Bill Text: MN HF1951 | 2013-2014 | 88th Legislature | Engrossed

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Bill Title: Omnibus pensions and retirement bill.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Passed) 2014-05-21 - Secretary of State Chapter 296 [HF1951 Detail]

Download: Minnesota-2013-HF1951-Engrossed.html

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A bill for an act

relating to retirement; various Minnesota public employee retirement plans;
allowing MSRS-General deferred members to vote in board elections;
continuing Stevens County Housing and Redevelopment Authority employees
in PERA-General; excluding fixed-route bus drivers employed by the St.
Cloud Metropolitan Transit Commission from PERA-General coverage;
increasing member and employer contribution rates for certain retirement
plans; providing for the consolidation of the Duluth Teachers Retirement Fund
Association retirement plan and fund into the statewide Teachers Retirement
Association; revising an amortization target date, creating new state aid
programs; appropriating money; extending a MnSCU early retirement incentive
program; increasing the limit for certain reemployed MnSCU retirees; extending
the applicability of a second chance at tenure retirement coverage election
opportunity for MnSCU faculty members; revising investment authority for
various defined contribution plans or programs; authorizing the State Board of
Investment to revise, remove, or create investment options for the Minnesota
supplemental investment fund; expanding permissible investments under the
unclassified state employees retirement program, the public employees defined
contribution plan, the deferred compensation program, and the health care savings
plan; revising salary reporting requirements; clarifying retirement provision
applications to sheriffs; revising local government postretirement option program
requirements and extending expiration date; clarifying future postretirement
adjustment rates for former members of the former Minneapolis Firefighters
Relief Association and the former Minneapolis Police Relief Association; making
technical changes to amortization state aid and supplemental state aid; clarifying
the eligibility of independent nonprofit firefighting corporations to receive police
and fire supplemental retirement state aid; implementing the recommendations
of the 2013-2014 state auditor volunteer fire working group; modifying the
disability benefit application deadline for certain former Wadena County sheriff's
deputies; authorizing city of Duluth and Duluth Airports Authority employee
salary-supplement payments coverage following Court of Appeals decision;
specifying interest rate for computing joint and survivor annuities; revising
postretirement adjustment triggers; revising reemployed annuitant withholding in
certain divorce situations; clarifying medical advisor and resumption of teaching
provisions; specifying explicit postretirement adjustment assumptions; allowing
volunteer firefighter relief associations to pay state fire chiefs association dues
from the special fund; authorizing MnSCU employee to elect TRA coverage and
transfer past service from IRAP to TRA; clarifying the applicability of 2013
postretirement adjustment modifications to certain county sheriffs; ratifying or
grandparenting MSRS-Correctional plan coverage for Department of Human
Services employees; allowing various service credit purchases; requiring a
PERA report on certain survivor benefit amounts;amending Minnesota Statutes
2012, sections 3A.01, subdivision 1a; 11A.17, subdivisions 1, 9; 13.632,
subdivision 1; 122A.18, subdivision 7a; 136F.481; 352.01, subdivisions 2b,
12; 352.03, subdivision 1, by adding a subdivision; 352.04, subdivisions 2,
3; 352.115, subdivisions 8, 10; 352.1155, subdivisions 1, 4; 352.90; 352.91,
subdivisions 1, 2, 3c, 3d, 3e, 3f, by adding a subdivision; 352.92, subdivisions
1, 2; 352.965, subdivision 4, by adding subdivisions; 352.98, subdivision 2;
352B.08, subdivision 3; 352D.04, by adding subdivisions; 353.01, subdivision
14; 353.27, subdivisions 2, 3, 3b, 4, by adding a subdivision; 353.30, subdivision
3; 353.37, by adding a subdivision; 353.371, by adding a subdivision; 353.6511,
subdivision 7; 353.6512, subdivision 7; 353D.05, subdivision 1, by adding a
subdivision; 354.05, subdivisions 2, 7, 13; 354.42, subdivisions 2, 3; 354.44,
subdivision 5; 354.445; 354.48, subdivision 6a; 354A.011, subdivisions 11, 15a,
27; 354A.021, subdivision 1; 354A.092; 354A.093, subdivision 1; 354A.096;
354A.12, subdivision 2; 354A.29, subdivision 8; 354A.31, subdivisions 1,
3a; 354A.32, subdivision 1; 354A.35, subdivision 1; 354A.37, subdivisions
3, 4; 354A.39; 354A.41; 354B.21, subdivisions 2, 3a; 355.01, subdivision
2c; 356.215, subdivision 11; 356.24, subdivision 1; 356.302, subdivision
7; 356.303, subdivision 4; 356.32, subdivision 2; 356.415, subdivision 1d;
356.42, subdivision 3; 356.465, subdivision 3; 356.47, subdivision 3; 356.635,
