34 	equal to the required reserves for retirement
215.35 	allowances pursuant to under this chapter determined in
215.36 	accordance with the appropriate mortality table adopted by the
216.1 	board of trustees based on the experience of the fund as
216.2 	recommended by the commission-retained actuary shall retained
216.3 	under section 356.214, must be transferred from the deposit
216.4 	accumulation fund to the retirement benefit fund as of the last
216.5 	business day of the month in which the retirement allowance
216.6 	begins.  The income from investments of these assets shall must 
216.7 	be allocated to this fund and any interest charge under
216.8 	subdivision 3, paragraph (c), must be credited to the fund.
216.9 	There shall must be paid from this fund the retirement annuities
216.10 	authorized by law.  A required reserve calculation for the
216.11 	retirement benefit fund must be made by the actuary retained by
216.12 	the Legislative Commission on Pensions and Retirement under
216.13 	section 356.214and must be certified to the retirement board by
216.14 	the commission-retained actuary.
216.15 	(c) The retirement benefit fund shall must be governed by
216.16 	the applicable laws governing the accounting and audit
216.17 	procedures, investment, actuarial requirements, calculation and
216.18 	payment of postretirement benefit adjustments, discharge of any
216.19 	deficiency in the assets of the fund when compared to the
216.20 	actuarially determined required reserves, and other applicable
216.21 	operations and procedures regarding the Minnesota postretirement
216.22 	investment fund in effect on June 30, 1997, established under
216.23 	Minnesota Statutes 1996, section 11A.18, and any legal or
216.24 	administrative interpretations of those laws of the State Board
216.25 	of Investment, the legal advisor to the Board of Investment and
216.26 	the executive director of the State Board of Investment in
216.27 	effect on June 30, 1997.  If a deferred yield adjustment account
216.28 	is established for the Minnesota postretirement investment fund
216.29 	before June 30, 1997, under Minnesota Statutes 1996, section
216.30 	11A.18, subdivision 5, the retirement board shall also establish
216.31 	and maintain a deferred yield adjustment account within this
216.32 	fund.
216.33 	(d) Annually, following the calculation of any
216.34 	postretirement adjustment payable from the retirement benefit
216.35 	fund, the board of trustees shall submit a report to the
216.36 	executive director of the Legislative Commission on Pensions and
217.1 	Retirement and to the commissioner of finance indicating the
217.2 	amount of any postretirement adjustment and the underlying
217.3 	calculations on which that postretirement adjustment amount is
217.4 	based, including the amount of dividends, the amount of
217.5 	interest, and the amount of net realized capital gains or losses
217.6 	utilized in the calculations.
217.7 	(e) With respect to a former contributing member who began
217.8 	receiving a retirement annuity or disability benefit under
217.9 	section 422A.151, paragraph (a), clause (2), after June 30,
217.10 	1997, or with respect to a survivor of a former contributing
217.11 	member who began receiving a survivor benefit under section
217.12 	422A.151, paragraph (a), clause (2), after June 30, 1997, the
217.13 	reserves attributable to the one percent lower amount of the
217.14 	cost-of-living adjustment payable to those annuity or benefit
217.15 	recipients annually must be transferred back to the deposit
217.16 	accumulation fund to the credit of the Metropolitan Airports
217.17 	Commission.  The calculation of this annual reduced
217.18 	cost-of-living adjustment reserve transfer must be reviewed by
217.19 	the actuary retained by the Legislative Commission on Pensions
217.20 	and Retirement under section 356.214.

217.21 	Sec. 7. Minnesota Statutes 2004, section 422A.101,
217.22 	subdivision 3, is amended to read:
217.23 		Subd. 3.State contributions.  (a) Subject to the
217.24 	limitation set forth in paragraph (c), the state shall pay to
217.25 	the Minneapolis Employees Retirement Fund annually an amount
217.26 	equal to the amount calculated under paragraph (b).
217.27 	(b) The payment amount is an amount equal to the financial
217.28 	requirements of the Minneapolis Employees Retirement Fund
217.29 	reported in the actuarial valuation of the fund prepared by the
217.30 	commission-retained actuary pursuant to section 356.215 for the
217.31 	most recent year but based on a target date for full
217.32 	amortization of the unfunded actuarial accrued liabilities by
217.33 	June 30, 2020, less the amount of employee contributions
217.34 	required pursuant to section 422A.10, and the amount of employer
217.35 	contributions required pursuant to subdivisions 1a, 2, and 2a.
217.36 	Payments shall be made September 15 annually.
218.1 	(c) The annual state contribution under this subdivision
218.2 	may not exceed $9,000,000, plus the cost of the annual
218.3 	supplemental benefit determined under section 356.43.
218.4 	(d) If the amount determined under paragraph (b) exceeds
218.5 	$11,910,000 $9,000,000, the excess must be allocated to and paid
218.6 	to the fund by the employers identified in subdivisions 1a and
218.7 	2, other than units of metropolitan government.  Each employer's
218.8 	share of the excess is proportionate to the employer's share of
218.9 	the fund's unfunded actuarial accrued liability as disclosed in
218.10 	the annual actuarial valuation prepared by the actuary
218.11 	retained by the Legislative Commission on Pensions and
218.12 	Retirement under section 356.214compared to the total unfunded
218.13 	actuarial accrued liability attributed to all employers
218.14 	identified in subdivisions 1a and 2, other than units of
218.15 	metropolitan government.  Payments must be made in equal
218.16 	installments as set forth in paragraph (b).

218.17 	Sec. 8. REPEALER.
 218.18 	Minnesota Statutes 2004, section 422A.101, subdivision 4,
218.19 	is repealed.

218.20 	Sec. 9. EFFECTIVE DATE; LOCAL APPROVAL.
 218.21 	Sections 1 to 8 are effective on the day after the city
218.22 	council of the city of Minneapolis and its chief clerical
218.23 	officer timely complete their compliance with Minnesota
218.24 	Statutes, section 645.021, subdivisions 2 and 3.

218.25 	ARTICLE 15
218.26 	ONE PERSON AND SMALL GROUP
218.27 	RETIREMENT CHANGES

218.28 	Section 1. SURVIVOR BENEFIT FOR ST. LOUIS PARK POLICE
218.29 	OFFICER KILLED IN IRAQ CONFLICT.
 218.30 		Subdivision 1.Eligibility. (a) Notwithstanding any
218.31 	provision of Minnesota Statutes, section 353.657, subdivision 1,
218.32 	regarding required length of marriage, an eligible person
218.33 	described in paragraph (b) is authorized to apply for a
218.34 	surviving spouse annuity from the public employees police and
218.35 	fire retirement plan to be computed under Minnesota Statutes,
218.36 	section 353.657, subdivision 2.
219.1 	(b) An eligible person for purposes of paragraph (a) is the
219.2 	surviving spouse of a deceased public employees police and fire
219.3 	retirement plan member who:
219.4 	(1) was born on October 29, 1979;
219.5 	(2) was a member of the public employees police and fire
219.6 	retirement plan commencing on January 24, 2004, due to
219.7 	employment as a police officer by the city of St. Louis Park;
219.8 	and 
219.9 	(3) died on February 21, 2005, while providing military
219.10 	service in Iraq.
219.11 		Subd. 2.Application process. An eligible person
219.12 	described in subdivision 1 is authorized to apply for the
219.13 	applicable surviving spouse annuity on a form or forms provided
219.14 	by the executive director of the Public Employees Retirement
219.15 	Association.  The person must provide sufficient documentation
219.16 	of eligibility to the executive director, as the executive
219.17 	director may prescribe.
219.18 		Subd. 3.Refund repayment authorization. An annuity
219.19 	under this section is in lieu of any death refund to which an
219.20 	eligible person would otherwise be entitled.  If an eligible
219.21 	person has received a death refund, that person is authorized to
219.22 	repay that refund, under the terms specified in Minnesota
219.23 	Statutes, section 353.35, notwithstanding any law to the
219.24 	contrary.
219.25 		Subd. 4.Retroactive application. If a valid benefit
219.26 	application is made by an eligible person under this section,
219.27 	the monthly annuity payments commence retroactive to February
219.28 	21, 2005.

219.29 	Sec. 2. PURCHASE OF PRIOR SERVICE CREDIT.
 219.30 	(a) An eligible person described in paragraph (b) is
219.31 	entitled to purchase up to one year of allowable service credit
219.32 	from the Teachers Retirement Association for the 2003-2004
219.33 	school year.  The service credit purchase under this section
219.34 	must be made in accordance with Minnesota Statutes, section
219.35 	356.551, except as otherwise stated in this section.
219.36 	(b) An eligible person is a person who:
220.1 	(1) is currently a member of the Teachers Retirement
220.2 	Association;
220.3 	(2) was born on April 2, 1949;
220.4 	(3) has been employed by Independent School District No.
220.5 	11, Anoka-Hennepin, since the 1971-1972 school year;
220.6 	(4) applied for and was granted an extended leave of
220.7 	absence from Independent School District No. 11, Anoka-Hennepin,
220.8 	for the 2002-2003, 2003-2004, and 2004-2005 school years under
220.9 	Minnesota Statutes, section 122A.46;
220.10 	(5) was unable to make timely payment for the 2003-2004
220.11 	school year under Minnesota Statutes, section 354.094, because
220.12 	of a problem in transferring funds from the individual's
220.13 	tax-sheltered annuity account; and 
220.14 	(6) was not permitted by the Teachers Retirement
220.15 	Association to make payment after June 30, 2004, with interest.
220.16 	(c) Notwithstanding Minnesota Statutes, section 356.551,
220.17 	payment must be made by September 1, 2005, or prior to
220.18 	termination of service, whichever is earlier, and the employee
220.19 	payment amount is an amount equal to the employee contribution
220.20 	rate in effect during the 2003-2004 school year applied to the
220.21 	eligible individual's salary in the year prior to the leave,
220.22 	plus .708 percent monthly interest from June 30, 2004, until the
220.23 	end of the month in which payment is made.  If the full payment
220.24 	required under this paragraph is made, then notwithstanding
220.25 	Minnesota Statutes, section 354.094, the individual is
220.26 	authorized under Minnesota Statutes, section 354.094, to make
220.27 	the required contribution for the 2004-2005 school year, and any
220.28 	subsequent years of the leave.  Notwithstanding payment
220.29 	deadlines in Minnesota Statutes, section 354.094, the employee
220.30 	contribution for the 2004-2005 school year must be made on or
220.31 	before September 30, 2005, with .708 percent monthly interest
220.32 	from June 30, 2005, until paid.
220.33 	(d) If payment is received under paragraph (c), the
220.34 	executive director of the Teachers Retirement Association shall
220.35 	bill Independent School District No. 11, Anoka-Hennepin, for the
220.36 	employer contribution that would have been made on behalf of the
221.1 	eligible person for the 2003-2004 fiscal year under Minnesota
221.2 	Statutes, section 354.094.  The remainder of the full actuarial
221.3 	value payment under Minnesota Statutes, section 356.551, is
221.4 	waived.  If the school district fails to make payment under this
221.5 	paragraph within 30 days of notification of the amount due, the
221.6 	executive director shall notify the commissioner of the
221.7 	Department of Finance of that fact and the employer payment
221.8 	amount must be deducted from any subsequent state aid to the
221.9 	school district.

221.10 	Sec. 3. EFFECTIVE DATE.
 221.11 	(a) For purposes of determining whether section 1 becomes
221.12 	effective, the board of trustees of the Public Employees
221.13 	Retirement Association must be considered to be comparable to
221.14 	the city council of a local government unit.
221.15 	(b) Section 1 is effective on the day after the board of
221.16 	trustees of the Public Employees Retirement Association and its
221.17 	executive director complete in a timely manner their compliance
221.18 	with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
221.19 	(c) Section 2 is effective on the day following final
221.20 	enactment.

221.21 	ARTICLE 16
221.22 	TEACHER RETIREMENT FUND AND
221.23 	BENEFIT RESTRUCTURING

221.24 	Section 1. [128D.18] FUNDING OF UNFUNDED PENSION
221.25 	LIABILITIES.
221.26 		Subdivision 1.Financing authority. Notwithstanding any
221.27 	other law to the contrary, Special School District No. 1,
221.28 	Minneapolis, may finance all or a portion of the current and
221.29 	future unfunded actuarial accrued liability of the former
221.30 	Minneapolis Teachers Retirement Fund Association through the
221.31 	issuance of pension obligation bonds under this section.
221.32 		Subd. 2.Use of proceeds. The proceeds of the bonds
221.33 	issued, less costs, must be paid to the State Board of
221.34 	Investment to be deposited as a payment toward the funding of
221.35 	the unfunded actuarial accrued liability of the former
221.36 	Minneapolis Teachers Retirement Fund Association owed by Special
222.1 	School District No. 1, Minneapolis, and must be credited as an
222.2 	asset of the Teachers Retirement Association.
222.3 		Subd. 3.Appropriations. Notwithstanding any law to the
222.4 	contrary, special direct state aid, matching aid, and other
222.5 	contributions levied for the Teachers Retirement Association
222.6 	under section 354A.12, subdivisions 3a and 3b, and amortization
222.7 	or supplementary amortization state aid reallocated to the
222.8 	Teachers Retirement Association under section 423A.02 are
222.9 	pledged and appropriated to the payment of the bonds and must be
222.10 	transferred to Special School District No. 1, Minneapolis, and
222.11 	additional employer contributions levied by Special School
222.12 	District No. 1, Minneapolis, under section 354A.12, subdivision
222.13 	3b, shall be retained by the district to the extent required to
222.14 	pay debt service on the bonds for the succeeding 12-month period
222.15 	or a longer period established pursuant to the resolution of the
222.16 	district authorizing the bonds.
222.17 		Subd. 4.No election. No election of the voters of the
222.18 	district shall be required to issue bonds authorized by this
222.19 	section.
222.20 		Subd. 5.Terms and sale of bonds. The bonds issued
222.21 	pursuant to this section shall bear interest at the rate or
222.22 	rates and mature on the date or dates not more than 30 years
222.23 	from the date of issue as the district shall determine by
222.24 	resolution.  Interest may be at a fixed or variable rate.  The
222.25 	bonds may be sold and issued on terms and in a manner that
222.26 	Special School District No. 1, Minneapolis, determines is in its
222.27 	best interests and in the best interests of the state.
222.28 		Subd. 6.This section prevails. Notwithstanding any
222.29 	other law to the contrary, this section shall apply to the
222.30 	issuance and sale of the bonds and to the purposes for which the
222.31 	bonds may be issued.
222.32 		Subd. 7.State pledge against impairment of
222.33 	contracts. The state pledges and agrees with the holders of
222.34 	bonds issued under this section that the state will not limit or
222.35 	alter the rights vested in Special School District No. 1,
222.36 	Minneapolis, to fulfill the terms of any agreements made with
223.1 	the bondholders or in any way impair the rights and remedies of
223.2 	the holders until the bonds, together with interest on them,
223.3 	with interest on any unpaid installments of interest, and all
223.4 	costs and expenses in connection with any action or proceeding
223.5 	by or on behalf of the bondholders, are fully met and
223.6 	discharged.  The district may include this pledge and agreement
223.7 	of the state in any agreement with the holders of bonds issued
223.8 	under this section.
223.9 		Subd. 8.Not net debt. Bonds ended under this section
223.10 	not in default shall not be deemed net debt under any law
223.11 	limiting indebtedness.
223.12 		Subd. 9.Aid reduction for repayment. If the amount
223.13 	transferred by Special School District No. 1, Minneapolis, to
223.14 	the paying agent for the bonds is insufficient to pay required
223.15 	debt service, the paying agent shall notify the commissioner of
223.16 	finance.  The commissioner shall reduce any and all unrestricted
223.17 	state aids generally available to the school district by the
223.18 	amount of the deficiency and pay the amounts to the paying agent
223.19 	for the bonds for the payment of debt service.  If the state
223.20 	aids are reduced pursuant to this subdivision, the district may
223.21 	levy a tax in the amount of the reduction in state aid.
223.22 	Notwithstanding any other law to the contrary, no election of
223.23 	the voters of the district is required for the levy and the levy
223.24 	is not subject to other levy limitations.

223.25 	Sec. 2. [128D.181] AID REDEDICATION.
223.26 	Notwithstanding any law to the contrary and subject to
223.27 	section 2, special direct state aid previously paid to the
223.28 	Minneapolis Teachers Retirement Fund Association under section
223.29 	354A.12, subdivision 3a, must be paid to the Teachers Retirement
223.30 	Association.

223.31 	Sec. 3. Minnesota Statutes 2004, section 354.05,
223.32 	subdivision 2, is amended to read:
223.33 		Subd. 2.Teacher.  (a) "Teacher" means:
223.34 	(1) a person who renders service as a teacher, supervisor,
223.35 	principal, superintendent, librarian, nurse, counselor, social
223.36 	worker, therapist, or psychologist in a public school of the
224.1 	state located outside of the corporate limits of a city of the
224.2 	first class the city of Duluth or the city of St. Paul, or in
224.3 	any charter school, irrespective of the location of the school,
224.4 	or in any charitable, penal, or correctional institutions of a
224.5 	governmental subdivision, or who is engaged in educational
224.6 	administration in connection with the state public school
224.7 	system, but excluding the University of Minnesota, whether the
224.8 	position be a public office or an employment, and not including
224.9 	the members or officers of any general governing or managing
224.10 	board or body;
224.11 	(2) an employee of the Teachers Retirement Association;
224.12 	(3) a person who renders teaching service on a part-time
224.13 	basis and who also renders other services for a single employing
224.14 	unit.  A person whose teaching service comprises at least 50
224.15 	percent of the combined employment salary is a member of the
224.16 	association for all services with the single employing unit.  If
224.17 	the person's teaching service comprises less than 50 percent of
224.18 	the combined employment salary, the executive director must
224.19 	determine whether all or none of the combined service is covered
224.20 	by the association; or
224.21 	(4) a person who is not covered by the plans established
224.22 	under chapter 352D, 354A, or 354B and who is employed by the
224.23 	Board of Trustees of the Minnesota State Colleges and
224.24 	Universities system in an unclassified position as:
224.25 	(i) a president, vice-president, or dean;
224.26 	(ii) a manager or a professional in an academic or an
224.27 	academic support program other than specified in item (i);
224.28 	(iii) an administrative or a service support faculty
224.29 	position; or
224.30 	(iv) a teacher or a research assistant.
224.31 	(b) "Teacher" does not mean:
224.32 	(1) a person who works for a school or institution as an
224.33 	independent contractor as defined by the Internal Revenue
224.34 	Service;
224.35 	(2) a person who renders part-time teaching service or who
224.36 	is a customized trainer as defined by the Minnesota State
225.1 	Colleges and Universities system if (i) the service is
225.2 	incidental to the regular nonteaching occupation of the person;
225.3 	and (ii) the employer stipulates annually in advance that the
225.4 	part-time teaching service or customized training service will
225.5 	not exceed 300 hours in a fiscal year and retains the
225.6 	stipulation in its records; and (iii) the part-time teaching
225.7 	service or customized training service actually does not exceed
225.8 	300 hours in a fiscal year; or
225.9 	(3) a person exempt from licensure under section 122A.30.

225.10 	Sec. 4. Minnesota Statutes 2004, section 354.05,
225.11 	subdivision 13, is amended to read:
225.12 		Subd. 13.Allowable service.  "Allowable service" means:
225.13 	(1) Any service rendered by a teacher for which on or
225.14 	before July 1, 1957, the teacher's account in the retirement
225.15 	fund was credited by reason of employee contributions in the
225.16 	form of salary deductions, payments in lieu of salary
225.17 	deductions, or in any other manner authorized by Minnesota
225.18 	Statutes 1953, sections 135.01 to 135.13, as amended by Laws
225.19 	1955, chapters 361, 549, 550, 611, or
225.20 	(2) Any service rendered by a teacher for which on or
225.21 	before July 1, 1961, the teacher elected to obtain credit for
225.22 	service by making payments to the fund pursuant to Minnesota
225.23 	Statutes 1980, section 354.09 and section 354.51, or
225.24 	(3) Any service rendered by a teacher after July 1, 1957,
225.25 	for any calendar month when the member receives salary from
225.26 	which deductions are made, deposited and credited in the fund,
225.27 	or
225.28 	(4) Any service rendered by a person after July 1, 1957,
225.29 	for any calendar month where payments in lieu of salary
225.30 	deductions are made, deposited and credited into the fund as
225.31 	provided in Minnesota Statutes 1980, section 354.09, subdivision
225.32 	4, and section 354.53, or
225.33 	(5) Any service rendered by a teacher for which the teacher
225.34 	elected to obtain credit for service by making payments to the
225.35 	fund pursuant to Minnesota Statutes 1980, section 354.09,
225.36 	subdivisions 1 and 4, sections 354.50, 354.51, Minnesota
226.1 	Statutes 1957, section 135.41, subdivision 4, Minnesota Statutes
226.2 	1971, section 354.09, subdivision 2, or Minnesota Statutes, 1973
226.3 	Supplement, section 354.09, subdivision 3, or
226.4 	(6) Both service during years of actual membership in the
226.5 	course of which contributions were currently made and service in
226.6 	years during which the teacher was not a member but for which
226.7 	the teacher later elected to obtain credit by making payments to
226.8 	the fund as permitted by any law then in effect, or
226.9 	(7) Any service rendered where contributions were made and
226.10 	no allowable service credit was established because of the
226.11 	limitations contained in Minnesota Statutes 1957, section
226.12 	135.09, subdivision 2, as determined by the ratio between the
226.13 	amounts of money credited to the teacher's account in a fiscal
226.14 	year and the maximum retirement contribution allowable for that
226.15 	year, or
226.16 	(8) MS 2002 (Expired)
226.17 	(9) A period of time during which a teacher who is a state
226.18 	employee was on strike without pay, not to exceed a period of
226.19 	one year, if the teacher makes a payment in lieu of salary
226.20 	deductions or makes a prior service credit purchase payment,
226.21 	whichever applies.  If the payment is made within 12 months, the
226.22 	payment by the teacher must be an amount equal to the employee
226.23 	and employer contribution rates set forth in section 354.42,
226.24 	subdivisions 2 and 3, applied to the teacher's rate of salary in
226.25 	effect on the conclusion of the strike for the period of the
226.26 	strike without pay, plus compound interest at a monthly rate of
226.27 	0.71 percent from the last day of the strike until the date of
226.28 	payment.  If the payment by the employee is not made within 12
226.29 	months, the payment must be in an amount equal to the payment
226.30 	amount determined under section 356.55 or 356.551, whichever
226.31 	applies, or 
226.32 	(10) A period of service before July 1, 2005, that was
226.33 	credited by the Minneapolis Teachers Retirement Fund Association
226.34 	and that was rendered by a teacher as an employee of Special
226.35 	School District No. 1, Minneapolis, or by an employee of the
226.36 	Minneapolis Teachers Retirement Fund Association who was a
227.1 	member of the Minneapolis Teachers Retirement Fund Association
227.2 	by virtue of that employment, who has not begun receiving an
227.3 	annuity or other retirement benefit from the former Minneapolis
227.4 	Teachers Retirement Fund Association calculated in whole or in
227.5 	part on that service before July 1, 2005, and who has not taken
227.6 	a refund of member contributions related to that service unless
227.7 	the refund is repaid under section 354.50, subdivision 4.