subdivision 6; 356.99, subdivision 1; 356A.06, subdivisions 7, 7a; 424A.015,
by adding a subdivision; 424A.016, subdivisions 4, 7; 424A.05, subdivision
3; 424A.08; 424B.12; 490.121, subdivision 2a; Minnesota Statutes 2013
Supplement, sections 69.051, subdivisions 1a, 3; 352.01, subdivision 2a; 352.03,
subdivision 4; 353.01, subdivisions 2a, 2b; 353.651, subdivision 4; 354.436;
354.44, subdivision 6; 354A.12, subdivisions 1, 2a, 3a, 3c; 354A.27, subdivision
6a; 356.20, subdivision 2; 356.214, subdivision 1; 356.215, subdivision 8;
356.219, subdivision 8; 356.30, subdivision 3; 356.401, subdivision 3; 356.415,
subdivisions 1a, 1c, 1e, 1f; 356.91; 363A.36, subdivision 1; 423A.02, subdivision
3; 423A.022, subdivisions 2, 3; 424A.016, subdivision 6; 424A.02, subdivisions
3, 7; 424A.092, subdivision 6; 424A.093, subdivisions 2, 6; 424A.094,
subdivision 2; 424A.10, subdivision 2; Laws 2009, chapter 169, article 5,
section 2, as amended; article 6, section 1; proposing coding for new law in
Minnesota Statutes, chapters 354; 354A; 356; repealing Minnesota Statutes 2012,
sections 11A.17, subdivision 4; 352.965, subdivision 5; 352D.04, subdivision 1;
353D.05, subdivision 2; 354A.021, subdivision 5; 354A.108; 354A.24; 354A.27,
subdivision 5; 356.415, subdivision 3; Minnesota Statutes 2013 Supplement,
sections 354A.27, subdivisions 6a, 7; 354A.31, subdivision 4a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

RETIREMENT PLAN MEMBERSHIP INCLUSIONS AND EXCLUSIONS

    Section 1. Minnesota Statutes 2013 Supplement, section 352.01, subdivision 2a,
is amended to read:
    Subd. 2a. Included employees. (a) "State employee" includes:
    (1) employees of the Minnesota Historical Society;
    (2) employees of the State Horticultural Society;
    (3) employees of the Minnesota Crop Improvement Association;
    (4) employees of the adjutant general whose salaries are paid from federal funds and
who are not covered by any federal civilian employees retirement system;
    (5) employees of the Minnesota State Colleges and Universities who are employed
under the university or college activities program;
    (6) currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently contributing
employee employed for any special service as defined in subdivision 2b, clause (8);
    (7) employees of the legislature who are appointed without a limit on the duration
of their employment and persons employed or designated by the legislature or by a
legislative committee or commission or other competent authority to conduct a special
inquiry, investigation, examination, or installation;
    (8) trainees who are employed on a full-time established training program
performing the duties of the classified position for which they will be eligible to receive
immediate appointment at the completion of the training period;
    (9) employees of the Minnesota Safety Council;
    (10) any employees who are on authorized leave of absence from the Transit
Operating Division of the former Metropolitan Transit Commission and who are employed
by the labor organization which is the exclusive bargaining agent representing employees
of the Transit Operating Division;
    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito
Control Commission unless excluded under subdivision 2b or are covered by another
public pension fund or plan under section 473.415, subdivision 3;
    (12) judges of the Tax Court;
    (13) personnel who were employed on June 30, 1992, by the University of
Minnesota in the management, operation, or maintenance of its heating plant facilities,
whose employment transfers to an employer assuming operation of the heating plant
facilities, so long as the person is employed at the University of Minnesota heating plant
by that employer or by its successor organization;
    (14) personnel who are employed as seasonal employees in the classified or
unclassified service;
    (15) persons who are employed by the Department of Commerce as a peace officer
in the Commerce Fraud Bureau under section 45.0135 who have attained the mandatory
retirement age specified in section 43A.34, subdivision 4;
    (16) employees of the University of Minnesota unless excluded under subdivision
2b, clause (3);
    (17) employees of the Middle Management Association whose employment began
after July 1, 2007, and to whom section 352.029 does not apply;
    (18) employees of the Minnesota Government Engineers Council to whom section
352.029 does not apply;
(19) employees of the Minnesota Sports Facilities Authority; and
(20) employees of the Minnesota Association of Professional Employees.;
(21) employees of the Minnesota State Retirement System;
(22) employees of the State Agricultural Society;
(23) employees of the Gillette Children's Hospital Board who were employed in the
state unclassified service at the former Gillette Children's Hospital on March 28, 1974; and
(24) if approved for coverage by the Board of Directors of Conservation Corps
Minnesota, employees of Conservation Corps Minnesota so employed on June 30, 2003.
    (b) Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the
amounts required by section 352.04. Employee contributions must be deducted from
salary. Employer contributions are the sole obligation of the employer assuming operation
of the University of Minnesota heating plant facilities or any successor organizations to
that employer.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 2. Minnesota Statutes 2012, section 352.01, subdivision 2b, is amended to read:
    Subd. 2b. Excluded employees. "State employee" does not include:
    (1) persons who are:
    (i) students who are employed by the University of Minnesota, or within the
Minnesota State Colleges and Universities system, unless approved for coverage by
the Board of Regents of the University of Minnesota or the Board of Trustees of the
Minnesota State Colleges and Universities, whichever is applicable applies;
(ii) employed as interns for a period not to exceed six months unless included under
subdivision 2a, paragraph (a), clause (8);
(iii) employed as trainee employees unless included under subdivision 2a, paragraph
(a), clause (8); or
(iv) employed in the student worker classification as designated by Minnesota
Management and Budget;
    (2) employees who are:
    (i) eligible for membership in the state Teachers Retirement Association, except
employees unless the person is an employee of the Department of Education who have
chosen or may choose elected to be covered by the general state employees retirement plan
of the Minnesota State Retirement System instead of the Teachers Retirement Association;
    (ii) employees of the state who, in any year, were credited with 12 months of
allowable service as a public school teacher and, as such, are members of a retirement plan
governed by chapter 354 or 354A unless the employment is incidental employment as a
state employee that is not covered by a retirement plan governed by chapter 354 or 354A;
    (iii) employees of the state who are employed by the Board of Trustees of the
Minnesota State Colleges and Universities in an unclassified position that is listed in
section 43A.08, subdivision 1, clause (9);
    (iv) persons employed by the Board of Trustees of the Minnesota State Colleges and
Universities who elected retirement coverage other than by the general state employees
retirement plan of the Minnesota State Retirement System under Minnesota Statutes
1994, section 136C.75;
    (v) officers or enlisted personnel in the National Guard or in the naval militia who
are assigned to permanent peacetime duty and who are or are required to be members of a
federal retirement system under federal law;
    (vi) persons employed by the Department of Military Affairs as full-time firefighters
and who, as such, are members of the public employees police and fire retirement plan;
    (vii) members of the State Patrol retirement plan under section 352B.011,
subdivision 10;
    (viii) off-duty police officers while employed by the Metropolitan Council and
persons employed as full-time police officers by the Metropolitan Council and who, as
such, are members of the public employees police and fire retirement plan; and
    (ix) employees of the state who have elected to transfer account balances derived
from state service to the unclassified state employees retirement program under section
352D.02, subdivision 1d;
    (3) employees of the University of Minnesota who are excluded from coverage by
action of the Board of Regents;
    (4) officers and enlisted personnel in the National Guard and the naval militia who
are assigned to permanent peacetime duty and who under federal law are or are required to
be members of a federal retirement system;
    (5) (4) election officers judges and persons who are employed solely to administer
elections;
    (6) (5) persons who are:
    (i) engaged in public work for the state but who are employed by contractors when the
performance of the contract is authorized by the legislature or other competent authority;
    (7) officers and employees of the senate, or of the house of representatives, or of a
legislative committee or commission who are temporarily employed;
(ii) employed to perform professional services where the service is incidental to the
person's regular professional duties and where compensation is paid on a per diem basis; or
(iii) compensated on a fee payment basis or as an independent contractor;
(6) persons who are employed:
(i) on a temporary basis by the house of representatives, the senate, or a legislative
commission or agency under the jurisdiction of the Legislative Coordinating Commission;
(ii) as a temporary employee on or after July 1 for a period ending on or before
October 15 of that calendar year for the Minnesota State Agricultural Society or the
Minnesota State Fair, or as an employee at any time for a special event held on the
fairgrounds;
(iii) by the executive branch as a temporary employee in the classified service or
as an executive branch temporary employee in the unclassified service if appointed for a
definite period not to exceed six months, and if employment is less than six months, then