227.8 	Sec. 5. Minnesota Statutes 2004, section 354.42,
227.9 	subdivision 2, is amended to read:
227.10 		Subd. 2.Employee. (a) The employee contribution to the
227.11 	fund is an amount equal to 5.0 the following percentage of the
227.12 	salary of a member:
227.13 	(1) after July 1, 2005, for a teacher employed by Special
227.14 	School District No. 1, Minneapolis, 5.5 percent if the teacher
227.15 	is a coordinated member and 9.0 percent if the teacher is a
227.16 	basic member;
227.17 	(2) for every other teacher, after July 1, 2005, 5.5
227.18 	percent of if the salary of every teacher is a coordinated
227.19 	member and 9.0 percent of if the salary of every teacher is a 
227.20 	basic member.
227.21 	(b) This contribution must be made by deduction from
227.22 	salary.  Where any portion of a member's salary is paid from
227.23 	other than public funds, the member's employee contribution must
227.24 	be based on the entire salary received.

227.25 	Sec. 6. Minnesota Statutes 2004, section 354.42,
227.26 	subdivision 3, is amended to read:
227.27 		Subd. 3.Employer. (a) The employer contribution to the
227.28 	fund by Special School District No. 1, Minneapolis, after July
227.29 	1, 2005, is an amount equal to 8.64 percent of the salary of
227.30 	each of its teachers who is a coordinated member and 12.64
227.31 	percent of the salary of each of its teachers who is a basic
227.32 	member.
227.33 	(b) The employer contribution to the fund for every other
227.34 	employer, after July 1, 2005,is an amount equal to 5.0 5.5 
227.35 	percent of the salary of each coordinated member and 9.0 percent
227.36 	of the salary of each basic member.
228.1 	(c) As payment toward the cost of the unfunded actuarial
228.2 	accrued liability transferred to the Teachers Retirement
228.3 	Association from the former Minneapolis Teachers Retirement Fund
228.4 	Association, a supplemental contribution of 0.26 percent of the
228.5 	covered payroll of the fund must be made each fiscal year
228.6 	through June 30, 2035.  One-third of the dollar amount of this
228.7 	supplemental contribution must be paid each by Special School
228.8 	District No. 1, Minneapolis, the city of Minneapolis, and the
228.9 	state of Minnesota.  On or before October 1, annually, the
228.10 	executive director of the Teachers Retirement Association shall
228.11 	calculate the expected total dollar amount of the supplemental
228.12 	contribution for the calendar year and shall certify the portion
228.13 	payable by each governmental entity.  The amount is payable in
228.14 	full on or before the following June 1.

228.15 	Sec. 7. Minnesota Statutes 2004, section 354.44,
228.16 	subdivision 6, is amended to read:
228.17 		Subd. 6.Computation of formula program retirement
228.18 	annuity.  (a) The formula retirement annuity must be computed in
228.19 	accordance with the applicable provisions of the formulas stated
228.20 	in paragraph (b) or (d) on the basis of each member's average
228.21 	salary for the period of the member's formula service credit.
228.22 	For all years of formula service credit, "average salary,"
228.23 	for the purpose of determining the member's retirement annuity,
228.24 	means the average salary upon which contributions were made and
228.25 	upon which payments were made to increase the salary limitation
228.26 	provided in Minnesota Statutes 1971, section 354.511, for the
228.27 	highest five successive years of formula service credit
228.28 	provided, however, that such "average salary" shall not include
228.29 	any more than the equivalent of 60 monthly salary payments.
228.30 	Average salary must be based upon all years of formula service
228.31 	credit if this service credit is less than five years.
228.32 	(b) This paragraph, in conjunction with paragraph (c),
228.33 	applies to a person who first became a member of the association
228.34 	or a member of a pension fund listed in section 356.30,
228.35 	subdivision 3, before July 1, 1989, unless paragraph (d), in
228.36 	conjunction with paragraph (e), produces a higher annuity
229.1 	amount, in which case paragraph (d) applies.  The average salary
229.2 	as defined in paragraph (a), multiplied by the following
229.3 	percentages per year of formula service credit shall determine
229.4 	the amount of the annuity to which the member qualifying
229.5 	therefor is entitled for service rendered before July 1, 2005:
229.6 	Coordinated Member   Basic Member
229.7 	Each year of service     the percent        the percent
229.8 	during first ten         specified in       specified in
229.9 	section 356.315,   section 356.315,
229.10 	subdivision 1,     subdivision 3,
229.11 	per year           per year
229.12 	Each year of service     the percent        the percent
229.13 	thereafter               specified in       specified in
229.14 	section 356.315,   section 356.315,
229.15 	subdivision 2,     subdivision 4,
229.16 	per year           per year
229.17 	For service rendered on or after July 1, 2005, the average
229.18 	salary as defined in paragraph (a), multiplied by the following
229.19 	percentages per year of service credit, determines the amount of
229.20 	the annuity to which the member qualifying therefor is entitled:
229.21 	Coordinated Member Basic Member 
229.22 	Each year of service the percent the percent 
229.23 	during first ten specified in specified in 
229.24 	section 356.315,section 356.315,
229.25 	subdivision 1a,subdivision 3,
229.26 	per year per year 
229.27 	Coordinated Member Basic Member 
229.28 	Each year of service the percent the percent 
229.29 	after ten years of specified in specified in 
229.30 	service section 356.315,section 356.315,
229.31 	subdivision 2a,subdivision 4,
229.32 	per year per year 
229.33 	(c)(i) This paragraph applies only to a person who first
229.34 	became a member of the association or a member of a pension fund
229.35 	listed in section 356.30, subdivision 3, before July 1, 1989,
229.36 	and whose annuity is higher when calculated under paragraph (b),
230.1 	in conjunction with this paragraph than when calculated under
230.2 	paragraph (d), in conjunction with paragraph (e).
230.3 	(ii) Where any member retires prior to normal retirement
230.4 	age under a formula annuity, the member shall be paid a
230.5 	retirement annuity in an amount equal to the normal annuity
230.6 	provided in paragraph (b) reduced by one-quarter of one percent
230.7 	for each month that the member is under normal retirement age at
230.8 	the time of retirement except that for any member who has 30 or
230.9 	more years of allowable service credit, the reduction shall be
230.10 	applied only for each month that the member is under age 62.
230.11 	(iii) Any member whose attained age plus credited allowable
230.12 	service totals 90 years is entitled, upon application, to a
230.13 	retirement annuity in an amount equal to the normal annuity
230.14 	provided in paragraph (b), without any reduction by reason of
230.15 	early retirement.
230.16 	(d) This paragraph applies to a member who has become at
230.17 	least 55 years old and first became a member of the association
230.18 	after June 30, 1989, and to any other member who has become at
230.19 	least 55 years old and whose annuity amount when calculated
230.20 	under this paragraph and in conjunction with paragraph (e), is
230.21 	higher than it is when calculated under paragraph (b), in
230.22 	conjunction with paragraph (c). For a basic member,the average
230.23 	salary, as defined in paragraph (a) multiplied by the percent
230.24 	specified by section 356.315, subdivision 4, for each year of
230.25 	service for a basic member and by the percent specified in
230.26 	section 356.315, subdivision 2, for each year of service for a
230.27 	coordinated member shall determine the amount of the retirement
230.28 	annuity to which the basic member is entitled. For a
230.29 	coordinated member, the average salary, as defined in paragraph
230.30 	(a) multiplied by the percent specified in section 356.315,
230.31 	subdivision 2, for each year of service rendered before July 1,
230.32 	2005, and by the percent specified in section 356.315,
230.33 	subdivision 2a, for each year of service rendered on or after
230.34 	July 1, 2005, determines the amount of the retirement annuity to
230.35 	which the coordinated member is entitled.
230.36 	(e) This paragraph applies to a person who has become at
231.1 	least 55 years old and first becomes a member of the association
231.2 	after June 30, 1989, and to any other member who has become at
231.3 	least 55 years old and whose annuity is higher when calculated
231.4 	under paragraph (d) in conjunction with this paragraph than when
231.5 	calculated under paragraph (b), in conjunction with paragraph
231.6 	(c).  An employee who retires under the formula annuity before
231.7 	the normal retirement age shall be paid the normal annuity
231.8 	provided in paragraph (d) reduced so that the reduced annuity is
231.9 	the actuarial equivalent of the annuity that would be payable to
231.10 	the employee if the employee deferred receipt of the annuity and
231.11 	the annuity amount were augmented at an annual rate of three
231.12 	percent compounded annually from the day the annuity begins to
231.13 	accrue until the normal retirement age.
231.14 	(f) No retirement annuity is payable to a former employee
231.15 	with a salary that exceeds 95 percent of the governor's salary
231.16 	unless and until the salary figures used in computing the
231.17 	highest five successive years average salary under paragraph (a)
231.18 	have been audited by the Teachers Retirement Association and
231.19 	determined by the executive director to comply with the
231.20 	requirements and limitations of section 354.05, subdivisions 35
231.21 	and 35a.

231.22 	Sec. 8. [354.70] CONSOLIDATION OF THE MINNEAPOLIS
231.23 	TEACHERS RETIREMENT FUND ASSOCIATION.
231.24 		Subdivision 1.Membership transfer. All active,
231.25 	inactive, and retired members of the Minneapolis Teachers
231.26 	Retirement Fund Association are transferred to the Teachers
231.27 	Retirement Association and are no longer members of the
231.28 	Minneapolis Teachers Retirement Fund Association as of the
231.29 	effective date of this section.
231.30 		Subd. 2.Tra membership. A person first hired as a
231.31 	teacher by Special School District No. 1, Minneapolis, after the
231.32 	effective date of this section and who is a teacher as defined
231.33 	in section 354.05, subdivision 2, is a member of the Teachers
231.34 	Retirement Association for the person's teaching service.
231.35 		Subd. 3.Service credit and liability transfer. All
231.36 	allowable service and salary credit of the members and other
232.1 	individuals transferred under subdivision 1 as specified in the
232.2 	records of the Minneapolis Teachers Retirement Fund Association
232.3 	on the transfer date is allowable service credit under section
232.4 	354.05, subdivision 13, formula service credit under section
232.5 	354.05, subdivision 25, and salary credit under section 354.05,
232.6 	subdivision 35, for the Teachers Retirement Association.
232.7 		Subd. 4.Transfer of records. On the effective date of
232.8 	this section, the chief administrative officer of the
232.9 	Minneapolis Teachers Retirement Fund Association shall effect a
232.10 	transfer of all records and documents relating to the funds and
232.11 	the benefit plans of the association to the executive director
232.12 	of the Teachers Retirement Association.  To the extent possible,
232.13 	original copies of all records and documents must be
232.14 	transferred.  The chief administrative officer of the
232.15 	Minneapolis Teachers Retirement Fund Association shall certify
232.16 	the accuracy of all records and documents for which the transfer
232.17 	of original copies was not possible.
232.18 		Subd. 5.Transfer of assets. (a) On the effective date
232.19 	of this section, the chief administrative officer of the
232.20 	Minneapolis Teachers Retirement Fund Association shall transfer
232.21 	to the Teachers Retirement Association the entire assets of the
232.22 	Minneapolis Teachers Retirement Fund Association.  The transfer
232.23 	of the assets of the Minneapolis Teachers Retirement Fund
232.24 	Association must include any accounts receivable that are
232.25 	determined by the executive director of the State Board of
232.26 	Investment as reasonably capable of being collected.  Legal
232.27 	title to account receivables that are determined by the
232.28 	executive director of the State Board of Investment as not
232.29 	reasonably capable of being collected transfers to Special
232.30 	School District No. 1, Minneapolis, as of the date of the
232.31 	determination of the executive director of the State Board of
232.32 	Investment.  If the account receivables transferred to Special
232.33 	School District No. 1, Minneapolis, are subsequently recovered
232.34 	by the school district, the superintendent of Special School
232.35 	District No. 1, Minneapolis, shall transfer the recovered amount
232.36 	to the executive director of the Teachers Retirement
233.1 	Association, in cash, for deposit in the teachers retirement
233.2 	fund, less the reasonable expenses of the school district
233.3 	related to the recovery.
233.4 	(b) As of the effective date of this section, subject to
233.5 	the authority of the State Board of Investment, the board of
233.6 	directors of the Teachers Retirement Association has legal title
233.7 	to and management responsibility for any transferred assets
233.8 	under this subdivision as trustees for any person having a
233.9 	beneficial interest in the Minneapolis Teachers Retirement Fund
233.10 	Association.  The Teachers Retirement Association is the
233.11 	successor in interest for all claims for and against the former
233.12 	coordinated program of the Minneapolis Teachers Retirement Fund
233.13 	Association with respect to the retirement fund association,
233.14 	except a claim against the Minneapolis Teachers Retirement Fund
233.15 	Association or any person connected with the fund association in
233.16 	a fiduciary capacity, based on any act or acts by that person
233.17 	which were not done in good faith and which constituted a breach
233.18 	of the obligation of the person as a fiduciary.  As the
233.19 	successor in interest, the Teachers Retirement Association may
233.20 	assert any applicable defense in any judicial proceeding which
233.21 	the board of the Minneapolis Teachers Retirement Fund
233.22 	Association would have otherwise been entitled to assert
233.23 	relating to the coordinated program.
233.24 	(c) From the assets of the Minneapolis Teachers Retirement
233.25 	Fund Association transferred to the Teachers Retirement
233.26 	Association, an amount equal to the percentage figure that
233.27 	represents the ratio between the market value of the Minnesota
233.28 	postretirement investment fund as of June 30, 2005, and the
233.29 	required reserves of the Minnesota postretirement investment
233.30 	fund as of June 30, 2005, applied to the present value of future
233.31 	benefits payable to annuitants of the former Minneapolis
233.32 	Teachers Retirement Fund Association as of June 30, 2005,
233.33 	including any postretirement adjustment from the Minnesota
233.34 	postretirement investment fund expected to be payable on January
233.35 	1, 2006, must be transferred to the Minnesota postretirement
233.36 	investment fund.  The executive director of the State Board of
234.1 	Investment shall estimate this ratio at the time of the
234.2 	transfer.  By January 1, 2006, after all necessary financial
234.3 	information becomes available to determine the actual funded
234.4 	ratio of the Minnesota postretirement investment fund, the
234.5 	postretirement fund must refund to the Teachers Retirement
234.6 	Association any excess assets or the Teachers Retirement
234.7 	Association must contribute any deficiency to the Minnesota
234.8 	postretirement investment fund with interest under section
234.9 	11A.18, subdivision 6.  The balance of the assets of the former
234.10 	Minneapolis Teachers Retirement Fund Association after the
234.11 	transfer to the Minnesota postretirement investment fund must be
234.12 	credited to the Teachers Retirement Association.
234.13 	If the assets transferred by the Minneapolis Teachers
234.14 	Retirement Fund Association to the Teachers Retirement
234.15 	Association are insufficient to meet its obligation to the
234.16 	Minnesota postretirement investment fund, additional assets must
234.17 	be transferred by the executive director of the Teachers
234.18 	Retirement Association to meet the amount required.
234.19 		Subd. 6.Benefit calculation. (a) For every deferred,
234.20 	inactive, disabled, and retired member of the Minneapolis
234.21 	Teachers Retirement Fund Association transferred under
234.22 	subdivision 1, and the survivors of these members, annuities or
234.23 	benefits earned before the date of the transfer, other than
234.24 	future postretirement adjustments, must be calculated and paid
234.25 	by the Teachers Retirement Association under the laws, articles
234.26 	of incorporation, and bylaws of the former Minneapolis Teachers
234.27 	Retirement Fund Association that were in effect relative to the
234.28 	person on the date of the person's termination of active service
234.29 	covered by the former Minneapolis Teachers Retirement Fund
234.30 	Association.
234.31 	(b) Former Minneapolis Teachers Retirement Fund Association
234.32 	members who retired before July 1, 2005, must receive
234.33 	postretirement adjustments after December 31, 2005, only as
234.34 	provided in section 11A.18.  All other benefit recipients of the
234.35 	former Minneapolis Teachers Retirement Fund Association must
234.36 	receive postretirement adjustments after December 31, 2005, only
235.1 	as provided in section 356.41.
235.2 		Subd. 7.Termination of the minneapolis teachers
235.3 	retirement fund association. As of the effective date of this
235.4 	section and upon the transfer of administration, records,
235.5 	assets, and liabilities from the Minneapolis Teachers Retirement
235.6 	Fund Association to the Teachers Retirement Association, the
235.7 	Minneapolis Teachers Retirement Fund Association ceases to exist
235.8 	as a Minnesota public pension plan.

235.9 	Sec. 9. [354.75] MINNEAPOLIS EMPLOYEES RETIREMENT FUND
235.10 	STATE AID REDEDICATED.
235.11 		Subdivision 1.Appropriation. The positive difference,
235.12 	if any, between the actual state aid paid to the Minneapolis
235.13 	Employees Retirement Fund under section 422A.101, subdivision 3,
235.14 	and $8,065,000 annually is appropriated from the general fund to
235.15 	the commissioner of finance for deposit in the Teachers
235.16 	Retirement Association to offset all or a portion of the current
235.17 	and future unfunded actuarial accrued liability of the
235.18 	Minneapolis Teachers Retirement Fund Association.
235.19 		Subd. 2.Financial requirements. The appropriation in
235.20 	subdivision 1 is available to the extent that financial
235.21 	requirements of the Minneapolis Employees Retirement Fund under
235.22 	section 422A.101, subdivision 3, have been satisfied.

235.23 	Sec. 10. Minnesota Statutes 2004, section 354A.011,
235.24 	subdivision 15a, is amended to read:
235.25 		Subd. 15a.Normal retirement age.  "Normal retirement
235.26 	age" means age 65 for a person who first became a member of the
235.27 	coordinated program of the Minneapolis or St. Paul Teachers
235.28 	Retirement Fund Association or the new law coordinated program
235.29 	of the Duluth Teachers Retirement Fund Association or a member
235.30 	of a pension fund listed in section 356.30, subdivision 3,
235.31 	before July 1, 1989.  For a person who first became a member of
235.32 	the coordinated program of the Minneapolis or St. Paul Teachers
235.33 	Retirement Fund Association or the new law coordinated program
235.34 	of the Duluth Teachers Retirement Fund Association after June
235.35 	30, 1989, normal retirement age means the higher of age 65 or
235.36 	retirement age, as defined in United States Code, title 42,
236.1 	section 416(l), as amended, but not to exceed age 66.  For a
236.2 	person who is a member of the basic program of the Minneapolis
236.3 	or St. Paul Teachers Retirement Fund Association or the old law
236.4 	coordinated program of the Duluth Teachers Retirement Fund
236.5 	Association, normal retirement age means the age at which a
236.6 	teacher becomes eligible for a normal retirement annuity
236.7 	computed upon meeting the age and service requirements specified
236.8 	in the applicable provisions of the articles of incorporation or
236.9 	bylaws of the respective teachers retirement fund association.

236.10 	Sec. 11. Minnesota Statutes 2004, section 354A.011,
236.11 	subdivision 27, is amended to read:
236.12 		Subd. 27.Teacher.  (a) "Teacher" means any person who
236.13 	renders service for a public school district, other than a
236.14 	charter school, located in the corporate limits of one of the
236.15 	cities of the first class which was so classified on January 1,
236.16 	1979 Duluth and St. Paul, as any of the following:
236.17 	(1) a full-time employee in a position for which a valid
236.18 	license from the state Department of Education is required;
236.19 	(2) an employee of the teachers retirement fund association
236.20 	located in the city of the first class unless the employee has
236.21 	exercised the option pursuant to Laws 1955, chapter 10, section
236.22 	1, to retain membership in the Minneapolis Employees Retirement
236.23 	Fund established pursuant to chapter 422A;
236.24 	(3) a part-time employee in a position for which a valid
236.25 	license from the state Department of Education is required; or
236.26 	(4) a part-time employee in a position for which a valid
236.27 	license from the state Department of Education is required who
236.28 	also renders other nonteaching services for the school district,
236.29 	unless the board of trustees of the teachers retirement fund
236.30 	association determines that the combined employment is on the
236.31 	whole so substantially dissimilar to teaching service that the
236.32 	service may not be covered by the association.
236.33 	(b) The term does not mean any person who renders service
236.34 	in the school district as any of the following:
236.35 	(1) an independent contractor or the employee of an
236.36 	independent contractor;
237.1 	(2) an employee who is a full-time teacher covered by the
237.2 	Teachers Retirement Association or by another teachers
237.3 	retirement fund association established pursuant to this chapter
237.4 	or chapter 354;
237.5 	(3) an employee exempt from licensure pursuant to section
237.6 	122A.30;
237.7 	(4) an employee who is a teacher in a technical college
237.8 	located in a city of the first class unless the person elects
237.9 	coverage by the applicable first class city teacher retirement
237.10 	fund association under section 354B.21, subdivision 2;
237.11 	(5) a teacher employed by a charter school, irrespective of
237.12 	the location of the school; or
237.13 	(6) an employee who is a part-time teacher in a technical
237.14 	college in a city of the first class and who has elected
237.15 	coverage by the applicable first class city teacher retirement
237.16 	fund association under section 354B.21, subdivision 2, but (i)
237.17 	the teaching service is incidental to the regular nonteaching
237.18 	occupation of the person; (ii) the applicable technical college
237.19 	stipulates annually in advance that the part-time teaching
237.20 	service will not exceed 300 hours in a fiscal year; and (iii)
237.21 	the part-time teaching actually does not exceed 300 hours in the
237.22 	fiscal year to which the certification applies.