in any 12-month period;
(iv) by the adjutant general if employed on an unlimited intermittent or temporary
basis in the classified service or in the unclassified service for the support of Army or Air
National Guard training facilities;
(v) by a state or federal program for training or rehabilitation as a temporary
employee if employed for a limited period from an area of economic distress and if other
than a skilled or supervisory personnel position or other than a position that has civil
service status covered by the retirement system; and
(vi) by the Metropolitan Council or a statutory board of the Metropolitan Council
where the members of the board are appointed by the Metropolitan Council as a temporary
employee if the appointment does not exceed six months;
    (8) (7) receivers, jurors, notaries public, and court employees who are not in the
judicial branch as defined in section 43A.02, subdivision 25, except referees and adjusters
employed by the Department of Labor and Industry;
    (9) (8) patient and inmate help who perform services in state charitable, penal, and
correctional institutions, including the a Minnesota Veterans Home;
    (10) persons who are employed for professional services where the service is
incidental to their regular professional duties and whose compensation is paid on a per
diem basis;
    (11) (9) employees of the Sibley House Association;
(10) persons who are:
    (12) the (i) members of any state board or commission who serve the state
intermittently and are paid on a per diem basis;, the secretary, secretary-treasurer, and
treasurer of those boards if their compensation is $5,000 or less per year, or, if they are
legally prohibited from serving more than three years;, and the board of managers of the
State Agricultural Society and its treasurer unless the treasurer is also its full-time secretary;
    (13) state troopers and persons who are described in section 352B.011, subdivision
10 , clauses (2) to (8);
    (14) temporary employees of the Minnesota State Fair who are employed on or
after July 1 for a period not to extend beyond October 15 of that year; and persons who
are employed at any time by the state fair administration for special events held on the
fairgrounds;
(ii) examination monitors employed by a department, agency, commission, or board
of the state to conduct examinations that are required by law; or
(iii) appointees serving as a member of a fact-finding commission or an adjustment
panel, an arbitrator, or a labor referee under chapter 179;
    (15) (11) emergency employees who are in the classified service; except that,
but if an emergency employee, within the same pay period, becomes a provisional or
probationary employee on other than a temporary basis, the employee must be considered
a "state employee" retroactively to the beginning of the pay period;
    (16) temporary employees in the classified service, and temporary employees in the
unclassified service who are appointed for a definite period of not more than six months
and who are employed less than six months in any one-year period;
    (17) interns who are hired for six months or less and trainee employees, except
those listed in subdivision 2a, clause (8);
    (18) persons whose compensation is paid on a fee basis or as an independent
contractor;
    (19) state employees who are employed by the Board of Trustees of the Minnesota
State Colleges and Universities in unclassified positions enumerated in section 43A.08,
subdivision 1 , clause (9);
    (20) state employees who in any year have credit for 12 months service as teachers
in the public schools of the state and as teachers are members of the Teachers Retirement
Association or a retirement system in St. Paul, Minneapolis, or Duluth, except for
incidental employment as a state employee that is not covered by one of the teacher
retirement associations or systems;
    (21) employees of the adjutant general who are employed on an unlimited
intermittent or temporary basis in the classified or unclassified service for the support of
Army and Air National Guard training facilities;
    (22) chaplains and nuns (12) persons who are members of a religious order who are
excluded from coverage under the federal Old Age, Survivors, Disability, and Health
Insurance Program for the performance of service as specified in United States Code, title
42, section 410(a)(8)(A), as amended, if no irrevocable election of coverage has been
made under section 3121(r) of the Internal Revenue Code of 1986, as amended through
December 31, 1992;
    (23) examination monitors who are employed by departments, agencies,
commissions, and boards to conduct examinations required by law;
    (24) persons who are appointed to serve as members of fact-finding commissions or
adjustment panels, arbitrators, or labor referees under chapter 179;
    (25) temporary employees who are employed for limited periods under any state or
federal program for training or rehabilitation, including persons who are employed for
limited periods from areas of economic distress, but not including skilled and supervisory
personnel and persons having civil service status covered by the system;
    (26) full-time students who are employed by the Minnesota Historical Society
intermittently during part of the year and full-time during the summer months;
    (27) temporary employees who are appointed for not more than six months, of
the Metropolitan Council and of any of its statutory boards, if the board members are
appointed by the Metropolitan Council;
    (28) persons who are employed in positions designated by the Department of
Management and Budget as student workers;
    (29) (13) members of trades who are employed by the successor to the Metropolitan
Waste Control Commission, who have trade union pension plan coverage under a
collective bargaining agreement, and who are first employed after June 1, 1977;
    (30) off-duty peace officers while employed by the Metropolitan Council;
    (31) persons who are employed as full-time police officers by the Metropolitan
Council and as police officers are members of the public employees police and fire fund;
    (32) persons who are employed as full-time firefighters by the Department of Military
Affairs and as firefighters are members of the public employees police and fire fund;
    (33) (14) foreign citizens who are employed under a work permit of less than three
years, or under an H-1b/JV H-1b visa or a J-1 visa that is initially valid for less than three
years of employment, unless notice of a visa extension is supplied which allows them to
work for three or more years as of the date that the extension is granted and is supplied to
the retirement plan, in which case they are the person is eligible for coverage from the date
extended of the extension; and
    (34) persons who are employed by the Board of Trustees of the Minnesota State
Colleges and Universities and who elected to remain members of the Public Employees
Retirement Association or of the MERF division of the Public Employees Retirement
Association as the successor of the Minneapolis Employees Retirement Fund, whichever
applies, under Minnesota Statutes 1994, section 136C.75; and
(35) employees who have elected to transfer service to the unclassified program
under section 352D.02, subdivision 1d.
(15) reemployed annuitants of the general state employees retirement plan, the
military affairs personnel retirement plan, the transportation department pilots retirement
plan, the state fire marshal employees retirement plan, or the correctional state employees
retirement plan during the course of that reemployment.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 353.01, subdivision 2a, is
amended to read:
    Subd. 2a. Included employees; mandatory membership. (a) Public employees
whose annual salary exceeds $425 in any month from one governmental subdivision is
stipulated in advance to exceed $5,100 if the person is not a school year employee or
$3,800 if the person is a school year employee and who are not specifically excluded under
subdivision 2b or who have not been provided an option to participate under subdivision
2d, whether individually or by action of the governmental subdivision, must participate as
members of the association with retirement coverage by the general employees retirement
plan under this chapter, the public employees police and fire retirement plan under this
chapter, or the local government correctional employees retirement plan under chapter
353E, whichever applies. Membership commences as a condition of their employment on
the first day of their employment or on the first day that the eligibility criteria are met,
whichever is later. Public employees include but are not limited to:
(1) persons whose salary meets the threshold in this paragraph from employment in
one or more positions within one governmental subdivision;
(2) elected county sheriffs;
(3) persons who are appointed, employed, or contracted to perform governmental
functions that by law or local ordinance are required of a public officer, including, but
not limited to:
(i) town and city clerk or treasurer;
(ii) county auditor, treasurer, or recorder;
(iii) city manager as defined in section 353.028 who does not exercise the option
provided under subdivision 2d; or
(iv) emergency management director, as provided under section 12.25;
(4) physicians under section 353D.01, subdivision 2, who do not elect public
employees defined contribution plan coverage under section 353D.02, subdivision 2;
(5) full-time employees of the Dakota County Agricultural Society;
(6) employees of the Red Wing Port Authority who were first employed by the
Red Wing Port Authority before May 1, 2011, and who are not excluded employees
under subdivision 2b; and
(7) employees of the Seaway Port Authority of Duluth who are not excluded
employees under subdivision 2b.
(8) employees of the Stevens County Housing and Redevelopment Authority who
were first employed by the Stevens County Housing and Redevelopment Authority before
May 1, 2014, and who are not excluded employees under subdivision 2b; and
(9) employees of the Public Employees Retirement Association.