237.23 	Sec. 12. Minnesota Statutes 2004, section 354A.021,
237.24 	subdivision 1, is amended to read:
237.25 		Subdivision 1.Establishment.  There is established a
237.26 	teachers retirement fund association in each of the cities of
237.27 	the first class which were so classified on January 1,
237.28 	1979 Duluth and St. Paul.  The associations shall be known
237.29 	respectively as the "Duluth Teachers Retirement Fund
237.30 	Association," the "Minneapolis Teachers Retirement Fund
237.31 	Association" and the "St. Paul Teachers Retirement Fund
237.32 	Association."  Each association shall be a continuation of the
237.33 	teachers retirement fund association with the same corporate
237.34 	name established pursuant to the authorization contained in Laws
237.35 	1909, chapter 343, section 1.

237.36 	Sec. 13. Minnesota Statutes 2004, section 354A.092, is
238.1 	amended to read:
238.2 	354A.092 SABBATICAL LEAVE.
238.3 	Any teacher in the coordinated program of either the
238.4 	Minneapolis Teachers Retirement Fund Association or the St.
238.5 	Paul Teachers Retirement Fund Association or any teacher in the
238.6 	new law coordinated program of the Duluth Teachers Retirement
238.7 	Fund Association who is granted a sabbatical leave shall be
238.8 	entitled to receive allowable service credit in the applicable
238.9 	association for periods of sabbatical leave.  To obtain the
238.10 	service credit, the teacher on sabbatical leave shall make an
238.11 	employee contribution to the applicable association.  No teacher
238.12 	shall be entitled to receive more than three years of allowable
238.13 	service credit pursuant to this section for a period or periods
238.14 	of sabbatical leave during any ten consecutive fiscal or
238.15 	calendar years, whichever is the applicable plan year for the
238.16 	teachers retirement fund association.  If the teacher granted a
238.17 	sabbatical leave makes the employee contribution for a period of
238.18 	sabbatical leave pursuant to this section, the employing unit
238.19 	shall make an employer contribution on behalf of the teacher to
238.20 	the applicable association for that period of sabbatical leave
238.21 	in the manner described in section 354A.12, subdivision 2a.  The
238.22 	employee and employer contributions shall be in an amount equal
238.23 	to the employee and employer contribution rates in effect for
238.24 	other active members of the association covered by the same
238.25 	program applied to a salary figure equal to the teacher's actual
238.26 	covered salary for the plan year immediately preceding the
238.27 	sabbatical leave period.  Payment of the employee contribution
238.28 	authorized pursuant to this section shall be made by the teacher
238.29 	on or before June 30 of year next following the year in which
238.30 	the sabbatical leave terminated and shall be made without
238.31 	interest.  For sabbatical leaves taken after June 30, 1986, the
238.32 	required employer contributions shall be paid by the employing
238.33 	unit within 30 days after notification by the association of the
238.34 	amount due.  If the employee contributions for the sabbatical
238.35 	leave period are less than an amount equal to the applicable
238.36 	contribution rate applied to a salary figure equal to the
239.1 	teacher's actual covered salary for the plan year immediately
239.2 	preceding the sabbatical leave period, service credit shall be
239.3 	prorated.  The prorated service credit shall be determined by
239.4 	the ratio between the amount of the actual payment which was
239.5 	made and the full contribution amount payable pursuant to this
239.6 	section.

239.7 	Sec. 14. Minnesota Statutes 2004, section 354A.093,
239.8 	subdivision 1, is amended to read:
239.9 		Subdivision 1.Eligibility.  Any teacher in the
239.10 	coordinated program of either the Minneapolis Teachers
239.11 	Retirement Fund Association or the St. Paul Teachers Retirement
239.12 	Fund Association or any teacher in the new law coordinated
239.13 	program of the Duluth Teachers Retirement Fund Association who
239.14 	is absent from employment by reason of service in the uniformed
239.15 	services as defined in United States Code, title 38, section
239.16 	4303(13) and who returns to the employer providing active
239.17 	teaching service upon discharge from uniformed service within
239.18 	the time frames required under United States Code, title 38,
239.19 	section 4312(e), may receive allowable service credit in the
239.20 	applicable association for all or a portion of the period of
239.21 	uniformed service, provided that the teacher did not separate
239.22 	from uniformed service with a dishonorable or bad conduct
239.23 	discharge or under other than honorable conditions.

239.24 	Sec. 15. Minnesota Statutes 2004, section 354A.095, is
239.25 	amended to read:
239.26 	354A.095 PARENTAL AND MATERNITY LEAVE.
239.27 	Basic or coordinated members of the St. Paul Teachers
239.28 	Retirement Fund Association, the Minneapolis Teachers Retirement
239.29 	Fund Association,and new coordinated members of the Duluth
239.30 	Teachers Retirement Fund Association, who are granted parental
239.31 	or maternity leave of absence by the employing authority, are
239.32 	entitled to obtain service credit not to exceed one year for the
239.33 	period of leave upon payment to the applicable fund by the end
239.34 	of the fiscal year following the fiscal year in which the leave
239.35 	of absence terminated.  The amount of the payment must include
239.36 	the total required employee and employer contributions for the
240.1 	period of leave prescribed in section 354A.12.  Payment must be
240.2 	based on the member's average monthly salary rate upon return to
240.3 	teaching service, and is payable without interest.  Payment must
240.4 	be accompanied by a certified or otherwise adequate copy of the
240.5 	resolution or action of the employing authority granting or
240.6 	approving the leave.

240.7 	Sec. 16. Minnesota Statutes 2004, section 354A.096, is
240.8 	amended to read:
240.9 	354A.096 MEDICAL LEAVE.
240.10 	Any teacher in the coordinated program of either the
240.11 	Minneapolis Teachers Retirement Fund Association or the St. Paul
240.12 	Teachers Retirement Fund Association or the new law coordinated
240.13 	program of the Duluth Teachers Retirement Fund Association who
240.14 	is on an authorized medical leave of absence and subsequently
240.15 	returns to teaching service is entitled to receive allowable
240.16 	service credit, not to exceed one year, for the period of leave,
240.17 	upon making the prescribed payment to the fund.  This payment
240.18 	must include the required employee and employer contributions at
240.19 	the rates specified in section 354A.12, subdivisions 1 and 2, as
240.20 	applied to the member's average full-time monthly salary rate on
240.21 	the date the leave of absence commenced plus annual interest at
240.22 	the rate of 8.5 percent per year from the end of the fiscal year
240.23 	during which the leave terminates to the end of the month during
240.24 	which payment is made.  The member must pay the total amount
240.25 	required unless the employing unit, at its option, pays the
240.26 	employer contributions.  The total amount required must be paid
240.27 	by the end of the fiscal year following the fiscal year in which
240.28 	the leave of absence terminated or before the member retires,
240.29 	whichever is earlier.  Payment must be accompanied by a copy of
240.30 	the resolution or action of the employing authority granting the
240.31 	leave and the employing authority, upon granting the leave, must
240.32 	certify the leave to the association in a manner specified by
240.33 	the executive director.  A member may not receive more than one
240.34 	year of allowable service credit during any fiscal year by
240.35 	making payment under this section.  A member may not receive
240.36 	disability benefits under section 354A.36 and receive allowable
241.1 	service credit under this section for the same period of time.

241.2 	Sec. 17. Minnesota Statutes 2004, section 354A.12,
241.3 	subdivision 1, is amended to read:
241.4 		Subdivision 1.Employee contributions.  The contribution
241.5 	required to be paid by each member of a teachers retirement fund
241.6 	association shall not be less than the percentage of total
241.7 	salary specified below for the applicable association and
241.8 	program:
241.9 	Association and Program              Percentage of
241.10 	Total Salary
241.11 	Duluth Teachers Retirement
241.12 	Association
241.13 	old law and new law
241.14 	coordinated programs              5.5 percent
241.15 	Minneapolis Teachers Retirement 
241.16 	Association 
241.17 	basic program 8.5 percent 
241.18 	coordinated program 5.5 percent 
241.19 	St. Paul Teachers Retirement
241.20 	Association
241.21 	basic program                     8 percent
241.22 	coordinated program               5.5 percent
241.23 	Contributions shall be made by deduction from salary and
241.24 	must be remitted directly to the respective teachers retirement
241.25 	fund association at least once each month.

241.26 	Sec. 18. Minnesota Statutes 2004, section 354A.12,
241.27 	subdivision 2, is amended to read:
241.28 		Subd. 2.Retirement contribution levy disallowed.  Except
241.29 	as provided in subdivision 3b and in section 423A.02,
241.30 	subdivision 3, with respect to the city of Minneapolis and
241.31 	special school district No. 1 and in section 423A.02,
241.32 	subdivision 3, with respect to independent school district No.
241.33 	625, notwithstanding any law to the contrary, levies for
241.34 	teachers retirement fund associations in the cities of the first
241.35 	class Duluth and St. Paul, including levies for any employer
241.36 	Social Security taxes for teachers covered by the Duluth
242.1 	Teachers Retirement Fund Association or the Minneapolis Teachers
242.2 	Retirement Fund Association or the St. Paul Teachers Retirement
242.3 	Fund Association, are disallowed.

242.4 	Sec. 19. Minnesota Statutes 2004, section 354A.12,
242.5 	subdivision 2a, is amended to read:
242.6 		Subd. 2a.Employer regular and additional contribution
242.7 	rates.  (a) The employing units shall make the following
242.8 	employer contributions to teachers retirement fund associations:
242.9 	(1) for any coordinated member of a teachers retirement
242.10 	fund association in a city of the first class, the employing
242.11 	unit shall pay the employer Social Security taxes in accordance
242.12 	with section 355.46, subdivision 3, clause (b);
242.13 	(2) for any coordinated member of one of the following
242.14 	teachers retirement fund associations in a city of the first
242.15 	class, the employing unit shall make a regular employer
242.16 	contribution to the respective retirement fund association in an
242.17 	amount equal to the designated percentage of the salary of the
242.18 	coordinated member as provided below:
242.19 	Duluth Teachers Retirement
242.20 	     Fund Association                        4.50 percent
242.21 	Minneapolis Teachers Retirement
242.22 	     Fund Association 4.50 percent 
242.23 	     St. Paul Teachers Retirement
242.24 	     Fund Association                        4.50 percent;
242.25 	(3) for any basic member of one of the following St. Paul 
242.26 	Teachers Retirement Fund associations in a city of the first
242.27 	class Association, the employing unit shall make a regular
242.28 	employer contribution to the respective retirement fund in an
242.29 	amount equal to the designated percentage 8.00 percent of the
242.30 	salary of the basic member as provided below:
242.31 	Minneapolis Teachers Retirement 
242.32 	Fund Association 8.50 percent 
242.33 	St. Paul Teachers Retirement 
242.34 	Fund Association 8.00 percent ;
242.35 	(4) for a basic member of a the St. Paul Teachers
242.36 	Retirement Fund Association in a city of the first class, the
243.1 	employing unit shall make an additional employer contribution to
243.2 	the respective fund in an amount equal to the designated
243.3 	percentage 3.64 percent of the salary of the basic member, as
243.4 	provided below:
243.5 	Minneapolis Teachers Retirement 
243.6 	Fund Association 
243.7 	July 1, 1993 - June 30, 1994 4.85 percent 
243.8 	July 1, 1994, and thereafter 3.64 percent 
243.9 	St. Paul Teachers Retirement 
243.10 	Fund Association 
243.11 	July 1, 1993 - June 30, 1995 4.63 percent 
243.12 	July 1, 1995, and thereafter 3.64 percent ;
243.13 	(5) for a coordinated member of a teachers retirement fund
243.14 	association in a city of the first class, the employing unit
243.15 	shall make an additional employer contribution to the respective
243.16 	fund in an amount equal to the applicable percentage of the
243.17 	coordinated member's salary, as provided below:
243.18 	Duluth Teachers Retirement
243.19 	Fund Association                        1.29 percent
243.20 	Minneapolis Teachers Retirement 
243.21 	Fund Association 
243.22 	July 1, 1993 - June 30, 1994 0.50 percent 
243.23 	July 1, 1994, and thereafter 3.64 percent 
243.24 	St. Paul Teachers Retirement
243.25 	Fund Association
243.26 	July 1, 1993 - June 30, 1994          0.50 percent
243.27 	July 1, 1994 - June 30, 1995          1.50 percent
243.28 	July 1, 1997, and thereafter          3.84 percent.
243.29 	(b) The regular and additional employer contributions must
243.30 	be remitted directly to the respective teachers retirement fund
243.31 	association at least once each month.  Delinquent amounts are
243.32 	payable with interest under the procedure in subdivision 1a.
243.33 	(c) Payments of regular and additional employer
243.34 	contributions for school district or technical college employees
243.35 	who are paid from normal operating funds must be made from the
243.36 	appropriate fund of the district or technical college.

244.1 	Sec. 20. Minnesota Statutes 2004, section 354A.12,
244.2 	subdivision 3a, is amended to read:
244.3 		Subd. 3a.Special direct state aid to first class city
244.4 	teachers retirement fund associations.  (a) In fiscal year 1998,
244.5 	the state shall pay $4,827,000 to the St. Paul Teachers
244.6 	Retirement Fund Association, $17,954,000 to the Minneapolis
244.7 	Teachers Retirement Fund Association, and $486,000 to the Duluth
244.8 	Teachers Retirement Fund Association.  In each subsequent fiscal
244.9 	year after fiscal year 2005, these payments to the first class
244.10 	city teachers retirement fund associations must be $2,827,000
244.11 	for St. Paul, $12,954,000 to the Teachers Retirement Association 
244.12 	for the former Minneapolis Teachers Retirement Fund Association,
244.13 	and $486,000 for Duluth.
244.14 	(b) The direct state aids under this subdivision are
244.15 	payable October 1 annually.  The commissioner of finance shall
244.16 	pay the direct state aid.  The amount required under this
244.17 	subdivision is appropriated annually from the general fund to
244.18 	the commissioner of finance.

244.19 	Sec. 21. Minnesota Statutes 2004, section 354A.12,
244.20 	subdivision 3b, is amended to read:
244.21 		Subd. 3b.Special direct state matching aid to the
244.22 	minneapolis teachers retirement fund association.  (a) Special
244.23 	School District No. 1 may must make an additional employer
244.24 	contribution to the Minneapolis Teachers Retirement Fund 
244.25 	Association.  The city of Minneapolis may must make a
244.26 	contribution to the Minneapolis Teachers Retirement Fund 
244.27 	Association.  This contribution may must be made by a levy of
244.28 	the board of estimate and taxation of the city of Minneapolis
244.29 	and the levy, if made, is classified as that of a special taxing
244.30 	district for purposes of sections 275.065 and 276.04, and for
244.31 	all other property tax purposes.
244.32 	(b) For every $1,000 $1,125,000 must be contributed in
244.33 	equal proportion by Special School District No. 1 and $1,125,000
244.34 	must be contributed by the city of Minneapolis to
244.35 	the Minneapolis Teachers Retirement Fund Association under
244.36 	paragraph (a),and the state shall pay to the Minneapolis 
245.1 	Teachers Retirement Fund Association $1,000, but not to
245.2 	exceed $2,500,000 in total in each fiscal year 1994.  The
245.3 	superintendent of Special School District No. 1, the mayor of
245.4 	the city of Minneapolis, and the executive director of
245.5 	the Minneapolis Teachers Retirement Fund Association shall
245.6 	jointly certify to the commissioner of finance the total amount
245.7 	that has been contributed by Special School District No. 1 and
245.8 	by the city of Minneapolis to the Minneapolis Teachers
245.9 	Retirement Fund Association.  Any certification to the
245.10 	commissioner of education must be made quarterly.  If the total
245.11 	certifications for a fiscal year exceed the maximum annual
245.12 	direct state matching aid amount in any quarter, the amount of
245.13 	direct state matching aid payable to the Minneapolis Teachers
245.14 	Retirement Fund Association must be limited to the balance of
245.15 	the maximum annual direct state matching aid amount available.
245.16 	The amount required under this paragraph, subject to the maximum
245.17 	direct state matching aid amount, is appropriated annually to
245.18 	the commissioner of finance.
245.19 	(c) The commissioner of finance may prescribe the form of
245.20 	the certifications required under paragraph (b).

245.21 	Sec. 22. Minnesota Statutes 2004, section 354A.12,
245.22 	subdivision 3c, is amended to read:
245.23 		Subd. 3c.Termination of supplemental contributions and
245.24 	direct matching and state aid.  (a) The supplemental
245.25 	contributions payable to the Minneapolis Teachers Retirement
245.26 	Fund Association by special school district No. 1 and the city
245.27 	of Minneapolis under section 423A.02, subdivision 3, or to the 
245.28 	St. Paul Teachers Retirement Fund Association by Independent
245.29 	School District No. 625 under section 423A.02, subdivision 3, or
245.30 	the direct state aids under subdivision 3a to the first class
245.31 	city St. Paul Teachers Retirement associations, and the direct
245.32 	matching and state aid under subdivision 3b to the Minneapolis
245.33 	Teachers Retirement Fund Association terminate for the
245.34 	respective fund at the end of the fiscal year in which the
245.35 	accrued liability funding ratio for that fund, as determined in
245.36 	the most recent actuarial report for that fund by the actuary
246.1 	retained by the Legislative Commission on Pensions and
246.2 	Retirement, equals or exceeds the accrued liability funding
246.3 	ratio for the teachers retirement association, as determined in
246.4 	the most recent actuarial report for the Teachers Retirement
246.5 	Association by the actuary retained by the Legislative
246.6 	Commission on Pensions and Retirement.
246.7 	(b) If the state direct matching, state supplemental, or
246.8 	state aid is terminated for a first class city teachers
246.9 	retirement fund association under paragraph (a), it may not
246.10 	again be received by that fund.
246.11 	(c) If either the Minneapolis Teachers Retirement Fund
246.12 	Association,the St. Paul Teachers Retirement Fund Association,
246.13 	or the Duluth Teachers Retirement Fund Association remain is 
246.14 	funded at less than the funding ratio applicable to the teachers
246.15 	retirement association when the provisions of paragraph (b)
246.16 	become effective, then any state aid not previously distributed
246.17 	to that association must be immediately transferred to the other
246.18 	associations in proportion to the relative sizes of their
246.19 	unfunded actuarial accrued liabilities Teachers Retirement
246.20 	Association.