    (b) A public employee or elected official who was a member of the association on
June 30, 2002, based on employment that qualified for membership coverage by the public
employees retirement plan or the public employees police and fire plan under this chapter,
or the local government correctional employees retirement plan under chapter 353E as of
June 30, 2002, retains that membership for the duration of the person's employment in that
position or incumbency in elected office. Except as provided in subdivision 28, the person
shall participate as a member until the employee or elected official terminates public
employment under subdivision 11a or terminates membership under subdivision 11b.
(c) If in any subsequent year the annual salary of an included public employee is
less than $425 in any subsequent month the minimum salary threshold specified in this
subdivision, the member retains membership eligibility.
(d) For the purpose of participation in the MERF division of the general employees
retirement plan, public employees include employees who were members of the former
Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as
members of the MERF division of the association.
EFFECTIVE DATE.The amendments to paragraphs (b) and (d) are effective the
day following final enactment. The amendments to paragraphs (a) and (c) are effective
January 1, 2015.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 353.01, subdivision 2b, is
amended to read:
    Subd. 2b. Excluded employees. (a) The following public employees are not eligible
to participate as members of the association with retirement coverage by the general
employees retirement plan, the local government correctional employees retirement plan
under chapter 353E, or the public employees police and fire retirement plan:
    (1) persons whose annual salary from one governmental subdivision never exceeds
an amount, stipulated in writing in advance, of $5,100 if the person is not a school district
employee or $3,800 if the person is a school year employee. If annual compensation from
one governmental subdivision to an employee exceeds the stipulated amount in a calendar
year or a school year, whichever applies, after being stipulated in advance not to exceed
the applicable amount, the stipulation is no longer valid and contributions must be made
on behalf of the employee under section 353.27, subdivision 12, from the first month in
which the employee received salary exceeding $425 in a month;
(2) public officers who are elected to a governing body, city mayors, or persons who
are appointed to fill a vacancy in an elective office of a governing body, whose term of office
commences on or after July 1, 2002, for the service to be rendered in that elective position;
    (3) election officers or election judges and persons employed solely to administer
elections;
    (4) patient and inmate personnel who perform services for a governmental
subdivision;
    (5) except as otherwise specified in subdivision 12a, employees who are hired for
employed solely in a temporary position as defined under subdivision 12a, and employees
who resign from a nontemporary position and accept a temporary position within 30 days
of that resignation in the same governmental subdivision;
    (6) employees who are employed by reason of work emergency caused by fire,
flood, storm, or similar disaster, but if the person becomes a probationary or provisional
employee within the same pay period, other than on a temporary basis, the person is a
"public employee" retroactively to the beginning of the pay period;
    (7) employees who by virtue of their employment in one governmental subdivision
are required by law to be a member of and to contribute to any of the plans or funds
administered by the Minnesota State Retirement System, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association, and or the St. Paul
Teachers Retirement Fund Association., but this clause exclusion must not be construed
to prevent a person from being a member of and contributing to the Public Employees
Retirement Association and also belonging to and contributing to another public pension
plan or fund for other service occurring during the same period of time., and a person who
meets the definition of "public employee" in subdivision 2 by virtue of other service
occurring during the same period of time becomes a member of the association unless
contributions are made to another public retirement fund plan on the salary based on the
other service or to the Teachers Retirement Association by a teacher as defined in section
354.05, subdivision 2 ;
    (8) persons who are members of a religious order and are excluded from coverage
under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
as amended through January 1, 1987, if no irrevocable election of coverage has been made
under section 3121(r) of the Internal Revenue Code of 1954, as amended;
    (9) employees of persons who are:
    (i) employed by a governmental subdivision who have not reached the age of 23
and who are enrolled on a full-time basis to attend or are attending classes on a full-time
basis at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or at a public or charter high school;
    (10) (ii) employed as resident physicians, medical interns, and pharmacist residents
and, or pharmacist interns who and are serving in a degree or residency program in a
public hospitals hospital or clinics in a public clinic; or
    (11) (iii) students who are serving for up a period not to exceed five years in an
internship or a residency program that is sponsored by a governmental subdivision,
including an accredited educational institution;
    (12) (10) persons who hold a part-time adult supplementary technical college license
who render part-time teaching service in a technical college;
    (13) (11) except for employees of Hennepin County or employees of Hennepin
Healthcare System, Inc., foreign citizens who are employed by a governmental subdivision
under a work permit, or under an H-1b visa initially issued or extended for a combined
period of less than three years of employment. but upon extension of the employment
of the visa beyond the three-year period, the foreign citizens citizen must be reported
for membership beginning on the first of the month thereafter provided following the
extension if the monthly earnings threshold as provided under subdivision 2a is met;
    (14) (12) public hospital employees who elected not to participate as members
of the association before 1972 and who did not elect to participate from July 1, 1988,
to October 1, 1988;
    (15) (13) except as provided in section 353.86, volunteer ambulance service
personnel, as defined in subdivision 35, but persons who serve as volunteer ambulance
service personnel may still qualify as public employees under subdivision 2 and may
be members of the Public Employees Retirement Association and participants in the
general employees retirement plan or the public employees police and fire plan, whichever
applies, on the basis of compensation received from public employment service other than
service as volunteer ambulance service personnel;
    (16) (14) except as provided in section 353.87, volunteer firefighters, as defined in
subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties,
but a person who is a volunteer firefighter may still qualify as a public employee under
subdivision 2 and may be a member of the Public Employees Retirement Association and
a participant in the general employees retirement plan or the public employees police
and fire plan, whichever applies, on the basis of compensation received from public
employment activities other than those as a volunteer firefighter;
    (17) (15) pipefitters and associated trades personnel employed by Independent
School District No. 625, St. Paul, with coverage under a collective bargaining agreement
by the pipefitters local 455 pension plan who were either first employed after May 1,
1997, or, if first employed before May 2, 1997, elected to be excluded under Laws 1997,
chapter 241, article 2, section 12;
    (18) (16) electrical workers, plumbers, carpenters, and associated trades personnel
who are employed by Independent School District No. 625, St. Paul, or the city of St.
Paul, who have retirement coverage under a collective bargaining agreement by the
Electrical Workers Local 110 pension plan, the United Association Plumbers Local 34
pension plan, or the pension plan applicable to Carpenters Local 87 322 who were either
first employed after May 1, 2000, or, if first employed before May 2, 2000, elected to be
excluded under Laws 2000, chapter 461, article 7, section 5;
    (19) (17) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul
or Independent School District No. 625, St. Paul, with coverage under a collective
bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
Session chapter 10, article 10, section 6;
    (20) (18) plumbers who are employed by the Metropolitan Airports Commission,
with coverage under a collective bargaining agreement by the Plumbers Local 34 pension
plan, who either were first employed after May 1, 2001, or if first employed before May 2,
2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article
10, section 6;
    (21) (19) employees who are hired after June 30, 2002, solely to fill seasonal positions
under subdivision 12b which are limited in duration by the employer to 185 consecutive
calendar days or less in each year of employment with the governmental subdivision;
    (22) (20) persons who are provided supported employment or work-study positions
by a governmental subdivision and who participate in an employment or industries
program maintained for the benefit of these persons where the governmental subdivision
limits the position's duration to up to five years, including persons participating in a
federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
unemployment relief program where the training or work experience is not provided as a
part of, or for, future permanent public employment;
    (23) (21) independent contractors and the employees of independent contractors;
    (24) (22) reemployed annuitants of the association during the course of that
reemployment; and
(25) (23) persons appointed to serve on a board or commission of a governmental
subdivision or an instrumentality thereof.; and
(24) persons employed as full-time fixed-route bus drivers by the St. Cloud
Metropolitan Transit Commission who are members of the International Brotherhood
of Teamsters Local 638 and who are, by virtue of that employment, members of the
International Brotherhood of Teamsters Central States pension plan.
(b) Any person performing the duties of a public officer in a position defined in
subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
employee of an independent contractor.
EFFECTIVE DATE.This section is effective January 1, 2015, except paragraph
(a), clause (24), which is effective retroactively from August 1, 1986.

    Sec. 5. Minnesota Statutes 2012, section 353.27, is amended by adding a subdivision
to read:
    Subd. 10a. Written disclosure of membership exclusion determination. If the
determination by the employer under section 353.01, subdivision 2a, paragraph (a), is to
exclude a public employee from membership, the governmental subdivision shall provide
the employee with a written notice of the exclusion on a form prescribed by the executive
director. The notice must include the statutory basis for the exclusion and information
about the employee's right to appeal the determination to the association under section
356.96. The employer must provide the exclusion notice to the employee within two
weeks of the date of the determination and shall retain a copy in the person's personnel file.