246.21 	Sec. 23. Minnesota Statutes 2004, section 354A.12,
246.22 	subdivision 3d, is amended to read:
246.23 		Subd. 3d.Supplemental administrative expense
246.24 	assessment.  (a) The active and retired membership of the
246.25 	Minneapolis Teachers Retirement Fund Association and of the St.
246.26 	Paul Teachers Retirement Fund Association is responsible for
246.27 	defraying supplemental administrative expenses other than
246.28 	investment expenses of the respective teacher retirement fund
246.29 	association.
246.30 	(b) Investment expenses of the teachers retirement fund
246.31 	association are those expenses incurred by or on behalf of the
246.32 	retirement fund in connection with the investment of the assets
246.33 	of the retirement fund other than investment security
246.34 	transaction costs.  Other administrative expenses are all
246.35 	expenses incurred by or on behalf of the retirement fund for all
246.36 	other retirement fund functions other than the investment of
247.1 	retirement fund assets.  Investment and other administrative
247.2 	expenses must be accounted for using generally accepted
247.3 	accounting principles and in a manner consistent with the
247.4 	comprehensive annual financial report of the teachers retirement
247.5 	fund association for the immediately previous fiscal year under
247.6 	section 356.20.
247.7 	(c) Supplemental administrative expenses other than
247.8 	investment expenses of a first class city teacher the St. Paul
247.9 	Teachers Retirement Fund Association are those expenses for the
247.10 	fiscal year that:
247.11 	(1) exceed, for the St. Paul Teachers Retirement Fund
247.12 	Association,$443,745, or for the Minneapolis Teacher Retirement
247.13 	Fund Association $671,513,plus, in each case,an additional
247.14 	amount derived by applying the percentage increase in the
247.15 	Consumer Price Index for Urban Wage Earners and Clerical Workers
247.16 	All Items Index published by the Bureau of Labor Statistics of
247.17 	the United States Department of Labor since July 1, 2001, to the
247.18 	applicable dollar amount; and
247.19 	(2) exceed the amount computed by applying the most recent
247.20 	percentage of pay administrative expense amount, other than
247.21 	investment expenses, for the teachers retirement association
247.22 	governed by chapter 354 to the covered payroll of the respective
247.23 	teachers retirement fund association for the fiscal year.
247.24 	(d) The board of trustees of each first class city the St.
247.25 	Paul Teachers Retirement Fund Association shall allocate the
247.26 	total dollar amount of supplemental administrative expenses
247.27 	other than investment expenses determined under paragraph (c),
247.28 	clause (2), among the various active and retired membership
247.29 	groups of the teachers retirement fund association and shall
247.30 	assess the various membership groups their respective share of
247.31 	the supplemental administrative expenses other than investment
247.32 	expenses, in amounts determined by the board of trustees.  The
247.33 	supplemental administrative expense assessments must be paid by
247.34 	the membership group in a manner determined by the board of
247.35 	trustees of the respective teachers retirement association.
247.36 	Supplemental administrative expenses payable by the active
248.1 	members of the pension plan must be picked up by the employer in
248.2 	accordance with section 356.62.
248.3 	(e) With respect to the St. Paul Teachers Retirement Fund
248.4 	Association, the supplemental administrative expense assessment
248.5 	must be fully disclosed to the various active and retired
248.6 	membership groups of the teachers retirement fund association.
248.7 	The chief administrative officer of the St. Paul Teachers
248.8 	Retirement Fund Association shall prepare a supplemental
248.9 	administrative expense assessment disclosure notice, which must
248.10 	include the following:
248.11 	(1) the total amount of administrative expenses of the St.
248.12 	Paul Teachers Retirement Fund Association, the amount of the
248.13 	investment expenses of the St. Paul Teachers Retirement Fund
248.14 	Association, and the net remaining amount of administrative
248.15 	expenses of the St. Paul Teachers Retirement Fund Association;
248.16 	(2) the amount of administrative expenses for the St. Paul
248.17 	Teachers Retirement Fund Association that would be equivalent to
248.18 	the teachers retirement association noninvestment administrative
248.19 	expense level described in paragraph (c);
248.20 	(3) the total amount of supplemental administrative
248.21 	expenses required for assessment calculated under paragraph (c);
248.22 	(4) the portion of the total amount of the supplemental
248.23 	administrative expense assessment allocated to each membership
248.24 	group and the rationale for that allocation;
248.25 	(5) the manner of collecting the supplemental
248.26 	administrative expense assessment from each membership group,
248.27 	the number of assessment payments required during the year, and
248.28 	the amount of each payment or the procedure used to determine
248.29 	each payment; and
248.30 	(6) any other information that the chief administrative
248.31 	officer determines is necessary to fairly portray the manner in
248.32 	which the supplemental administrative expense assessment was
248.33 	determined and allocated.
248.34 	(f) The disclosure notice must be provided annually in the
248.35 	annual report of the association.
248.36 	(g) The supplemental administrative expense assessments
249.1 	must be deposited in the applicable teachers retirement fund
249.2 	upon receipt.
249.3 	(h) Any omitted active membership group assessments that
249.4 	remain undeducted and unpaid to the teachers retirement fund
249.5 	association for 90 days must be paid by the respective school
249.6 	district.  The school district may recover any omitted active
249.7 	membership group assessment amounts that it has previously
249.8 	paid.  The teachers retirement fund association shall deduct any
249.9 	omitted retired membership group assessment amounts from the
249.10 	benefits next payable after the discovery of the omitted amounts.

249.11 	Sec. 24. Minnesota Statutes 2004, section 354A.30, is
249.12 	amended to read:
249.13 	354A.30  MINNEAPOLIS AND ST. PAUL TEACHERS RETIREMENT
249.14 	FUND ASSOCIATIONS ASSOCIATION; COORDINATED PROGRAM.
249.15 	There is established a coordinated program within the
249.16 	Minneapolis Teachers Retirement Fund Association and a
249.17 	coordinated program within the St. Paul Teachers Retirement Fund
249.18 	Association to provide retirement coverage for teachers who are
249.19 	covered by an agreement or modification made between the state
249.20 	and the secretary of health, education and welfare making the
249.21 	provisions of the federal Old Age, Survivors and Disability
249.22 	Insurance Act applicable to certain teachers covered by the
249.23 	teachers retirement fund association.  The provisions governing
249.24 	the coordinated program shall be sections 354A.31 to 354A.41 and
249.25 	any other applicable provisions of this chapter.

249.26 	Sec. 25. Minnesota Statutes 2004, section 354A.31,
249.27 	subdivision 4, is amended to read:
249.28 		Subd. 4.Computation of the normal coordinated retirement
249.29 	annuity; minneapolis and st. paul funds.  (a) This subdivision
249.30 	applies to the coordinated programs program of the Minneapolis
249.31 	Teachers Retirement Fund Association and the St. Paul Teachers
249.32 	Retirement Fund Association.
249.33 	(b) The normal coordinated retirement annuity shall be an
249.34 	amount equal to a retiring coordinated member's average salary
249.35 	multiplied by the retirement annuity formula percentage.
249.36 	Average salary for purposes of this section shall mean an amount
250.1 	equal to the average salary upon which contributions were made
250.2 	for the highest five successive years of service credit, but
250.3 	which shall not in any event include any more than the
250.4 	equivalent of 60 monthly salary payments.  Average salary must
250.5 	be based upon all years of service credit if this service credit
250.6 	is less than five years.
250.7 	(c) This paragraph, in conjunction with subdivision 6,
250.8 	applies to a person who first became a member or a member in a
250.9 	pension fund listed in section 356.30, subdivision 3, before
250.10 	July 1, 1989, unless paragraph (d), in conjunction with
250.11 	subdivision 7, produces a higher annuity amount, in which case
250.12 	paragraph (d) will apply.  The retirement annuity formula
250.13 	percentage for purposes of this paragraph is the percent
250.14 	specified in section 356.315, subdivision 1, per year for each
250.15 	year of coordinated service for the first ten years and the
250.16 	percent specified in section 356.315, subdivision 2, for each
250.17 	year of coordinated service thereafter.
250.18 	(d) This paragraph applies to a person who has become at
250.19 	least 55 years old and who first becomes a member after June 30,
250.20 	1989, and to any other member who has become at least 55 years
250.21 	old and whose annuity amount, when calculated under this
250.22 	paragraph and in conjunction with subdivision 7 is higher than
250.23 	it is when calculated under paragraph (c), in conjunction with
250.24 	the provisions of subdivision 6.  The retirement annuity formula
250.25 	percentage for purposes of this paragraph is the percent
250.26 	specified in section 356.315, subdivision 2, for each year of
250.27 	coordinated service.

250.28 	Sec. 26. Minnesota Statutes 2004, section 354A.32,
250.29 	subdivision 1, is amended to read:
250.30 		Subdivision 1.Optional forms generally.  The boards 
250.31 	board of the Minneapolis and the St. Paul Teachers Retirement
250.32 	Fund Associations Association shall each establish for the
250.33 	coordinated program and the board of the Duluth Teachers
250.34 	Retirement Fund Association shall establish for the new law
250.35 	coordinated program an optional retirement annuity which shall
250.36 	take the form of a joint and survivor annuity.  Each board may
251.1 	also in its discretion establish an optional annuity which shall
251.2 	take the form of an annuity payable for a period certain and for
251.3 	life thereafter.  Each board shall also establish an optional
251.4 	retirement annuity that guarantees payment of the balance of the
251.5 	annuity recipient's accumulated deductions to a designated
251.6 	beneficiary upon the death of the annuity recipient.  Except as
251.7 	provided in subdivision 1a, optional annuity forms shall be the
251.8 	actuarial equivalent of the normal forms provided in section
251.9 	354A.31.  In establishing these optional annuity forms, the
251.10 	board shall obtain the written recommendation of the
251.11 	commission-retained actuary.  The recommendation shall be a part
251.12 	of the permanent records of the board.

251.13 	Sec. 27. Minnesota Statutes 2004, section 354A.39, is
251.14 	amended to read:
251.15 	354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS;
251.16 	ANNUITY.
251.17 	Any person who has been a member of the Minnesota State
251.18 	Retirement System, the Public Employees Retirement Association
251.19 	including the Public Employees Retirement Association Police and
251.20 	Fire Fund, the Teachers Retirement Association, the Minnesota
251.21 	State Patrol Retirement Association, the legislators retirement
251.22 	plan, the constitutional officers retirement plan, the
251.23 	Minneapolis Employees Retirement Fund, the Duluth Teachers
251.24 	Retirement Fund Association new law coordinated program, the
251.25 	Minneapolis Teachers Retirement Fund Association coordinated
251.26 	program,the St. Paul Teachers Retirement Fund Association
251.27 	coordinated program, or any other public employee retirement
251.28 	system in the state of Minnesota having a like provision but
251.29 	excluding all other funds providing retirement benefits for
251.30 	police officers or firefighters shall be entitled when qualified
251.31 	to an annuity from each fund if the person's total allowable
251.32 	service in all of the funds or in any two or more of the funds
251.33 	totals three or more years, provided that no portion of the
251.34 	allowable service upon which the retirement annuity from one
251.35 	fund is based is used again in the computation for a retirement
251.36 	annuity from another fund and provided further that the person
252.1 	has not taken a refund from any of funds or associations since
252.2 	the person's membership in the fund or association has
252.3 	terminated.  The annuity from each fund or association shall be
252.4 	determined by the appropriate provisions of the law governing
252.5 	each fund or association, except that the requirement that a
252.6 	person must have at least three years of allowable service in
252.7 	the respective fund or association shall not apply for the
252.8 	purposes of this section, provided that the aggregate service in
252.9 	two or more of these funds equals three or more years.

252.10 	Sec. 28. Minnesota Statutes 2004, section 354A.40,
252.11 	subdivision 1, is amended to read:
252.12 		Subdivision 1.Retirement annuity.  Any coordinated
252.13 	member of either the Minneapolis Teachers Retirement Fund
252.14 	Association or of the St. Paul Teachers Retirement Fund
252.15 	Association who has credited service prior to July 1, 1978 shall
252.16 	be entitled to receive a retirement annuity when otherwise
252.17 	qualified, the calculation of which shall utilize the applicable
252.18 	retirement annuity formula specified in articles of
252.19 	incorporation and bylaws of the teachers retirement fund
252.20 	association governing the basic program for that portion of
252.21 	credited service which was served prior to July 1, 1978, and the
252.22 	retirement annuity formula specified in section 354A.31 for the
252.23 	remainder of the member's credited service, both applied to the
252.24 	member's average salary as specified in section 354A.31,
252.25 	subdivision 4.  The formula percentages to be used in
252.26 	calculating the coordinated portion of the retirement annuity or
252.27 	coordinated service under this section shall recognize the
252.28 	coordinated service as a continuation of any service prior to
252.29 	July 1, 1978.

252.30 	Sec. 29. Minnesota Statutes 2004, section 354A.41, is
252.31 	amended to read:
252.32 	354A.41 ADMINISTRATION OF COORDINATED PROGRAM.
252.33 		Subdivision 1.Administrative provisions. The provisions
252.34 	of the articles of incorporation and bylaws of the Minneapolis
252.35 	or the St. Paul Teachers Retirement Fund Association, whichever
252.36 	is applicable,relating to the administration of the fund shall
253.1 	govern the administration of the coordinated program and the
253.2 	provisions of the articles of incorporation and bylaws of the
253.3 	Duluth Teachers Retirement Fund Association relating to the
253.4 	administration of the fund shall govern the administration of
253.5 	the new law coordinated program in instances where the
253.6 	administrative provisions are not inconsistent with the
253.7 	provisions of sections 354A.31 to 354A.41, including but not
253.8 	limited to provisions relating to the composition and function
253.9 	of the board of trustees, the investment of assets of the
253.10 	teachers retirement fund association, and the definition of the
253.11 	plan year.
253.12 		Subd. 2.Actuarial valuations. In any actuarial
253.13 	valuation of the Minneapolis Teachers Retirement Fund
253.14 	Association, the St. Paul Teachers Retirement Fund Association,
253.15 	or the Duluth Teachers Retirement Fund Association under section
253.16 	356.215 prepared by the commission-retained actuary or
253.17 	supplemental actuarial valuation prepared by an approved actuary
253.18 	retained by the teachers retirement fund association, there
253.19 	shall be included a finding of the condition of the fund showing
253.20 	separately the basic and coordinated programs or the old law
253.21 	coordinated and new law coordinated programs, as appropriate.
253.22 	The finding shall include the level normal cost and the
253.23 	applicable employee and employer contribution rates for each
253.24 	program.

253.25 	Sec. 30. Minnesota Statutes 2004, section 356.20,
253.26 	subdivision 2, is amended to read:
253.27 		Subd. 2.Covered public pension plans and funds.  This
253.28 	section applies to the following public pension plans:
253.29 	(1) the general state employees retirement plan of the
253.30 	Minnesota State Retirement System;
253.31 	(2) the general employees retirement plan of the Public
253.32 	Employees Retirement Association;
253.33 	(3) the Teachers Retirement Association;
253.34 	(4) the State Patrol retirement plan;
253.35 	(5) the Minneapolis Teachers Retirement Fund Association;
253.36 	(6) the St. Paul Teachers Retirement Fund Association;
254.1 	(7) (6) the Duluth Teachers Retirement Fund Association;
254.2 	(8) (7) the Minneapolis Employees Retirement Fund;
254.3 	(9) (8) the University of Minnesota faculty retirement
254.4 	plan;
254.5 	(10) (9) the University of Minnesota faculty supplemental
254.6 	retirement plan;
254.7 	(11) (10) the judges retirement fund;
254.8 	(12) (11) a police or firefighter's relief association
254.9 	specified or described in section 69.77, subdivision 1a, or
254.10 	69.771, subdivision 1;
254.11 	(13) (12) the public employees police and fire plan of the
254.12 	Public Employees Retirement Association;
254.13 	(14) (13) the correctional state employees retirement plan
254.14 	of the Minnesota State Retirement System; and
254.15 	(15) (14) the local government correctional service
254.16 	retirement plan of the Public Employees Retirement Association.

254.17 	Sec. 31. Minnesota Statutes 2004, section 356.214,
254.18 	subdivision 1, is amended to read:
254.19 		Subdivision 1.Joint retention.  (a) The chief
254.20 	administrative officers of the Minnesota State Retirement
254.21 	System, the Public Employees Retirement Association, the
254.22 	Teachers Retirement Association, the Duluth Teachers Retirement
254.23 	Fund Association, the Minneapolis Teachers Retirement Fund
254.24 	Association,the Minneapolis Employees Retirement Fund, and the
254.25 	St. Paul Teachers Retirement Fund Association, jointly, on
254.26 	behalf of the state, its employees, its taxpayers, and its
254.27 	various public pension plans, shall contract with an established
254.28 	actuarial consulting firm to conduct annual actuarial valuations
254.29 	and related services for the retirement plans named in paragraph
254.30 	(b).  The principal from the actuarial consulting firm on the
254.31 	contract must be an approved actuary under section 356.215,
254.32 	subdivision 1, paragraph (c).  Prior to becoming effective, the
254.33 	contract under this section is subject to a review and approval
254.34 	by the Legislative Commission on Pensions and Retirement.
254.35 	(b) The contract for actuarial services must include the
254.36 	preparation of actuarial valuations and related actuarial work
255.1 	for the following retirement plans:
255.2 	(1) the teachers retirement plan, Teachers Retirement
255.3 	Association;
255.4 	(2) the general state employees retirement plan, Minnesota
255.5 	State Retirement System;
255.6 	(3) the correctional employees retirement plan, Minnesota
255.7 	State Retirement System;
255.8 	(4) the State Patrol retirement plan, Minnesota State
255.9 	Retirement System;
255.10 	(5) the judges retirement plan, Minnesota State Retirement
255.11 	System;
255.12 	(6) the Minneapolis employees retirement plan, Minneapolis
255.13 	Employees Retirement Fund;
255.14 	(7) the public employees retirement plan, Public Employees
255.15 	Retirement Association;
255.16 	(8) the public employees police and fire plan, Public
255.17 	Employees Retirement Association;
255.18 	(9) the Duluth teachers retirement plan, Duluth Teachers
255.19 	Retirement Fund Association;
255.20 	(10) the Minneapolis teachers retirement plan, Minneapolis
255.21 	Teachers Retirement Fund Association;
255.22 	(11) the St. Paul teachers retirement plan, St. Paul
255.23 	Teachers Retirement Fund Association;
255.24 	(12) (11) the legislators retirement plan, Minnesota State
255.25 	Retirement System;
255.26 	(13) (12) the elective state officers retirement plan,
255.27 	Minnesota State Retirement System; and
255.28 	(14) (13) local government correctional service retirement
255.29 	plan, Public Employees Retirement Association.
255.30 	(c) The contract must require completion of the annual
255.31 	actuarial valuation calculations on a fiscal year basis, with
255.32 	the contents of the actuarial valuation calculations as
255.33 	specified in section 356.215, and in conformity with the
255.34 	standards for actuarial work adopted by the Legislative
255.35 	Commission on Pensions and Retirement.
255.36 	The contract must require completion of annual experience
256.1 	data collection and processing and a quadrennial published
256.2 	experience study for the plans listed in paragraph (b), clauses
256.3 	(1), (2), and (7), as provided for in the standards for
256.4 	actuarial work adopted by the commission.  The experience data
256.5 	collection, processing, and analysis must evaluate the following:
256.6 	(1) individual salary progression;
256.7 	(2) the rate of return on investments based on the current
256.8 	asset value;
256.9 	(3) payroll growth;
256.10 	(4) mortality;
256.11 	(5) retirement age;
256.12 	(6) withdrawal; and
256.13 	(7) disablement.
256.14 	The contract must include provisions for the preparation of
256.15 	cost analyses by the jointly retained actuary for proposed
256.16 	legislation that include changes in benefit provisions or
256.17 	funding policies prior to their consideration by the Legislative
256.18 	Commission on Pensions and Retirement.
256.19 	(d) The actuary retained by the joint retirement systems
256.20 	shall annually prepare a report to the legislature, including a
256.21 	commentary on the actuarial valuation calculations for the plans
256.22 	named in paragraph (b) and summarizing the results of the
256.23 	actuarial valuation calculations.  The actuary shall include
256.24 	with the report the actuary's recommendations to the legislature
256.25 	concerning the appropriateness of the support rates to achieve
256.26 	proper funding of the retirement plans by the required funding
256.27 	dates.  The actuary shall, as part of the quadrennial experience
256.28 	study, include recommendations to the legislature on the
256.29 	appropriateness of the actuarial valuation assumptions required
256.30 	for evaluation in the study.
256.31 	(e) If the actuarial gain and loss analysis in the
256.32 	actuarial valuation calculations indicates a persistent pattern
256.33 	of sizable gains or losses, as directed by the joint retirement
256.34 	systems or as requested by the chair of the Legislative
256.35 	Commission on Pensions and Retirement, the actuary shall prepare
256.36 	a special experience study for a plan listed in paragraph (b),
257.1 	clause (3), (4), (5), (6), (8), (9), (10), (11), (12), (13),or
257.2 	(14) (13), in the manner provided for in the standards for
257.3 	actuarial work adopted by the commission.
257.4 	(f) The term of the contract between the joint retirement
257.5 	systems and the actuary retained may not exceed five years.  The
257.6 	joint retirement system administrative officers shall establish
257.7 	procedures for the consideration and selection of contract
257.8 	bidders and the requirements for the contents of an actuarial
257.9 	services contract under this section.  The procedures and
257.10 	requirements must be submitted to the Legislative Commission on
257.11 	Pensions and Retirement for review and comment prior to final
257.12 	approval by the joint administrators.  The contract is subject
257.13 	to the procurement procedures under chapter 16C.  The
257.14 	consideration of bids and the selection of a consulting
257.15 	actuarial firm by the chief administrative officers must occur
257.16 	at a meeting that is open to the public and reasonable timely
257.17 	public notice of the date and the time of the meeting and its
257.18 	subject matter must be given.
257.19 	(g) The actuarial services contract may not limit the
257.20 	ability of the Minnesota legislature and its standing committees
257.21 	and commissions to rely on the actuarial results of the work
257.22 	prepared under the contract.
257.23 	(h) The joint retirement systems shall designate one of the
257.24 	retirement system executive directors as the actuarial services
257.25 	contract manager.

257.26 	Sec. 32. Minnesota Statutes 2004, section 356.215,
257.27 	subdivision 8, is amended to read:
257.28 		Subd. 8.Interest and salary assumptions.  (a) The
257.29 	actuarial valuation must use the applicable following
257.30 	preretirement interest assumption and the applicable following
257.31 	postretirement interest assumption:
257.32 	preretirement  postretirement
257.33 	                                   interest rate  interest rate
257.34 	            plan                      assumption     assumption
257.35 	     general state employees
257.36 	         retirement plan                  8.5%          6.0%
257.37 	     correctional state employees
257.38 	         retirement plan                  8.5           6.0
257.39 	     State Patrol retirement plan         8.5           6.0
257.40 	     legislators retirement plan          8.5           6.0
258.1 	     elective state officers
258.2 	         retirement plan                  8.5           6.0
258.3 	     judges retirement plan               8.5           6.0
258.4 	     general public employees
258.5 	         retirement plan                  8.5           6.0
258.6 	     public employees police and fire
258.7 	         retirement plan                  8.5           6.0
258.8 	     local government correctional
258.9 	         service retirement plan          8.5           6.0
258.10 	     teachers retirement plan             8.5           6.0
258.11 	     Minneapolis employees
258.12 	         retirement plan                  6.0           5.0
258.13 	     Duluth teachers retirement plan      8.5           8.5
258.14 	Minneapolis teachers retirement
258.15 	         plan 8.5 8.5 
258.16 	     St. Paul teachers retirement
258.17 	         plan                             8.5           8.5
258.18 	     Minneapolis Police Relief
258.19 	         Association                      6.0           6.0
258.20 	     Fairmont Police Relief
258.21 	         Association                      5.0           5.0
258.22 	     Minneapolis Fire Department
258.23 	         Relief Association               6.0           6.0
258.24 	     Virginia Fire Department
258.25 	         Relief Association               5.0           5.0
258.26 	     local monthly benefit volunteer
258.27 	         firefighters relief associations 5.0           5.0
258.28 	(b) The actuarial valuation must use the applicable
258.29 	following single rate future salary increase assumption, the
258.30 	applicable following modified single rate future salary increase
258.31 	assumption, or the applicable following graded rate future
258.32 	salary increase assumption:
258.33 	(1) single rate future salary increase assumption
258.34 	future salary
258.35 	            plan                          increase assumption
258.36 	     legislators retirement plan                  5.0%
258.37 	     elective state officers retirement
258.38 	         plan                                     5.0
258.39 	     judges retirement plan                       5.0
258.40 	     Minneapolis Police Relief Association        4.0
258.41 	     Fairmont Police Relief
258.42 	         Association                              3.5
258.43 	     Minneapolis Fire Department Relief
258.44 	         Association                              4.0
258.45 	     Virginia Fire Department
258.46 	         Relief Association                       3.5
258.47 	(2) modified single rate future salary increase assumption
258.48 	future salary
258.49 	               plan                       increase assumption
258.50 	         Minneapolis employees        the prior calendar year
258.51 	           retirement plan            amount increased first by
258.52 	1.0198 percent to prior
258.53 	                                      fiscal year date and
258.54 	                                      then increased by 4.0
258.55 	                                      percent annually for
258.56 	                                      each future year
258.57 	(3) select and ultimate future salary increase assumption
258.58 	or graded rate future salary increase assumption
258.59 	future salary
259.1 	               plan                       increase assumption
259.2 	     general state employees             select calculation and
259.3 	         retirement plan                      assumption A
259.4 	     correctional state employees
259.5 	         retirement plan                      assumption H G 
259.6 	     State Patrol retirement plan             assumption H G 
259.7 	     general public employees            select calculation and
259.8 	         retirement plan                      assumption B
259.9 	     public employees police and fire
259.10 	         fund retirement plan                 assumption C
259.11 	     local government correctional service
259.12 	         retirement plan                      assumption H G 
259.13 	     teachers retirement plan                 assumption D
259.14 	     Duluth teachers retirement plan          assumption E
259.15 	Minneapolis teachers retirement plan assumption F 
259.16 	     St. Paul teachers retirement plan        assumption G F 
259.17 	
259.18 	     The select calculation is:
259.19 	     during the ten-year select period, a designated percent
259.20 	     is multiplied by the result of ten minus T, where T is
259.21 	     the number of completed years of service, and is added
259.22 	     to the applicable future salary increase assumption.  The
259.23 	     designated percent is 0.2 percent for the correctional state
259.24 	     employees retirement plan, the State Patrol retirement
259.25 	     plan, the public employees police and fire plan, and the
259.26 	     local government correctional service plan; 0.3 percent
259.27 	     for the general state employees retirement plan, the
259.28 	     general public employees retirement plan, the teachers
259.29 	     retirement plan, the Duluth Teachers Retirement Fund
259.30 	     Association, and the St. Paul Teachers Retirement Fund
259.31 	     Association; and 0.4 percent for the Minneapolis Teachers
259.32 	     Retirement Fund Association.
259.33 	
259.34 	          The ultimate future salary increase assumption is:
259.35 	
259.36 	     age  A     B      C     D     E F G F H G 
259.37 	     16  6.95% 6.95% 11.50% 8.20% 8.00% 6.50% 6.90% 7.7500
259.38 	     17  6.906.9011.508.158.006.50 6.90  7.7500
259.39 	     18  6.856.8511.508.108.006.50 6.90  7.7500
259.40 	     19  6.806.8011.508.058.006.50 6.90  7.7500
259.41 	     20  6.756.4011.506.006.906.50 6.90  7.7500
259.42 	     21  6.756.4011.506.006.906.50 6.90  7.1454
259.43 	     22  6.756.4011.006.006.906.50 6.90  7.0725
259.44 	     23  6.756.4010.506.006.856.50 6.85  7.0544
259.45 	     24  6.756.4010.006.006.806.50 6.80  7.0363
259.46 	     25  6.756.409.506.006.756.50 6.75  7.0000
259.47 	     26  6.756.369.206.006.706.50 6.70  7.0000
259.48 	     27  6.756.328.906.006.656.50 6.65  7.0000
259.49 	     28  6.756.288.606.006.606.50 6.60  7.0000
259.50 	     29  6.756.248.306.006.556.50 6.55  7.0000
259.51 	     30  6.756.208.006.006.506.50 6.50  7.0000
259.52 	     31  6.756.167.806.006.456.50 6.45  7.0000
259.53 	     32  6.756.127.606.006.406.50 6.40  7.0000
259.54 	     33  6.756.087.406.006.356.50 6.35  7.0000
259.55 	     34  6.756.047.206.006.306.50 6.30  7.0000
259.56 	     35  6.756.007.006.006.256.50 6.25  7.0000
259.57 	     36  6.755.966.806.006.206.50 6.20  6.9019
259.58 	     37  6.755.926.606.006.156.50 6.15  6.8074
259.59 	     38  6.755.886.405.906.106.50 6.10  6.7125
259.60 	     39  6.755.846.205.806.056.50 6.05  6.6054
259.61 	     40  6.755.806.005.706.006.50 6.00  6.5000
259.62 	     41  6.755.765.905.605.906.50 5.95  6.3540
259.63 	     42  6.755.725.805.505.806.50 5.90  6.2087
259.64 	     43  6.655.685.705.405.706.50 5.85  6.0622
259.65 	     44  6.555.645.605.305.606.50 5.80  5.9048
259.66 	     45  6.455.605.505.205.506.50 5.75  5.7500
259.67 	     46  6.355.565.455.105.406.40 5.70  5.6940
259.68 	     47  6.255.525.405.005.306.30 5.65  5.6375
259.69 	     48  6.155.485.355.005.206.20 5.60  5.5822
259.70 	     49  6.055.445.305.005.106.10 5.55  5.5404
259.71 	     50  5.955.405.255.005.006.00 5.50  5.5000
260.1 	     51  5.855.365.255.005.005.90 5.45  5.4384
260.2 	     52  5.755.325.255.005.005.80 5.40  5.3776
260.3 	     53  5.655.285.255.005.005.70 5.35  5.3167
260.4 	     54  5.555.245.255.005.005.60 5.30  5.2826
260.5 	     55  5.455.205.255.005.005.50 5.25  5.2500
260.6 	     56  5.355.165.255.005.005.40 5.20  5.2500
260.7 	     57  5.255.125.255.005.005.30 5.15  5.2500
260.8 	     58  5.255.085.255.105.005.20 5.10  5.2500
260.9 	     59  5.255.045.255.205.005.10 5.05  5.2500
260.10 	     60  5.255.005.255.305.005.00 5.00  5.2500
260.11 	     61  5.255.005.255.405.005.00 5.00  5.2500
260.12 	     62  5.255.005.255.505.005.00 5.00  5.2500
260.13 	     63  5.255.005.255.605.005.00 5.00  5.2500
260.14 	     64  5.255.005.255.705.005.00 5.00  5.2500
260.15 	     65  5.255.005.255.705.005.00 5.00  5.2500
260.16 	     66  5.255.005.255.705.005.00 5.00  5.2500
260.17 	     67  5.255.005.255.705.005.00 5.00  5.2500
260.18 	     68  5.255.005.255.705.005.00 5.00  5.2500
260.19 	     69  5.255.005.255.705.005.00 5.00  5.2500
260.20 	     70  5.255.005.255.705.005.00 5.00  5.2500
260.21 	     71  5.255.00         5.70
260.22 	(c) The actuarial valuation must use the applicable
260.23 	following payroll growth assumption for calculating the
260.24 	amortization requirement for the unfunded actuarial accrued
260.25 	liability where the amortization retirement is calculated as a
260.26 	level percentage of an increasing payroll:
260.27 	payroll growth
260.28 	                  plan                             assumption
260.29 	     general state employees retirement plan          5.00%
260.30 	     correctional state employees retirement plan     5.00
260.31 	     State Patrol retirement plan                     5.00
260.32 	     legislators retirement plan                      5.00
260.33 	     elective state officers retirement plan          5.00
260.34 	     judges retirement plan                           5.00
260.35 	     general public employees retirement plan         6.00
260.36 	     public employees police and fire
260.37 	         retirement plan                              6.00
260.38 	     local government correctional service
260.39 	         retirement plan                              6.00
260.40 	     teachers retirement plan                         5.00
260.41 	     Duluth teachers retirement plan                  5.00
260.42 	Minneapolis teachers retirement plan 5.00 
260.43 	     St. Paul teachers retirement plan                5.00

260.44 	Sec. 33. Minnesota Statutes 2004, section 356.215,
260.45 	subdivision 11, is amended to read:
260.46 		Subd. 11.Amortization contributions.  (a) In addition to
260.47 	the exhibit indicating the level normal cost, the actuarial
260.48 	valuation must contain an exhibit indicating the additional
260.49 	annual contribution sufficient to amortize the unfunded
260.50 	actuarial accrued liability.  For funds governed by chapters 3A,
260.51 	352, 352B, 352C, 353, 354, 354A, and 490, the additional
260.52 	contribution must be calculated on a level percentage of covered
260.53 	payroll basis by the established date for full funding in effect
260.54 	when the valuation is prepared.  For funds governed by chapter
261.1 	3A, sections 352.90 through 352.951, chapters 352B, 352C,
261.2 	sections 353.63 through 353.68, and chapters 353C, 354A, and
261.3 	490, the level percent additional contribution must be
261.4 	calculated assuming annual payroll growth of 6.5 percent.  For
261.5 	funds governed by sections 352.01 through 352.86 and chapter
261.6 	354, the level percent additional contribution must be
261.7 	calculated assuming an annual payroll growth of five percent.
261.8 	For the fund governed by sections 353.01 through 353.46, the
261.9 	level percent additional contribution must be calculated
261.10 	assuming an annual payroll growth of six percent.  For all other
261.11 	funds, the additional annual contribution must be calculated on
261.12 	a level annual dollar amount basis.
261.13 	(b) For any fund other than the Minneapolis Employees
261.14 	Retirement Fund and the Public Employees Retirement Association
261.15 	general plan, if there has not been a change in the actuarial
261.16 	assumptions used for calculating the actuarial accrued liability
261.17 	of the fund, a change in the benefit plan governing annuities
261.18 	and benefits payable from the fund, a change in the actuarial
261.19 	cost method used in calculating the actuarial accrued liability
261.20 	of all or a portion of the fund, or a combination of the three,
261.21 	which change or changes by itself or by themselves without
261.22 	inclusion of any other items of increase or decrease produce a
261.23 	net increase in the unfunded actuarial accrued liability of the
261.24 	fund, the established date for full funding is the first
261.25 	actuarial valuation date occurring after June 1, 2020.
261.26 	(c) For any fund or plan other than the Minneapolis
261.27 	Employees Retirement Fund and the Public Employees Retirement
261.28 	Association general plan, if there has been a change in any or
261.29 	all of the actuarial assumptions used for calculating the
261.30 	actuarial accrued liability of the fund, a change in the benefit
261.31 	plan governing annuities and benefits payable from the fund, a
261.32 	change in the actuarial cost method used in calculating the
261.33 	actuarial accrued liability of all or a portion of the fund, or
261.34 	a combination of the three, and the change or changes, by itself
261.35 	or by themselves and without inclusion of any other items of
261.36 	increase or decrease, produce a net increase in the unfunded
262.1 	actuarial accrued liability in the fund, the established date
262.2 	for full funding must be determined using the following
262.3 	procedure:
262.4 	(i) the unfunded actuarial accrued liability of the fund
262.5 	must be determined in accordance with the plan provisions
262.6 	governing annuities and retirement benefits and the actuarial
262.7 	assumptions in effect before an applicable change;
262.8 	(ii) the level annual dollar contribution or level
262.9 	percentage, whichever is applicable, needed to amortize the
262.10 	unfunded actuarial accrued liability amount determined under
262.11 	item (i) by the established date for full funding in effect
262.12 	before the change must be calculated using the interest
262.13 	assumption specified in subdivision 8 in effect before the
262.14 	change;
262.15 	(iii) the unfunded actuarial accrued liability of the fund
262.16 	must be determined in accordance with any new plan provisions
262.17 	governing annuities and benefits payable from the fund and any
262.18 	new actuarial assumptions and the remaining plan provisions
262.19 	governing annuities and benefits payable from the fund and
262.20 	actuarial assumptions in effect before the change;
262.21 	(iv) the level annual dollar contribution or level
262.22 	percentage, whichever is applicable, needed to amortize the
262.23 	difference between the unfunded actuarial accrued liability
262.24 	amount calculated under item (i) and the unfunded actuarial
262.25 	accrued liability amount calculated under item (iii) over a
262.26 	period of 30 years from the end of the plan year in which the
262.27 	applicable change is effective must be calculated using the
262.28 	applicable interest assumption specified in subdivision 8 in
262.29 	effect after any applicable change;
262.30 	(v) the level annual dollar or level percentage
262.31 	amortization contribution under item (iv) must be added to the
262.32 	level annual dollar amortization contribution or level
262.33 	percentage calculated under item (ii);
262.34 	(vi) the period in which the unfunded actuarial accrued
262.35 	liability amount determined in item (iii) is amortized by the
262.36 	total level annual dollar or level percentage amortization
263.1 	contribution computed under item (v) must be calculated using
263.2 	the interest assumption specified in subdivision 8 in effect
263.3 	after any applicable change, rounded to the nearest integral
263.4 	number of years, but not to exceed 30 years from the end of the
263.5 	plan year in which the determination of the established date for
263.6 	full funding using the procedure set forth in this clause is
263.7 	made and not to be less than the period of years beginning in
263.8 	the plan year in which the determination of the established date
263.9 	for full funding using the procedure set forth in this clause is
263.10 	made and ending by the date for full funding in effect before
263.11 	the change; and
263.12 	(vii) the period determined under item (vi) must be added
263.13 	to the date as of which the actuarial valuation was prepared and
263.14 	the date obtained is the new established date for full funding.
263.15 	(d) For the Minneapolis Employees Retirement Fund, the
263.16 	established date for full funding is June 30, 2020.
263.17 	(e) For the general employees retirement plan of the Public
263.18 	Employees Retirement Association, the established date for full
263.19 	funding is June 30, 2031.
263.20 	(f) For the Teachers Retirement Association, the
263.21 	established date for full funding is June 30, 2035.
263.22 	(g) For the retirement plans for which the annual actuarial
263.23 	valuation indicates an excess of valuation assets over the
263.24 	actuarial accrued liability, the valuation assets in excess of
263.25 	the actuarial accrued liability must be recognized as a
263.26 	reduction in the current contribution requirements by an amount
263.27 	equal to the amortization of the excess expressed as a level
263.28 	percentage of pay over a 30-year period beginning anew with each
263.29 	annual actuarial valuation of the plan.

263.30 	Sec. 34. Minnesota Statutes 2004, section 356.30,
263.31 	subdivision 3, is amended to read:
263.32 		Subd. 3.Covered plans.  This section applies to the
263.33 	following retirement plans:
263.34 	(1) the general state employees retirement plan of the
263.35 	Minnesota State Retirement System, established under chapter
263.36 	352;
264.1 	(2) the correctional state employees retirement plan of the
264.2 	Minnesota State Retirement System, established under chapter
264.3 	352;
264.4 	(3) the unclassified employees retirement program,
264.5 	established under chapter 352D;
264.6 	(4) the State Patrol retirement plan, established under
264.7 	chapter 352B;
264.8 	(5) the legislators retirement plan, established under
264.9 	chapter 3A;
264.10 	(6) the elective state officers' retirement plan,
264.11 	established under chapter 352C;
264.12 	(7) the general employees retirement plan of the Public
264.13 	Employees Retirement Association, established under chapter 353;
264.14 	(8) the public employees police and fire retirement plan of
264.15 	the Public Employees Retirement Association, established under
264.16 	chapter 353;
264.17 	(9) the local government correctional service retirement
264.18 	plan of the Public Employees Retirement Association, established
264.19 	under chapter 353E;
264.20 	(10) the Teachers Retirement Association, established under
264.21 	chapter 354;
264.22 	(11) the Minneapolis Employees Retirement Fund, established
264.23 	under chapter 422A;
264.24 	(12) the Minneapolis Teachers Retirement Fund Association,
264.25 	established under chapter 354A;
264.26 	(13) the St. Paul Teachers Retirement Fund Association,
264.27 	established under chapter 354A;
264.28 	(14) (13) the Duluth Teachers Retirement Fund Association,
264.29 	established under chapter 354A; and
264.30 	(15) (14) the judges' retirement fund, established by
264.31 	sections 490.121 to 490.132.

264.32 	Sec. 35. Minnesota Statutes 2004, section 356.302,
264.33 	subdivision 7, is amended to read:
264.34 		Subd. 7.Covered retirement plans.  This section applies
264.35 	to the following retirement plans:
264.36 	(1) the general state employees retirement plan of the
265.1 	Minnesota State Retirement System, established by chapter 352;
265.2 	(2) the unclassified state employees retirement program of
265.3 	the Minnesota State Retirement System, established by chapter
265.4 	352D;
265.5 	(3) the general employees retirement plan of the Public
265.6 	Employees Retirement Association, established by chapter 353;
265.7 	(4) the Teachers Retirement Association, established by
265.8 	chapter 354;
265.9 	(5) the Duluth Teachers Retirement Fund Association,
265.10 	established by chapter 354A;
265.11 	(6) the Minneapolis Teachers Retirement Fund Association,
265.12 	established by chapter 354A;
265.13 	(7) the St. Paul Teachers Retirement Fund Association,
265.14 	established by chapter 354A;
265.15 	(8) (7) the Minneapolis Employees Retirement Fund,
265.16 	established by chapter 422A;
265.17 	(9) (8) the state correctional employees retirement plan of
265.18 	the Minnesota State Retirement System, established by chapter
265.19 	352;
265.20 	(10) (9) the State Patrol retirement plan, established by
265.21 	chapter 352B;
265.22 	(11) (10) the public employees police and fire plan of the
265.23 	Public Employees Retirement Association, established by chapter
265.24 	353;
265.25 	(12) (11) the local government correctional service
265.26 	retirement plan of the Public Employees Retirement Association,
265.27 	established by chapter 353E; and
265.28 	(13) (12) the judges' retirement plan, established by
265.29 	sections 490.121 to 490.132.

265.30 	Sec. 36. Minnesota Statutes 2004, section 356.303,
265.31 	subdivision 4, is amended to read:
265.32 		Subd. 4.Covered retirement plans.  This section applies
265.33 	to the following retirement plans:
265.34 	(1) the legislators retirement plan, established by chapter
265.35 	3A;
265.36 	(2) the general state employees retirement plan of the
266.1 	Minnesota State Retirement System, established by chapter 352;
266.2 	(3) the correctional state employees retirement plan of the
266.3 	Minnesota State Retirement System, established by chapter 352;
266.4 	(4) the State Patrol retirement plan, established by
266.5 	chapter 352B;
266.6 	(5) the elective state officers retirement plan,
266.7 	established by chapter 352C;
266.8 	(6) the unclassified state employees retirement program,
266.9 	established by chapter 352D;
266.10 	(7) the general employees retirement plan of the Public
266.11 	Employees Retirement Association, established by chapter 353;
266.12 	(8) the public employees police and fire plan of the Public
266.13 	Employees Retirement Association, established by chapter 353;
266.14 	(9) the local government correctional service retirement
266.15 	plan of the Public Employees Retirement Association, established
266.16 	by chapter 353E;
266.17 	(10) the Teachers Retirement Association, established by
266.18 	chapter 354;
266.19 	(11) the Duluth Teachers Retirement Fund Association,
266.20 	established by chapter 354A;
266.21 	(12) the Minneapolis Teachers Retirement Fund Association,
266.22 	established by chapter 354A;
266.23 	(13) the St. Paul Teachers Retirement Fund Association,
266.24 	established by chapter 354A;
266.25 	(14) (13) the Minneapolis Employees Retirement Fund,
266.26 	established by chapter 422A; and
266.27 	(15) (14) the judges' retirement fund, established by
266.28 	sections 490.121 to 490.132.

266.29 	Sec. 37. Minnesota Statutes 2004, section 356.315, is
266.30 	amended by adding a subdivision to read:
266.31 		Subd. 1a.Coordinated plan members. The applicable
266.32 	benefit accrual rate is 1.5 percent.

266.33 	Sec. 38. Minnesota Statutes 2004, section 356.42,
266.34 	subdivision 3, is amended to read:
266.35 		Subd. 3.Covered retirement plans.  The postretirement
266.36 	adjustment provided in this section applies to the following
267.1 	retirement funds:
267.2 	(1) the general employees retirement plans of the Public
267.3 	Employees Retirement Association;
267.4 	(2) the public employees police and fire plan of the Public
267.5 	Employees Retirement Association;
267.6 	(3) the teachers retirement association;
267.7 	(4) the State Patrol retirement plan;
267.8 	(5) the state employees retirement plan of the Minnesota
267.9 	State Retirement System;
267.10 	(6) the Minneapolis Teachers Retirement Fund Association
267.11 	established under chapter 354A;
267.12 	(7) the St. Paul Teachers Retirement Fund Association
267.13 	established under chapter 354A; and
267.14 	(8) (7) the Duluth Teachers Retirement Fund Association
267.15 	established under chapter 354A.

267.16 	Sec. 39. Minnesota Statutes 2004, section 356.465,
267.17 	subdivision 3, is amended to read:
267.18 		Subd. 3.Covered retirement plans.  The provisions of
267.19 	this section apply to the following retirement plans:
267.20 	(1) the general state employees retirement plan of the
267.21 	Minnesota State Retirement System established under chapter 352;
267.22 	(2) the correctional state employees retirement plan of the
267.23 	Minnesota State Retirement System established under chapter 352;
267.24 	(3) the State Patrol retirement plan established under
267.25 	chapter 352B;
267.26 	(4) the legislators retirement plan established under
267.27 	chapter 3A;
267.28 	(5) the judges retirement plan established under chapter
267.29 	490;
267.30 	(6) the general employees retirement plan of the Public
267.31 	Employees Retirement Association established under chapter 353;
267.32 	(7) the public employees police and fire plan of the Public
267.33 	Employees Retirement Association established under chapter 353;
267.34 	(8) the teachers retirement plan established under chapter
267.35 	354;
267.36 	(9) the Duluth Teachers Retirement Fund Association
268.1 	established under chapter 354A;
268.2 	(10) the St. Paul Teachers Retirement Fund Association
268.3 	established under chapter 354A;
268.4 	(11) the Minneapolis Teachers Retirement Fund Association
268.5 	established under chapter 354A;
268.6 	(12) the Minneapolis employees retirement plan established
268.7 	under chapter 422A;
268.8 	(13) (12) the Minneapolis Firefighters Relief Association
268.9 	established under chapter 423C;
268.10 	(14) (13) the Minneapolis Police Relief Association
268.11 	established under chapter 423B; and
268.12 	(15) (14) the local government correctional service
268.13 	retirement plan of the Public Employees Retirement Association
268.14 	established under chapter 353E.

268.15 	Sec. 40. Minnesota Statutes 2004, section 423A.02,
268.16 	subdivision 1b, is amended to read:
268.17 		Subd. 1b.Additional amortization state aid.  (a)
268.18 	Annually, on October 1, the commissioner of revenue shall
268.19 	allocate the additional amortization state aid transferred under
268.20 	section 69.021, subdivision 11, to:
268.21 	(1) all police or salaried firefighters relief associations
268.22 	governed by and in full compliance with the requirements of
268.23 	section 69.77, that had an unfunded actuarial accrued liability
268.24 	in the actuarial valuation prepared under sections 356.215 and
268.25 	356.216 as of the preceding December 31;
268.26 	(2) all local police or salaried firefighter consolidation
268.27 	accounts governed by chapter 353A that are certified by the
268.28 	executive director of the public employees retirement
268.29 	association as having for the current fiscal year an additional
268.30 	municipal contribution amount under section 353A.09, subdivision
268.31 	5, paragraph (b), and that have implemented section 353A.083,
268.32 	subdivision 1, if the effective date of the consolidation
268.33 	preceded May 24, 1993, and that have implemented section
268.34 	353A.083, subdivision 2, if the effective date of the
268.35 	consolidation preceded June 1, 1995; and
268.36 	(3) the municipalities that are required to make an
269.1 	additional municipal contribution under section 353.665,
269.2 	subdivision 8, for the duration of the required additional
269.3 	contribution.
269.4 	(b) The commissioner shall allocate the state aid on the
269.5 	basis of the proportional share of the relief association or
269.6 	consolidation account of the total unfunded actuarial accrued
269.7 	liability of all recipient relief associations and consolidation
269.8 	accounts as of December 31, 1993, for relief associations, and
269.9 	as of June 30, 1994, for consolidation accounts.
269.10 	(c) Beginning October 1, 2000, and annually thereafter, the
269.11 	commissioner shall allocate the state aid, including any state
269.12 	aid in excess of the limitation in subdivision 4, on the
269.13 	following basis:
269.14 	(1) 64.5 percent to the municipalities to which section
269.15 	353.665, subdivision 8, paragraph (b), or 353A.09, subdivision
269.16 	5, paragraph (b), apply for distribution in accordance with
269.17 	paragraph (b) and subject to the limitation in subdivision 4;
269.18 	(2) 34.2 percent to the city of Minneapolis to fund any
269.19 	unfunded actuarial accrued liability in the actuarial valuation
269.20 	prepared under sections 356.215 and 356.216 as of the preceding
269.21 	December 31 for the Minneapolis Police Relief Association or the
269.22 	Minneapolis Fire Department Relief Association; and
269.23 	(3) 1.3 percent to the city of Virginia to fund any
269.24 	unfunded actuarial accrued liability in the actuarial valuation
269.25 	prepared under sections 356.215 and 356.216 as of the preceding
269.26 	December 31 for the Virginia Fire Department Relief Association.
269.27 	If there is no unfunded actuarial accrued liability in both
269.28 	the Minneapolis Police Relief Association and the Minneapolis
269.29 	Fire Department Relief Association as disclosed in the most
269.30 	recent actuarial valuations for the relief associations prepared
269.31 	under sections 356.215 and 356.216, the commissioner shall
269.32 	allocate that 34.2 percent of the aid as follows:  49 percent to
269.33 	the Minneapolis Teachers Retirement Fund Association, 21 percent
269.34 	to the St. Paul Teachers Retirement Fund Association, and 30
269.35 	percent as additional funding to support minimum fire state aid
269.36 	for volunteer firefighters relief associations.  If there is no
270.1 	unfunded actuarial accrued liability in the Virginia Fire
270.2 	Department Relief Association as disclosed in the most recent
270.3 	actuarial valuation for the relief association prepared under
270.4 	sections 356.215 and 356.216, the commissioner shall allocate
270.5 	that 1.3 percent of the aid as follows:  49 percent to the
270.6 	Minneapolis Teachers Retirement Fund Association, 21 percent to
270.7 	the St. Paul Teachers Retirement Fund Association, and 30
270.8 	percent as additional funding to support minimum fire state aid
270.9 	for volunteer firefighters relief associations.  The allocation
270.10 	must be made by the commissioner at the same time and under the
270.11 	same procedures as specified in subdivision 3.  With respect to
270.12 	the Minneapolis Teachers Retirement Fund Association or the St.
270.13 	Paul Teachers Retirement Fund Association, annually, beginning
270.14 	on July 1, 2005, if the applicable teacher's association
270.15 	five-year average time-weighted rate of investment return does
270.16 	not equal or exceed the performance of a composite portfolio
270.17 	assumed passively managed (indexed) invested ten percent in cash
270.18 	equivalents, 60 percent in bonds and similar debt securities,
270.19 	and 30 percent in domestic stock calculated using the formula
270.20 	under section 11A.04, clause (11), the aid allocation to that
270.21 	retirement fund under this section ceases until the five-year
270.22 	annual rate of investment return equals or exceeds the
270.23 	performance of that composite portfolio.
270.24 	(d) The amounts required under this subdivision are
270.25 	annually appropriated to the commissioner of revenue.

270.26 	Sec. 41. FULL FUNDING DATE.
 270.27 	Notwithstanding any other law to the contrary, for the
270.28 	Teachers Retirement Association, the established date for full
270.29 	funding is 2035.

270.30 	Sec. 42. MTRFA EMPLOYEE JOB PREFERENCE.
 270.31 	An employee of the Minneapolis Teachers Retirement Fund
270.32 	Association on the date of enactment has an employment
270.33 	preference for subsequent employment by the Teachers Retirement
270.34 	Association, the Minnesota State Retirement System, or the
270.35 	Public Employees Retirement Association equivalent to the
270.36 	preference provided to armed forces veterans under state law and
271.1 	Department of Employee Relations practice.

271.2 	Sec. 43. MTRFA ARTICLES AND BYLAWS; REPEAL;
271.3 	APPLICABILITY.
 271.4 	(a) The articles of incorporation and bylaws of the
271.5 	Minneapolis Teachers Retirement Fund Association are repealed
271.6 	and have application only as provided in section 6, subdivision
271.7 	6, and paragraph (b).
271.8 	(b) The articles of incorporation and bylaws of the
271.9 	Minneapolis Teachers Retirement Fund Association only apply to
271.10 	members of the former Minneapolis Teachers Retirement Fund
271.11 	Association with service credit in the plan on or before June
271.12 	30, 2005, and apply solely for purposes of determining the
271.13 	retirement annuity for or benefit on behalf of a member of the
271.14 	basic program of that retirement plan.
271.15 	(c) No annuity adjustment or increase under article 30 of
271.16 	the articles of incorporation of the Minneapolis Teachers
271.17 	Retirement Fund Association is applicable or payable after June
271.18 	30, 2005.

271.19 	Sec. 44. EDUCATION RESERVE ACCOUNT TRANSFERS.
 271.20 	Notwithstanding any other law to the contrary, any deposit
271.21 	into the education reserve account of the increased amount of
271.22 	the state general levy under Minnesota Statutes, section
271.23 	275.025, over the state general levy base amount for taxes
271.24 	payable in 2002, is first effective for property taxes remitted
271.25 	to the state after June 30, 2008.

271.26 	Sec. 45. APPROPRIATION.
 271.27 	(a) $2,500,000 is appropriated from the education reserve
271.28 	account in the special revenue fund to the commissioner of
271.29 	finance for transfer to the teachers retirement fund as required
271.30 	by section 6.  $1,250,000 is for the fiscal year ending June 30,
271.31 	2006, and $1,250,000 is for the fiscal year ending June 30, 2007.
271.32 	Additionally, $2,500,000 is appropriated from the general fund
271.33 	to the commissioner of finance for transfer to the teachers
271.34 	retirement fund as required by section 6.  $1,250,000 is for the
271.35 	fiscal year ending June 30, 2006, and $1,250,000 is for the
271.36 	fiscal year ending June 30, 2007.
272.1 	(b) For fiscal years 2006 and 2007 only, the amount
272.2 	necessary to make state aid payments for the additional employer
272.3 	contributions required under Minnesota Statutes, section 354.42,
272.4 	subdivision 3, is appropriated from the general fund.

272.5 	Sec. 46. REPEALER.
 272.6 	Minnesota Statutes 2004, sections 354A.051; 354A.105;
272.7 	354A.23, subdivision 1; and 354A.28, are repealed.

272.8 	Sec. 47. EFFECTIVE DATE.
 272.9 	(a) Sections 1, 2, 20, and 21 are effective the day
272.10 	following final enactment.
272.11 	(b) Section 8 is effective June 30, 2005.
272.12 	(c) Sections 3 to 7, 9 to 19, and 22 to 46 are effective
272.13 	the day following final enactment.

272.14 	ARTICLE 17
272.15 	PRE-1969 TEACHER SPECIAL POSTRETIREMENT
272.16 	ADJUSTMENT

272.17 	Section 1. [354.551] ADDITIONAL BENEFIT FOR CERTAIN
272.18 	TEACHERS.
272.19 		Subdivision 1.Additional benefit entitlement. If there
272.20 	is an appropriation for this purpose and to the extent of that
272.21 	appropriation, eligible retired teachers as defined in
272.22 	subdivision 2 are entitled to receive the additional benefit
272.23 	amount determined under subdivision 3 unless the applicable
272.24 	person files a written notification with the executive director
272.25 	of the Teachers Retirement Association that the additional
272.26 	benefit not be paid.
272.27 		Subd. 2.Eligibility. An eligible person for purposes of
272.28 	this section is a person who:
272.29 	(1) was a teacher as defined in section 354.05, subdivision
272.30 	2;
272.31 	(2) rendered teaching service as defined in section 354.05,
272.32 	subdivision 3, either during the 1968-1969 school year, but was
272.33 	not covered by the improved money purchase program savings
272.34 	clause in section 354.55, subdivision 17, or before the
272.35 	1968-1969 school year, did not take a refund of member
272.36 	contributions upon the termination of teacher service, and was
273.1 	eligible to make an election under Minnesota Statutes 1971,
273.2 	section 354.55, subdivision 8.
273.3 		Subd. 3.Determination of additional benefit amount. (a)
273.4 	By July 1, annually, the executive director of the Teachers
273.5 	Retirement Association shall determine which retired teachers
273.6 	are eligible to receive an additional benefit amount under this
273.7 	section and the amount of each person's additional benefit
273.8 	amount.
273.9 	If the applicable appropriation permits, as determined by
273.10 	the executive director of the Teachers Retirement Association,
273.11 	the increase amount is 45 percent of the difference, if a
273.12 	positive number, obtained by subtracting the single life annuity
273.13 	amount initially payable upon retirement under section 354.44,
273.14 	subdivision 6, from a comparable single life annuity amount
273.15 	computed as of the same date under section 354.44, subdivision
273.16 	2.  If the applicable appropriation does not permit the full
273.17 	postretirement adjustment payment amount as determined by the
273.18 	executive director of the Teachers Retirement Association, the
273.19 	increase amount is that portion of the full increase amount that
273.20 	bears the same relationship to the full increase amount that the
273.21 	appropriation bears to the full required funding for the full
273.22 	increase amount.
273.23 	(b) The additional retirement benefit is payable beginning
273.24 	July 1, 2005, for persons who were receiving a retirement
273.25 	annuity on June 1, 2005, or with the initial retirement annuity
273.26 	payment for persons who were active, deferred, or inactive
273.27 	members on June 1, 2005.
273.28 		Subd. 4.Duration of additional benefit. If the
273.29 	appropriations permit, the additional benefit amount is payable
273.30 	for life or for the duration of the selected optional annuity
273.31 	form, whichever applies.
273.32 		Subd. 5.No payment to estate; no retroactivity. (a)
273.33 	Nothing in this section authorizes the payment of an additional
273.34 	benefit amount under this section to an estate or to a survivor
273.35 	or beneficiary other than under an optional annuity form.
273.36 	(b) Nothing in this section authorizes the payment of an
274.1 	additional benefit amount for any period before July 1, 2005.
274.2 	(c) Nothing in this section authorizes the payment of an
274.3 	additional benefit amount to a person who was or is entitled to
274.4 	have their retirement annuity calculated under section 354.44,
274.5 	subdivision 2.

274.6 	Sec. 2. APPROPRIATION.
 274.7 	There is appropriated from the education reserve account in
274.8 	the special revenue fund to the executive director of the
274.9 	Teachers Retirement Association for the purposes of the special
274.10 	postretirement adjustment under section 1 $11,000,000 for the
274.11 	year ending June 30, 2006, and $11,000,000 for the year ending
274.12 	June 30, 2007.

274.13 	Sec. 3. EFFECTIVE DATE.
 274.14 	Sections 1 and 2 are effective on July 1, 2005.

274.15 	ARTICLE 18
274.16 	PENSION DEFAULT INSURANCE POOL

274.17 	Section 1. Minnesota Statutes 2004, section 352.04,
274.18 	subdivision 12, is amended to read:
274.19 		Subd. 12.Fund disbursement restricted. (a) The state
274.20 	employees retirement fund and the participation in the Minnesota
274.21 	postretirement investment fund must be disbursed only for the
274.22 	purposes provided by law.
274.23 	(b) The expenses of the system, the pension default
274.24 	insurance pool charge under section 356.95,and any benefits
274.25 	provided by law, other than benefits payable from the Minnesota
274.26 	postretirement investment fund, must be paid from the state
274.27 	employees retirement fund.
274.28 	(c) The retirement allowances, retirement annuities, and
274.29 	disability benefits, as well as refunds of any sum remaining to
274.30 	the credit of a deceased retired employee or a disabled employee
274.31 	must be paid only from the state employees retirement fund after
274.32 	the needs have been certified and the amounts withdrawn from the
274.33 	participation in the Minnesota postretirement investment fund
274.34 	under section 11A.18.
274.35 	(d) The amounts necessary to make the payments from the
274.36 	state employees retirement fund and the participation in the
275.1 	Minnesota postretirement investment fund are annually
275.2 	appropriated from these funds for those purposes.

275.3 	Sec. 2. Minnesota Statutes 2004, section 352.911,
275.4 	subdivision 5, is amended to read:
275.5 		Subd. 5.Fund disbursement restricted. (a) The
275.6 	correctional employees retirement fund and its share of
275.7 	participation in the Minnesota postretirement investment fund
275.8 	shall be disbursed only for the purposes provided for in the
275.9 	applicable provisions in this chapter.
275.10 	(b) The proportional share of the expenses of the system,
275.11 	the pension default insurance pool charge under section 356.95,
275.12 	and any benefits provided in sections 352.90 to 352.951, other
275.13 	than benefits payable from the Minnesota postretirement
275.14 	investment fund, shall be paid from the correctional employees
275.15 	retirement fund.
275.16 	(c) The retirement allowances, retirement annuities, the
275.17 	disability benefits, the survivorship benefits, and any refunds
275.18 	of accumulated deductions shall be paid only from the
275.19 	correctional employees retirement fund after those needs have
275.20 	been certified by the executive director and the amounts
275.21 	withdrawn from the share of participation in the Minnesota
275.22 	postretirement fund under section 11A.18.
275.23 	(d) The amounts necessary to make the payments from the
275.24 	correctional employees retirement fund and the participation in
275.25 	the Minnesota postretirement investment fund are annually
275.26 	appropriated from those funds for those purposes.

275.27 	Sec. 3. Minnesota Statutes 2004, section 352B.02,
275.28 	subdivision 1d, is amended to read:
275.29 		Subd. 1d.Fund revenue and expenses.  The amounts
275.30 	provided for in this section must be credited to the State
275.31 	Patrol retirement fund.  All money received must be deposited by
275.32 	the commissioner of finance in the State Patrol retirement
275.33 	fund.  The fund must be used to pay the administrative expenses
275.34 	of the retirement fund, the pension default insurance pool
275.35 	charge under section 356.95,and the benefits and annuities
275.36 	provided in this chapter.  Appropriate amounts shall be
276.1 	transferred to or withdrawn from the Minnesota postretirement
276.2 	investment fund as provided in section 352B.26.

276.3 	Sec. 4. Minnesota Statutes 2004, section 352D.09,
276.4 	subdivision 7, is amended to read:
276.5 		Subd. 7.Administrative fees.  The board of directors
276.6 	shall establish a budget and charge participants a fee to pay
276.7 	the administrative expenses of the unclassified program and the
276.8 	pension default insurance pool charge under section 356.95.
276.9 	Fees cannot be charged on contributions and investment returns
276.10 	attributable to contributions made before July 1, 1992.  Annual
276.11 	total fees charged for plan administration cannot exceed 10/100
276.12 	of one percent of the contributions and investment returns
276.13 	attributable to contributions made on or after July 1, 1992.

276.14 	Sec. 5. Minnesota Statutes 2004, section 353.27,
276.15 	subdivision 1, is amended to read:
276.16 		Subdivision 1.Income; disbursements.  There is a special
276.17 	fund known as the "public employees retirement fund," the
276.18 	"retirement fund," or the "fund," which shall include all the
276.19 	assets of the association.  This fund shall be credited with all
276.20 	contributions, all interest and all other income authorized by
276.21 	law.  From this fund there is appropriated the payments
276.22 	authorized by this chapter in the amounts and at such time
276.23 	provided herein, including the expenses of administering the
276.24 	fund, including the pension default insurance pool charge under
276.25 	section 356.95,and including the proper share of the Minnesota
276.26 	postretirement investment fund.

276.27 	Sec. 6. Minnesota Statutes 2004, section 353.65,
276.28 	subdivision 6, is amended to read:
276.29 		Subd. 6.Fund.  All contributions other than the excess
276.30 	contribution established by section 69.031, subdivision 5,
276.31 	paragraphs (2), clauses (b) and (c), and (3) shall be credited
276.32 	to the fund and all interest and other income of the fund shall
276.33 	be credited to said fund.  The retirement fund shall be
276.34 	disbursed only for the purposes herein provided.  The expenses
276.35 	of said fund, the pension default insurance pool charge,and the
276.36 	annuities herein provided upon retirement shall be paid from
277.1 	said fund.

277.2 	Sec. 7. Minnesota Statutes 2004, section 353E.01,
277.3 	subdivision 5, is amended to read:
277.4 		Subd. 5.Fund disbursement restricted.  (a) The public
277.5 	employees local government correctional service retirement fund
277.6 	and its share of participation in the Minnesota postretirement
277.7 	investment fund may be disbursed only for the purposes provided
277.8 	for in this chapter.
277.9 	(b) The proportional share of the necessary and reasonable
277.10 	administrative expenses of the association, the pension default
277.11 	insurance pool charge under section 356.95,and any benefits
277.12 	provided in this chapter, other than benefits payable from the
277.13 	Minnesota postretirement investment fund, must be paid from the
277.14 	public employees local government correctional service
277.15 	retirement fund.  Retirement annuities, disability benefits,
277.16 	survivorship benefits, and any refunds of accumulated deductions
277.17 	may be paid only from the correctional service retirement fund
277.18 	after those needs have been certified by the executive director
277.19 	and any applicable amounts withdrawn from the share of
277.20 	participation in the Minnesota postretirement fund under section
277.21 	11A.18.
277.22 	(c) The amounts necessary to make the payments from the
277.23 	public employees local government correctional service
277.24 	retirement fund and its participation in the Minnesota
277.25 	postretirement investment fund are annually appropriated from
277.26 	those funds for those purposes.

277.27 	Sec. 8. Minnesota Statutes 2004, section 354.42, is
277.28 	amended by adding a subdivision to read:
277.29 		Subd. 8.Pension default charge. The pension default
277.30 	insurance pool charge under section 356.95 must be paid from the
277.31 	Teachers Retirement Association.

277.32 	Sec. 9. Minnesota Statutes 2004, section 354A.021,
277.33 	subdivision 4, is amended to read:
277.34 		Subd. 4.Fund disbursement restricted.  The assets of the
277.35 	special retirement fund shall be disbursed only for the purposes
277.36 	provided for in this chapter, the articles of incorporation or
278.1 	bylaws in effect as of March 31, 1975, and the articles of
278.2 	incorporation or bylaws adopted subsequent to March 31, 1975 in
278.3 	accordance with the provisions of section 354A.12. The pension
278.4 	default insurance pool charge under section 356.95 and all
278.5 	appropriate expenses of and any authorized benefits provided by
278.6 	the teachers retirement fund association shall be paid from the
278.7 	special retirement fund.  Amounts necessary to make payments
278.8 	from the special retirement fund of a teachers retirement fund
278.9 	association are hereby appropriated.
278.10 	Sec 10.  [356.95] [PENSION DEFAULT INSURANCE POOL.]
278.11 		Subdivision 1.Default insurance; legislative
278.12 	findings. The legislature finds that some Minnesota public
278.13 	pension plans have periodic funding difficulties and could
278.14 	default on the payment of retirement benefits in the future.
278.15 	The legislature further finds that a potential default may occur
278.16 	at a time when timely corrective legislative responses may not
278.17 	be possible, causing significant potential economic harm to
278.18 	affected benefit recipients.  To provide emergency funding
278.19 	resources for a Minnesota public pension plan facing a default
278.20 	in the payment of retirement benefits, the legislature is
278.21 	establishing an insurance pool to have resources for a temporary
278.22 	remedy for a defaulting pension plan.
278.23 		Subd. 2.Default insurance charge. (a) In fiscal year
278.24 	2006, the pension default insurance charge is $0.10 per month
278.25 	per active member and benefit recipient of a covered retirement
278.26 	plan.
278.27 	(b) The pension default insurance charge must be reassessed
278.28 	by the commissioner of finance, who shall revise the charge
278.29 	upward or downward based on an assessment of the potential risk
278.30 	of a future retirement plan default.  The consulting actuary
278.31 	retained under section 356.214 shall provide an assessment of
278.32 	the relative probability of future retirement plan defaults as
278.33 	part of the actuarial valuation reports performed annually.
278.34 		Subd. 3.Receipt of charges; investment. The pension
278.35 	default insurance charge is payable to the commissioner of
278.36 	finance for deposit in a special pension default insurance pool
279.1 	fund in the state treasury.  The special default insurance pool
279.2 	fund must be invested by the State Board of Investment in
279.3 	investments authorized under section 11A.24.
279.4 		Subd. 4.Disbursements. (a) The chief administrative
279.5 	officer of a covered retirement plan facing imminent default in
279.6 	the payment of retirement annuities and benefits is authorized
279.7 	to apply to the commissioner of finance for the transfer of
279.8 	assets to forestall the default.
279.9 	(b) If the commissioner of finance finds that a covered
279.10 	retirement plan is facing an imminent default, the commissioner
279.11 	may transfer the necessary amount of assets to avert the
279.12 	expected default from the pension default insurance pool.
279.13 		Subd. 5.Covered retirement plans. The retirement plans
279.14 	covered by the pension default insurance pool are:
279.15 	(1) the general state employees retirement plan of the
279.16 	Minnesota State Retirement System, established under chapter
279.17 	352;
279.18 	(2) the correctional state employees retirement plan of the
279.19 	Minnesota State Retirement System, established under chapter
279.20 	352;
279.21 	(3) the unclassified employees retirement program,
279.22 	established under chapter 352D;
279.23 	(4) the State Patrol retirement plan, established under
279.24 	chapter 352B;
279.25 	(5) the legislators retirement plan, established under
279.26 	chapter 3A;
279.27 	(6) the elective state officers' retirement plan,
279.28 	established under chapter 352C;
279.29 	(7) the general employees retirement plan of the Public
279.30 	Employees Retirement Association, established under chapter 353;
279.31 	(8) the public employees police and fire retirement plan of
279.32 	the Public Employees Retirement Association, established under
279.33 	chapter 353;
279.34 	(9) the local government correctional service retirement
279.35 	plan of the Public Employees Retirement Association, established
279.36 	under chapter 353E;
280.1 	(10) the Teachers Retirement Association, established under
280.2 	chapter 354;
280.3 	(11) the Minneapolis Employees Retirement Fund, established
280.4 	under chapter 422A;
280.5 	(12) the Minneapolis Teachers Retirement Fund Association,
280.6 	established under chapter 354A;
280.7 	(13) the St. Paul Teachers Retirement Fund Association,
280.8 	established under chapter 354A;
280.9 	(14) the Duluth Teachers Retirement Fund Association,
280.10 	established under chapter 354A; and 
280.11 	(15) the judges' retirement fund, established by sections
280.12 	490.121 to 490.132.

280.13 	Sec. 11. EFFECTIVE DATE.
 280.14 	Sections 1 to 10 are effective on the day following final
280.15 	enactment.

280.16 	ARTICLE 19
280.17 	DEFERRED ANNUITIES AUGMENTATION

280.18 	Section 1. Minnesota Statutes 2004, section 352.116,
280.19 	subdivision 1a, is amended to read:
280.20 		Subd. 1a.Actuarial reduction for early retirement.  This
280.21 	subdivision applies to a person who has become at least 55 years
280.22 	old and first became a covered employee after June 30, 1989, and
280.23 	to any other covered employee who has become at least 55 years
280.24 	old and whose annuity is higher when calculated under section
280.25 	352.115, subdivision 3, paragraph (b), in conjunction with this
280.26 	subdivision than when calculated under section 352.115,
280.27 	subdivision 3, paragraph (a), in conjunction with subdivision 1.
280.28 	A covered employee who retires before the normal retirement age
280.29 	shall be paid the normal retirement annuity provided in section
280.30 	352.115, subdivisions 2 and 3, paragraph (b), reduced so that
280.31 	the reduced annuity is the actuarial equivalent of the annuity
280.32 	that would be payable to the employee if the employee deferred
280.33 	receipt of the annuity and the annuity amount were augmented at
280.34 	an annual rate of three percent compounded annually from the day
280.35 	the annuity begins to accrue until the normal retirement age, if
280.36 	the employee became an employee before July 1, 2005, and is the
281.1 	actuarial equivalent of this annuity that would be payable to
281.2 	the employee if the employee deferred receipt of the annuity if
281.3 	the employee initially became an employee after June 30, 2005.

281.4 	Sec. 2. Minnesota Statutes 2004, section 352.72,
281.5 	subdivision 2, is amended to read:
281.6 		Subd. 2.Computation of deferred annuity.  (a) The
281.7 	deferred annuity, if any, accruing under subdivision 1, or
281.8 	section 352.22, subdivision 3, must be computed as provided in
281.9 	section 352.22, subdivision 3, on the basis of allowable service
281.10 	before termination of state service and augmented as provided
281.11 	herein.
281.12 	(b) If the employee became an employee before July 1, 2005,
281.13 	the required reserves applicable to a deferred annuity or to an
281.14 	annuity for which a former employee was eligible but had not
281.15 	applied or to any deferred segment of an annuity must be
281.16 	determined as of the date the benefit begins to accrue and
281.17 	augmented by interest compounded annually from the first day of
281.18 	the month following the month in which the employee ceased to be
281.19 	a state employee, or July 1, 1971, whichever is later, to the
281.20 	first day of the month in which the annuity begins to accrue.
281.21 	The rates of interest used for this purpose must be five percent
281.22 	compounded annually until January 1, 1981, and three percent
281.23 	compounded annually thereafter until January 1 of the year
281.24 	following the year in which the former employee attains age 55.
281.25 	From that date to the effective date of retirement, the rate is
281.26 	five percent compounded annually.  If a person has more than one
281.27 	period of uninterrupted service, the required reserves related
281.28 	to each period must be augmented by interest under this
281.29 	subdivision.  The sum of the augmented required reserves so
281.30 	determined is the present value of the annuity.  "Uninterrupted
281.31 	service" for the purpose of this subdivision means periods of
281.32 	covered employment during which the employee has not been
281.33 	separated from state service for more than two years.  If a
281.34 	person repays a refund, the service restored by the repayment
281.35 	must be considered continuous with the next period of service
281.36 	for which the employee has credit with this system.  The formula
282.1 	percentages used for each period of uninterrupted service must
282.2 	be those applicable to a new employee.  The mortality table and
282.3 	interest assumption used to compute the annuity must be those in
282.4 	effect when the employee files application for annuity.  This
282.5 	section does not reduce the annuity otherwise payable under this
282.6 	chapter.
282.7 	(c) If the employee initially became an employee after June
282.8 	30, 2005, no augmentation is payable on a deferred annuity.
282.9 	(b) (d) The retirement annuity or disability benefit of, or
282.10 	the survivor benefit payable on behalf of, a former state
282.11 	employee who terminated service before July 1, 1997, which is
282.12 	not first payable until after June 30, 1997, must be increased
282.13 	on an actuarial equivalent basis to reflect the change in the
282.14 	postretirement interest rate actuarial assumption under section
282.15 	356.215, subdivision 8, from five percent to six percent under a
282.16 	calculation procedure and the tables adopted by the board and
282.17 	approved by the actuary retained by the Legislative Commission
282.18 	on Pensions and Retirement.

282.19 	Sec. 3. Minnesota Statutes 2004, section 352B.30,
282.20 	subdivision 2, is amended to read:
282.21 		Subd. 2.Computation of deferred annuity. (a) Deferred
282.22 	annuities must be computed according to this chapter on the
282.23 	basis of allowable service before termination of service and
282.24 	augmented as provided in this chapter.
282.25 	(b) If the member became a member before July 1, 2005,the
282.26 	required reserves applicable to a deferred annuity must be
282.27 	augmented by interest compounded annually from the first day of
282.28 	the month following the month in which the member terminated
282.29 	service, or July 1, 1971, whichever is later, to the first day
282.30 	of the month in which the annuity begins to accrue.  The rates
282.31 	of interest used for this purpose shall be five percent per year
282.32 	compounded annually until January 1, 1981, and after that date
282.33 	three percent per year compounded annually.  The mortality table
282.34 	and interest assumption used to compute the annuity shall be
282.35 	those in effect when the member files application for annuity.
282.36 	(c) If the member initially became a member after June 30,
283.1 	2005, no augmentation is payable on a deferred annuity.

283.2 	Sec. 4. Minnesota Statutes 2004, section 353.30,
283.3 	subdivision 5, is amended to read:
283.4 		Subd. 5.Actuarial reduction for early retirement.  This
283.5 	subdivision applies to a member who has become at least 55 years
283.6 	old and first became a public employee after June 30, 1989, and
283.7 	to any other member who has become at least 55 years old and
283.8 	whose annuity is higher when calculated under section 353.29,
283.9 	subdivision 3, paragraph (b), in conjunction with this
283.10 	subdivision than when calculated under section 353.29,
283.11 	subdivision 3, paragraph (a), in conjunction with subdivision 1,
283.12 	1a, 1b, or 1c.  An employee who retires before normal retirement
283.13 	age shall be paid the retirement annuity provided in section
283.14 	353.29, subdivision 3, paragraph (b), reduced so that the
283.15 	reduced annuity is the actuarial equivalent of the annuity that
283.16 	would be payable to the employee if the employee deferred
283.17 	receipt of the annuity and the annuity amount were augmented at
283.18 	an annual rate of three percent compounded annually from the day
283.19 	the annuity begins to accrue until the normal retirement age if
283.20 	the member became a member before July 1, 2005, and is the
283.21 	actuarial equivalent of the annuity that would be payable to the
283.22 	member if the member deferred receipt of the annuity if the
283.23 	member initially became a member after June 30, 2005.

283.24 	Sec. 5. Minnesota Statutes 2004, section 353.71,
283.25 	subdivision 2, is amended to read:
283.26 		Subd. 2.Deferred annuity computation; augmentation.  (a)
283.27 	The deferred annuity accruing under subdivision 1, or under
283.28 	sections 353.34, subdivision 3, and 353.68, subdivision 4, must
283.29 	be computed on the basis of allowable service prior to the
283.30 	termination of public service and augmented as provided in this
283.31 	paragraph.
283.32 	(b) The required reserves applicable to a deferred annuity,
283.33 	or to any deferred segment of an annuity must be determined as
283.34 	of the first day of the month following the month in which the
283.35 	former member ceased to be a public employee, or July 1, 1971,
283.36 	whichever is later. If the member became a member before July
284.1 	1, 2005,these required reserves must be augmented at the rate
284.2 	of five percent annually compounded annually until January 1,
284.3 	1981, and at the rate of three percent thereafter until January
284.4 	1 of the year following the year in which the former member
284.5 	attains age 55.  From that date to the effective date of
284.6 	retirement, the rate is five percent compounded annually.  If a
284.7 	person has more than one period of uninterrupted service, the
284.8 	required reserves related to each period must be augmented as
284.9 	specified in this paragraph.  The sum of the augmented required
284.10 	reserves is the present value of the annuity.  Uninterrupted
284.11 	service for the purpose of this subdivision means periods of
284.12 	covered employment during which the employee has not been
284.13 	separated from public service for more than two years.  If a
284.14 	person repays a refund, the restored service must be considered
284.15 	as continuous with the next period of service for which the
284.16 	employee has credit with this association. This section must not
284.17 	reduce the annuity otherwise payable under this chapter.  This
284.18 	paragraph applies to individuals who become deferred annuitants
284.19 	on or after July 1, 1971.  For a member who became a deferred
284.20 	annuitant before July 1, 1971, the paragraph applies from July
284.21 	1, 1971, if the former active member applies for an annuity
284.22 	after July 1, 1973.
284.23 	(c) If the member initially became a member after June 30,
284.24 	2005, no augmentation is payable on a deferred annuity.
284.25 	(b) (d) The retirement annuity or disability benefit of, or
284.26 	the survivor benefit payable on behalf of, a former member who
284.27 	terminated service before July 1, 1997, or the survivor benefit
284.28 	payable on behalf of a basic or police and fire member who was
284.29 	receiving disability benefits before July 1, 1997, which is
284.30 	first payable after June 30, 1997, must be increased on an
284.31 	actuarial equivalent basis to reflect the change in the
284.32 	postretirement interest rate actuarial assumption under section
284.33 	356.215, subdivision 8, from five percent to six percent under a
284.34 	calculation procedure and tables adopted by the board and
284.35 	approved by the actuary retained by the Legislative Commission
284.36 	on Pensions and Retirement.

285.1 	Sec. 6. Minnesota Statutes 2004, section 353E.05, is
285.2 	amended to read:
285.3 	353E.05 AUGMENTATION IN CERTAIN CASES.
285.4 	Unless prior service has been transferred or unless a
285.5 	combined service annuity under section 356.30 has been elected,
285.6 	an employee who becomes a local government correctional employee
285.7 	after being a member of the Public Employees Retirement
285.8 	Association or the public employees police and fire fund is
285.9 	covered under section 353.71, subdivision 2, with respect to
285.10 	that prior service.  An employee who became an employee before
285.11 	July 1, 2005, and who becomes a member of the Public Employees
285.12 	Retirement Association or the public employees police and fire
285.13 	plan after being a local government correctional employee is
285.14 	also covered under section 353.71, subdivision 2, with respect
285.15 	to that prior service, unless calculated under section 356.30.

285.16 	Sec. 7. Minnesota Statutes 2004, section 354.44,
285.17 	subdivision 6, is amended to read:
285.18 		Subd. 6.Computation of formula program retirement
285.19 	annuity.  (a) The formula retirement annuity must be computed in
285.20 	accordance with the applicable provisions of the formulas stated
285.21 	in paragraph (b) or (d) on the basis of each member's average
285.22 	salary for the period of the member's formula service credit.
285.23 	For all years of formula service credit, "average salary,"
285.24 	for the purpose of determining the member's retirement annuity,
285.25 	means the average salary upon which contributions were made and
285.26 	upon which payments were made to increase the salary limitation
285.27 	provided in Minnesota Statutes 1971, section 354.511, for the
285.28 	highest five successive years of formula service credit
285.29 	provided, however, that such "average salary" shall not include
285.30 	any more than the equivalent of 60 monthly salary payments.
285.31 	Average salary must be based upon all years of formula service
285.32 	credit if this service credit is less than five years.
285.33 	(b) This paragraph, in conjunction with paragraph (c),
285.34 	applies to a person who first became a member of the association
285.35 	or a member of a pension fund listed in section 356.30,
285.36 	subdivision 3, before July 1, 1989, unless paragraph (d), in
286.1 	conjunction with paragraph (e), produces a higher annuity
286.2 	amount, in which case paragraph (d) applies.  The average salary
286.3 	as defined in paragraph (a), multiplied by the following
286.4 	percentages per year of formula service credit shall determine
286.5 	the amount of the annuity to which the member qualifying
286.6 	therefor is entitled:
286.7 	Coordinated Member   Basic Member
286.8 	Each year of service     the percent        the percent
286.9 	during first ten         specified in       specified in
286.10 	section 356.315,   section 356.315,
286.11 	subdivision 1,     subdivision 3,
286.12 	per year           per year
286.13 	Each year of service     the percent        the percent
286.14 	thereafter               specified in       specified in
286.15 	section 356.315,   section 356.315,
286.16 	subdivision 2,     subdivision 4,
286.17 	per year           per year
286.18 	(c)(i) This paragraph applies only to a person who first
286.19 	became a member of the association or a member of a pension fund
286.20 	listed in section 356.30, subdivision 3, before July 1, 1989,
286.21 	and whose annuity is higher when calculated under paragraph (b),
286.22 	in conjunction with this paragraph than when calculated under
286.23 	paragraph (d), in conjunction with paragraph (e).
286.24 	(ii) Where any member retires prior to normal retirement
286.25 	age under a formula annuity, the member shall be paid a
286.26 	retirement annuity in an amount equal to the normal annuity
286.27 	provided in paragraph (b) reduced by one-quarter of one percent
286.28 	for each month that the member is under normal retirement age at
286.29 	the time of retirement except that for any member who has 30 or
286.30 	more years of allowable service credit, the reduction shall be
286.31 	applied only for each month that the member is under age 62.
286.32 	(iii) Any member whose attained age plus credited allowable
286.33 	service totals 90 years is entitled, upon application, to a
286.34 	retirement annuity in an amount equal to the normal annuity
286.35 	provided in paragraph (b), without any reduction by reason of
286.36 	early retirement.
287.1 	(d) This paragraph applies to a member who has become at
287.2 	least 55 years old and first became a member of the association
287.3 	after June 30, 1989, and to any other member who has become at
287.4 	least 55 years old and whose annuity amount when calculated
287.5 	under this paragraph and in conjunction with paragraph (e), is
287.6 	higher than it is when calculated under paragraph (b), in
287.7 	conjunction with paragraph (c).  The average salary, as defined
287.8 	in paragraph (a) multiplied by the percent specified by section
287.9 	356.315, subdivision 4, for each year of service for a basic
287.10 	member and by the percent specified in section 356.315,
287.11 	subdivision 2, for each year of service for a coordinated member
287.12 	shall determine the amount of the retirement annuity to which
287.13 	the member is entitled.
287.14 	(e) This paragraph applies to a person who has become at
287.15 	least 55 years old and first becomes a member of the association
287.16 	after June 30, 1989, and to any other member who has become at
287.17 	least 55 years old and whose annuity is higher when calculated
287.18 	under paragraph (d) in conjunction with this paragraph than when
287.19 	calculated under paragraph (b), in conjunction with paragraph
287.20 	(c).  An employee who retires under the formula annuity before
287.21 	the normal retirement age shall be paid the normal annuity
287.22 	provided in paragraph (d) reduced so that the reduced annuity is
287.23 	the actuarial equivalent of the annuity that would be payable to
287.24 	the employee if the employee deferred receipt of the annuity and
287.25 	the annuity amount were augmented at an annual rate of three
287.26 	percent compounded annually from the day the annuity begins to
287.27 	accrue until the normal retirement age if the employee became an
287.28 	employee before July 1, 2005, and is the actuarial equivalent of
287.29 	the annuity that would be payable to the employee if the
287.30 	employee initially became a member after June 30, 2005.
287.31 	(f) No retirement annuity is payable to a former employee
287.32 	with a salary that exceeds 95 percent of the governor's salary
287.33 	unless and until the salary figures used in computing the
287.34 	highest five successive years average salary under paragraph (a)
287.35 	have been audited by the Teachers Retirement Association and
287.36 	determined by the executive director to comply with the
288.1 	requirements and limitations of section 354.05, subdivisions 35
288.2 	and 35a.

288.3 	Sec. 8. Minnesota Statutes 2004, section 354.55,
288.4 	subdivision 11, is amended to read:
288.5 		Subd. 11.Deferred annuity; augmentation.  (a) Any person
288.6 	covered under section 354.44, subdivision 6, who ceases to
288.7 	render teaching service, may leave the person's accumulated
288.8 	deductions in the fund for the purpose of receiving a deferred
288.9 	annuity at retirement.  Eligibility for an annuity under this
288.10 	subdivision is governed pursuant to section 354.44, subdivision
288.11 	1, or 354.60.
288.12 	(b) The amount of the deferred retirement annuity is
288.13 	determined by section 354.44, subdivision 6, and augmented as
288.14 	provided in this subdivision.  The required reserves related to
288.15 	that portion of the annuity which had accrued when the member
288.16 	ceased to render teaching service must be augmented by interest
288.17 	compounded annually from the first day of the month following
288.18 	the month during which the member ceased to render teaching
288.19 	service to the effective date of retirement.  There shall be no
288.20 	augmentation if this period is less than three months or if this
288.21 	period commences prior to July 1, 1971. If the member became a
288.22 	member before July 1, 2005,the rates of interest used for this
288.23 	purpose must be five percent compounded annually commencing July
288.24 	1, 1971, until January 1, 1981, and three percent compounded
288.25 	annually thereafter until January 1 of the year following the
288.26 	year in which the former member attains age 55.  From that date
288.27 	to the effective date of retirement, the rate is five percent
288.28 	compounded annually.  If a person has more than one period of
288.29 	uninterrupted service, a separate average salary determined
288.30 	under section 354.44, subdivision 6, must be used for each
288.31 	period and the required reserves related to each period must be
288.32 	augmented by interest pursuant to this subdivision.  The sum of
288.33 	the augmented required reserves so determined shall be the basis
288.34 	for purchasing the deferred annuity.  If a person repays a
288.35 	refund, the service restored by the repayment must be considered
288.36 	as continuous with the next period of service for which the
289.1 	person has credit with this fund.  If a person does not render
289.2 	teaching service in any one fiscal year or more consecutive
289.3 	fiscal years and then resumes teaching service, the formula
289.4 	percentages used from the date of the resumption of teaching
289.5 	service must be those applicable to new members.  The mortality
289.6 	table and interest assumption used to compute the annuity must
289.7 	be the applicable mortality table established by the board under
289.8 	section 354.07, subdivision 1, and the interest rate assumption
289.9 	under section 356.215 in effect when the member retires.  A
289.10 	period of uninterrupted service for the purposes of this
289.11 	subdivision means a period of covered teaching service during
289.12 	which the member has not been separated from active service for
289.13 	more than one fiscal year.
289.14 	(c) In no case shall the annuity payable under this
289.15 	subdivision be less than the amount of annuity payable pursuant
289.16 	to section 354.44, subdivision 6. If the member initially
289.17 	became a member after June 30, 2005, no augmentation is payable
289.18 	on a deferred annuity.
289.19 	(d) The requirements and provisions for retirement before
289.20 	normal retirement age contained in section 354.44, subdivision
289.21 	6, clause (3) or (5), shall also apply to an employee fulfilling
289.22 	the requirements with a combination of service as provided in
289.23 	section 354.60.
289.24 	(e) The augmentation provided by this subdivision applies
289.25 	to the benefit provided in section 354.46, subdivision 2.
289.26 	(f) The augmentation provided by this subdivision shall not
289.27 	apply to any period in which a person is on an approved leave of
289.28 	absence from an employer unit covered by the provisions of this
289.29 	chapter.
289.30 	(g) The retirement annuity or disability benefit of, or the
289.31 	survivor benefit payable on behalf of, a former teacher who
289.32 	terminated service before July 1, 1997, which is not first
289.33 	payable until after June 30, 1997, must be increased on an
289.34 	actuarial equivalent basis to reflect the change in the
289.35 	postretirement interest rate actuarial assumption under section
289.36 	356.215, subdivision 8, from five percent to six percent under a
290.1 	calculation procedure and tables adopted by the board as
290.2 	recommended by an approved actuary and approved by the actuary
290.3 	retained by the Legislative Commission on Pensions and
290.4 	Retirement.

290.5 	Sec. 9. Minnesota Statutes 2004, section 354A.31,
290.6 	subdivision 7, is amended to read:
290.7 		Subd. 7.Actuarial reduction for early retirement.  This
290.8 	subdivision applies to a person who has become at least 55 years
290.9 	old and first becomes a coordinated member after June 30, 1989,
290.10 	and to any other coordinated member who has become at least 55
290.11 	years old and whose annuity is higher when calculated using the
290.12 	retirement annuity formula percentage in subdivision 4,
290.13 	paragraph (d), and subdivision 4a, paragraph (d), in conjunction
290.14 	with this subdivision than when calculated under subdivision 4,
290.15 	paragraph (c), or subdivision 4a, paragraph (c), in conjunction
290.16 	with subdivision 6.  A coordinated member who retires before the
290.17 	full benefit age shall be paid the retirement annuity calculated
290.18 	using the retirement annuity formula percentage in subdivision
290.19 	4, paragraph (d), or subdivision 4a, paragraph (d), reduced so
290.20 	that the reduced annuity is the actuarial equivalent of the
290.21 	annuity that would be payable to the member if the member
290.22 	deferred receipt of the annuity and the annuity amount were
290.23 	augmented at an annual rate of three percent compounded annually
290.24 	from the day the annuity begins to accrue until the normal
290.25 	retirement age if the member became a member before July 1,
290.26 	2005, and is the actuarial equivalent of the annuity that would
290.27 	be payable to the member if the member initially became a member
290.28 	after June 30, 2005.

290.29 	Sec. 10. Minnesota Statutes 2004, section 354A.37,
290.30 	subdivision 2, is amended to read:
290.31 		Subd. 2.Eligibility for deferred retirement annuity.
 290.32 	(a) Any coordinated member who ceases to render teaching
290.33 	services for the school district in which the teachers
290.34 	retirement fund association is located, with sufficient
290.35 	allowable service credit to meet the minimum service
290.36 	requirements specified in section 354A.31, subdivision 1, shall
291.1 	be entitled to a deferred retirement annuity in lieu of a refund
291.2 	pursuant to subdivision 1.  The deferred retirement annuity
291.3 	shall be computed pursuant to section 354A.31 and shall be
291.4 	augmented as provided in this subdivision.  The deferred annuity
291.5 	shall commence upon application after the person on deferred
291.6 	status attains at least the minimum age specified in section
291.7 	354A.31, subdivision 1.
291.8 	(b) If the coordinated member became a member before July
291.9 	1, 2005,the monthly annuity amount that had accrued when the
291.10 	member ceased to render teaching service must be augmented from
291.11 	the first day of the month following the month during which the
291.12 	member ceased to render teaching service to the effective date
291.13 	of retirement.  There is no augmentation if this period is less
291.14 	than three months.  The rate of augmentation is three percent
291.15 	compounded annually until January 1 of the year following the
291.16 	year in which the former member attains age 55, and five percent
291.17 	compounded annually after that date to the effective date of
291.18 	retirement.  If a person has more than one period of
291.19 	uninterrupted service, a separate average salary determined
291.20 	under section 354A.31 must be used for each period, and the
291.21 	monthly annuity amount related to each period must be augmented
291.22 	as provided in this subdivision.  The sum of the augmented
291.23 	monthly annuity amounts determines the total deferred annuity
291.24 	payable.  If a person repays a refund, the service restored by
291.25 	the repayment must be considered as continuous with the next
291.26 	period of service for which the person has credit with the
291.27 	fund.  If a person does not render teaching services in any one
291.28 	fiscal year or more consecutive fiscal years and then resumes
291.29 	teaching service, the formula percentages used from the date of
291.30 	resumption of teaching service are those applicable to new
291.31 	members.  The mortality table and interest assumption used to
291.32 	compute the annuity are the table established by the fund to
291.33 	compute other annuities, and the interest assumption under
291.34 	section 356.215 in effect when the member retires.  A period of
291.35 	uninterrupted service for the purpose of this subdivision means
291.36 	a period of covered teaching service during which the member has
292.1 	not been separated from active service for more than one fiscal
292.2 	year.  The augmentation provided by this subdivision applies to
292.3 	the benefit provided in section 354A.35, subdivision 2.  The
292.4 	augmentation provided by this subdivision does not apply to any
292.5 	period in which a person is on an approved leave of absence from
292.6 	an employer unit.
292.7 	(c) If the coordinated member initially became a member
292.8 	after June 30, 2005, no augmentation is payable on a deferred
292.9 	annuity.

292.10 	Sec. 11. Minnesota Statutes 2004, section 356.30,
292.11 	subdivision 1, is amended to read:
292.12 		Subdivision 1.Eligibility; computation of annuity.  (a)
292.13 	Notwithstanding any provisions of the laws governing the
292.14 	retirement plans enumerated in subdivision 3, a person who has
292.15 	met the qualifications of paragraph (b) may elect to receive a
292.16 	retirement annuity from each enumerated retirement plan in which
292.17 	the person has at least one-half year of allowable service,
292.18 	based on the allowable service in each plan, subject to the
292.19 	provisions of paragraph (c).
292.20 	(b) A person may receive, upon retirement, a retirement
292.21 	annuity from each enumerated retirement plan in which the person
292.22 	has at least one-half year of allowable service, and, if the
292.23 	person was a member of a covered retirement plan on or before
292.24 	July 1, 2005,augmentation of a deferred annuity calculated
292.25 	under the laws governing each public pension plan or fund named
292.26 	in subdivision 3, from the date the person terminated all public
292.27 	service if:
292.28 	(1) the person has allowable service totaling an amount
292.29 	that allows the person to receive an annuity in any two or more
292.30 	of the enumerated plans; and
292.31 	(2) the person has not begun to receive an annuity from any
292.32 	enumerated plan or the person has made application for benefits
292.33 	from each applicable plan and the effective dates of the
292.34 	retirement annuity with each plan under which the person chooses
292.35 	to receive an annuity are within a one-year period.
292.36 	(c) The retirement annuity from each plan must be based
293.1 	upon the allowable service, accrual rates, and average salary in
293.2 	the applicable plan except as further specified or modified in
293.3 	the following clauses:
293.4 	(1) the laws governing annuities must be the law in effect
293.5 	on the date of termination from the last period of public
293.6 	service under a covered retirement plan with which the person
293.7 	earned a minimum of one-half year of allowable service credit
293.8 	during that employment;
293.9 	(2) the "average salary" on which the annuity from each
293.10 	covered plan in which the employee has credit in a formula plan
293.11 	must be based on the employee's highest five successive years of
293.12 	covered salary during the entire service in covered plans;
293.13 	(3) the accrual rates to be used by each plan must be those
293.14 	percentages prescribed by each plan's formula as continued for
293.15 	the respective years of allowable service from one plan to the
293.16 	next, recognizing all previous allowable service with the other
293.17 	covered plans;
293.18 	(4) the allowable service in all the plans must be combined
293.19 	in determining eligibility for and the application of each
293.20 	plan's provisions in respect to reduction in the annuity amount
293.21 	for retirement prior to normal retirement age; and
293.22 	(5) the annuity amount payable for any allowable service
293.23 	under a nonformula plan of a covered plan must not be affected,
293.24 	but such service and covered salary must be used in the above
293.25 	calculation.
293.26 	(d) This section does not apply to any person whose final
293.27 	termination from the last public service under a covered plan
293.28 	was before May 1, 1975.
293.29 	(e) For the purpose of computing annuities under this
293.30 	section, the accrual rates used by any covered plan, except the
293.31 	public employees police and fire plan, the judges' retirement
293.32 	fund, and the State Patrol retirement plan, must not exceed the
293.33 	percent specified in section 356.315, subdivision 4, per year of
293.34 	service for any year of service or fraction thereof.  The
293.35 	formula percentage used by the judges' retirement fund must not
293.36 	exceed the percentage rate specified in section 356.315,
294.1 	subdivision 8, per year of service for any year of service or
294.2 	fraction thereof.  The accrual rate used by the public employees
294.3 	police and fire plan and the State Patrol retirement plan must
294.4 	not exceed the percentage rate specified in section 356.315,
294.5 	subdivision 6, per year of service for any year of service or
294.6 	fraction thereof.  The accrual rate or rates used by the
294.7 	legislators retirement plan and the elective state officers
294.8 	retirement plan must not exceed 2.5 percent, but this limit does
294.9 	not apply to the adjustment provided under section 3A.02,
294.10 	subdivision 1, paragraph (c), or 352C.031, paragraph (b).
294.11 	(f) Any period of time for which a person has credit in
294.12 	more than one of the covered plans must be used only once for
294.13 	the purpose of determining total allowable service.
294.14 	(g) If the period of duplicated service credit is more than
294.15 	one-half year, or the person has credit for more than one-half
294.16 	year, with each of the plans, each plan must apply its formula
294.17 	to a prorated service credit for the period of duplicated
294.18 	service based on a fraction of the salary on which deductions
294.19 	were paid to that fund for the period divided by the total
294.20 	salary on which deductions were paid to all plans for the period.
294.21 	(h) If the period of duplicated service credit is less than
294.22 	one-half year, or when added to other service credit with that
294.23 	plan is less than one-half year, the service credit must be
294.24 	ignored and a refund of contributions made to the person in
294.25 	accord with that plan's refund provisions.

294.26 	Sec. 12. EFFECTIVE DATE.
 294.27 	Sections 1 to 11 are effective on July 1, 2005.

294.28 	ARTICLE 20
294.29 	EARLY RETIREMENT INCENTIVES

294.30 	Section 1. EARLY RETIREMENT INCENTIVE.
 294.31 		Subdivision 1.Eligibility. An appointing authority in
294.32 	the executive or legislative branch of state government or the
294.33 	Board of Public Defense or the Minnesota Historical Society or
294.34 	any school district may offer the early retirement incentive in
294.35 	this section to an employee who:
294.36 	(1) has at least five years of allowable service in one or
295.1 	more of the funds listed in Minnesota Statutes, section 356.30,
295.2 	subdivision 3, or has at least five years of coverage by the
295.3 	individual retirement account plan governed by Minnesota
295.4 	Statutes, chapter 354B, and upon retirement is immediately
295.5 	eligible for a retirement annuity or benefit from one or more of
295.6 	these funds; and 
295.7 	(2) terminates state or teaching service after the
295.8 	effective date of this section and before September 1, 2005.
295.9 		Subd. 2.Incentive. (a) For an employee eligible under
295.10 	subdivision 1, the employer may provide an amount up to $17,000,
295.11 	to be used:
295.12 	(1) for an employee who terminates state service after the
295.13 	effective date of this section and on or before July 15, 2005,
295.14 	for deposit in the employee's account in the health care savings
295.15 	plan established by Minnesota Statutes, section 352.98; or 
295.16 	(2) for an employee who terminates state service after July
295.17 	15, 2005, and before September 1, 2005:
295.18 	(i) notwithstanding Minnesota Statutes, section 352.01,
295.19 	subdivision 11, or 354.05, subdivision 13, whichever applies,
295.20 	for purchase of service credit for unperformed service
295.21 	sufficient to enable the employee to retire under Minnesota
295.22 	Statutes, section 352.116, subdivision 1, paragraph (b); 353.30;
295.23 	or 354.44, subdivision 6, paragraph (b), whichever applies; or 
295.24 	(ii) for purchase of a lifetime annuity or annuity for a
295.25 	specific number of years from the state unclassified retirement
295.26 	program to provide additional benefits under Minnesota Statutes,
295.27 	section 352D.06, subdivision 1.
295.28 	(b) An employee is eligible for the payment under paragraph
295.29 	(a), clause (2), item (i), if the employee uses money from a
295.30 	deferred compensation account that, combined with the payment
295.31 	under paragraph (a), clause (2), item (i), would be sufficient
295.32 	to purchase enough service credit to qualify for retirement
295.33 	under Minnesota Statutes, section 352.116, subdivision 1,
295.34 	paragraph (b); 353.30, subdivision 1a; or 354.44, subdivision 6,
295.35 	paragraph (b), whichever applies.
295.36 		Subd. 3.Designation of positions; employer
296.1 	discretion. Before offering an incentive under this section, an
296.2 	appointing authority must designate the job classifications or
296.3 	positions within job classifications that qualify for the
296.4 	incentive.  The appointing authority may modify this designation
296.5 	at any time.  Designation of positions eligible for the
296.6 	incentive under this section, participation of individual
296.7 	employees, and the amount of the payment under this section are
296.8 	at the sole discretion of the appointing authority.  Unilateral
296.9 	implementation of this section by the employer is not an unfair
296.10 	labor practice under Minnesota Statutes, chapter 179A.

296.11 	Sec. 2. POSTRETIREMENT EMPLOYMENT.
 296.12 	(a) This section applies to a state employee who:
296.13 	(1) on the effective date of this section is regularly
296.14 	scheduled to work 1,044 or more hours a year in a position
296.15 	covered by the Minnesota state retirement system general
296.16 	employees retirement plan, correctional plan, or unclassified
296.17 	plan;
296.18 	(2) enters into an agreement with the appointing authority
296.19 	to work a reduced schedule that is both (i) a reduction of at
296.20 	least 25 percent from the number of regularly scheduled work
296.21 	hours; and (ii) 1,044 hours or less in the covered position; and 
296.22 	(3) at the time of entering into the agreement under clause
296.23 	(2), meets the age and service requirements necessary to receive
296.24 	an unreduced retirement benefit from the plan.
296.25 	(b) Notwithstanding any law to the contrary, for service
296.26 	under an agreement entered into under paragraph (a), an employee:
296.27 	(1) may receive a retirement annuity from the plan without
296.28 	separating from state service; and 
296.29 	(2) is not subject to the cessation of annuity provisions
296.30 	in Minnesota Statutes, section 352.115, subdivision 10.
296.31 	(c) The amount of hours worked, the work schedule, and the
296.32 	duration of the phased retirement employment must be mutually
296.33 	agreed to by the employee and the appointing authority.  The
296.34 	appointing authority may not require a person to waive any
296.35 	rights under a collective bargaining agreement as a condition of
296.36 	participation under this section.  The appointing authority has
297.1 	sole discretion to determine if and the extent to which phased
297.2 	retirement under this section is available to an employee.  Upon
297.3 	expiration of an agreement entered into under this section, the
297.4 	appointing authority must restore the position to its status
297.5 	prior to the agreement.
297.6 	(d) Notwithstanding any law to the contrary, a person may
297.7 	not earn service credit in the Minnesota state retirement system
297.8 	for employment covered under this section, and employer
297.9 	contributions and payroll deductions for the retirement fund
297.10 	must not be made based on earnings of a person working under
297.11 	this section.  No change shall be made to a monthly annuity or
297.12 	retirement allowance based on employment under this section.
297.13 	(e) A person who works under this section is a member of
297.14 	the appropriate bargaining unit; is covered by the appropriate
297.15 	collective bargaining contract or compensation plan; and is
297.16 	eligible for health care coverage as provided in the collective
297.17 	bargaining contract or compensation plan.
297.18 	(f) An agreement under this section may apply only to work
297.19 	through June 30, 2007.

297.20 	Sec. 3. VOLUNTARY HOUR REDUCTION PLAN.
 297.21 	(a) This section applies to a state employee who:
297.22 	(1) on the effective date of this section is regularly
297.23 	scheduled to work 1,044 or more hours a year in a position
297.24 	covered by a pension plan administered by the Minnesota state
297.25 	retirement system; and 
297.26 	(2) enters into an agreement with the appointing authority
297.27 	to work a reduced schedule of 1,044 hours or less in the covered
297.28 	position.
297.29 	(b) Notwithstanding any law to the contrary, for service
297.30 	under an agreement entered into under paragraph (a),
297.31 	contributions may be made to the applicable plan of the
297.32 	Minnesota state retirement system as if the employee had not
297.33 	reduced hours.  The employee must pay the additional employee
297.34 	contributions and the employer must pay the additional employer
297.35 	contributions necessary to bring the service credit and salary
297.36 	up to the level prior to the voluntary reduction in hours.
298.1 	Contributions must be made in a time and manner prescribed by
298.2 	the executive director of the Minnesota state retirement system.
298.3 	(c) The amount of hours worked, the work schedule, and the
298.4 	duration of the voluntary hour reduction must be mutually agreed
298.5 	to by the employee and the appointing authority.  The appointing
298.6 	authority may not require a person to waive any rights under a
298.7 	collective bargaining agreement as a condition of participation
298.8 	under this section.  The appointing authority has sole
298.9 	discretion to determine if and the extent to which voluntary
298.10 	hour reduction under this section is available to an employee.
298.11 	(d) A person who works under this section is a member of
298.12 	the appropriate bargaining unit; is covered by the appropriate
298.13 	collective bargaining contract or compensation plan; and is
298.14 	eligible for health care coverage as provided in the collective
298.15 	bargaining contract or compensation plan.
298.16 	(e) An agreement under this section may apply only to work
298.17 	through June 30, 2007.

298.18 	Sec. 4. VOLUNTARY UNPAID LEAVE OF ABSENCE.
 298.19 	Appointing authorities in state government may allow each
298.20 	employee to take unpaid leaves of absence for up to 1,044 hours
298.21 	between June 1, 2005, and June 30, 2007.  Each appointing
298.22 	authority approving such a leave shall allow the employee to
298.23 	continue accruing vacation and sick leave, be eligible for paid
298.24 	holidays and insurance benefits, accrue seniority, and accrue
298.25 	service credit and credited salary in the state retirement plans
298.26 	as if the employee had actually been employed during the time of
298.27 	leave.  An employee covered by the unclassified plan may
298.28 	voluntarily make both the employee and employer contributions to
298.29 	the unclassified plan during the leave of absence.  For
298.30 	employees covered by another retirement plan administered by the
298.31 	Minnesota State Retirement System, the employee must pay the
298.32 	additional employee contributions and the employer must pay the
298.33 	additional employer contributions necessary to bring the service
298.34 	credit and salary credit up to the level prior to the voluntary
298.35 	reduction in hours.  Contributions must be made at a time and in
298.36 	a manner prescribed by the executive director of the Minnesota
299.1 	State Retirement System.  If the leave of absence is for one
299.2 	full pay period or longer, any holiday pay shall be included in
299.3 	the first payroll warrant after return from the leave of
299.4 	absence.  The appointing authority shall attempt to grant
299.5 	requests for the unpaid leaves of absence consistent with the
299.6 	need to continue efficient operation of the agency.  However,
299.7 	each appointing authority shall retain discretion to grant or
299.8 	refuse to grant requests for leaves of absence and to schedule
299.9 	and cancel leaves, subject to the applicable provisions of
299.10 	collective bargaining agreements and compensation plans.

299.11 	Sec. 5. RELATIONSHIP OF SECTIONS.
 299.12 	(a) An employee covered by a phased retirement agreement
299.13 	under section 2 may not be covered by the voluntary hour
299.14 	reduction provisions of section 3 or by a voluntary unpaid leave
299.15 	of absence agreement under section 4 during the same time period
299.16 	or any later time period.
299.17 	(b) An employee covered by the voluntary hour reduction
299.18 	provisions of section 3:
299.19 	(1) may not be covered by a phased retirement agreement
299.20 	under section 2 during the same time period, but may be covered
299.21 	by a phased retirement agreement under section 2 during a later
299.22 	time period; and 
299.23 	(2) may be covered by the voluntary leave of absence
299.24 	provision of section 4 during an earlier or later time period.
299.25 	(c) An employee may receive the early retirement incentive
299.26 	in section 1 after being covered under section 2, 3, or 4.  An
299.27 	employee who receives an incentive under section 1 may not later
299.28 	be covered by section 2, 3, or 4.

299.29 	Sec. 6. EFFECTIVE DATE.
 299.30 	Sections 1 to 5 are effective the day following final
299.31 	enactment.