EFFECTIVE DATE.This section is effective January 1, 2015.

    Sec. 6. Minnesota Statutes 2012, section 354.05, subdivision 2, is amended to read:
    Subd. 2. Teacher. (a) "Teacher" means:
(1) a person who renders service as a teacher, supervisor, principal, superintendent,
librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of
the state located outside of the corporate limits of the city of Duluth or the city of St. Paul
other than in Independent School District No. 625 or in Independent School District No.
709, or in any charter school, irrespective of the location of the school, or in any charitable,
penal, or correctional institutions of a governmental subdivision, or who is engaged in
educational administration in connection with the state public school system, but excluding
the University of Minnesota, whether the position be a public office or an employment, and
not including the members or officers of any general governing or managing board or body;
(2) an employee of the Teachers Retirement Association;
(3) a person who renders teaching service on a part-time basis and who also renders
other services for a single employing unit. A person whose where the teaching service
comprises at least 50 percent of the combined employment salary is a member of the
association for all services with the single employing unit. If the person's teaching service
comprises or, if less than 50 percent of the combined employment salary, the executive
director must determine whether determines all or none of the combined service is covered
by the association; or
(4) a person who is not covered by the plans established under chapter 352D, 354A,
or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges
and Universities system in an unclassified position as:
(i) a president, vice-president, or dean;
(ii) a manager or a professional in an academic or an academic support program
other than specified in item (i);
(iii) an administrative or a service support faculty position; or
(iv) a teacher or a research assistant.
(b) "Teacher" does not mean:
(1) a person who works for a school or institution as an independent contractor as
defined by the Internal Revenue Service;
(2) a person who renders part-time teaching service or who is a customized trainer
as defined by the Minnesota State Colleges and Universities system if (i) the service is
incidental to the regular nonteaching occupation of the person; and (ii) the employer
stipulates annually in advance that the part-time teaching service or customized training
service will not exceed 300 hours in a fiscal year and retains the stipulation in its records;
and (iii) the part-time teaching service or customized training service actually does not
exceed 300 hours in a fiscal year; or
(3) a person exempt from licensure under section 122A.30.;
(4) annuitants of the teachers retirement plan who are employed after retirement by
an employing unit that participates in the teachers retirement plan during the course of
that reemployment;
(5) a person who is employed by the University of Minnesota;
(6) a member or an officer of any general governing or managing board or body of
an employing unit that participates in the teachers retirement plan; or
(7) a person employed by Independent School District No. 625 or Independent
School District No. 709 as a teacher as defined in section 354A.011, subdivision 27.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 7. Minnesota Statutes 2012, section 354A.011, subdivision 27, is amended to read:
    Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public
school district, other than a charter school, located in the corporate limits of Duluth or
St. Paul, as any of the following:
(1) a full-time employee in a position for which a valid license from the state
Department of Education is required;
(2) an employee of the teachers retirement fund association located in the city of
the first class;
(3) a part-time employee in a position for which a valid license from the state
Department of Education is required; or
(4) a part-time employee in a position for which a valid license from the state
Department of Education is required who also renders other nonteaching services for the
school district, unless the board of trustees of the teachers retirement fund association
determines that the combined employment is on the whole so substantially dissimilar to
teaching service that the service may not be covered by the association.
(b) The term does not mean any person who renders service in the school district
as any of the following:
(1) an independent contractor or the employee of an independent contractor;
(2) an employee who is a full-time teacher covered by the Teachers Retirement
Association or by another teachers retirement fund association established pursuant to this
chapter or chapter 354;
(3) an employee who is exempt from licensure pursuant to section 122A.30;
(4) an employee who is a teacher in a technical college located in a city of the first
class unless the person elects coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2;
(5) a teacher employed by a charter school, irrespective of the location of the
school; or
(6) an employee who is a part-time teacher in a technical college in a city of the first
class and who has elected coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2, but (i) the teaching service is
incidental to the regular nonteaching occupation of the person; (ii) the applicable technical
college stipulates annually in advance that the part-time teaching service will not exceed
300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed 300
hours in the fiscal year to which the certification applies.; or
(7) a person who is receiving a retirement annuity from the Teachers Retirement
Fund Association and is employed after retirement by the school district associated with
the retirement fund association.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 8. Minnesota Statutes 2012, section 356.24, subdivision 1, is amended to read:
    Subdivision 1. Restriction; exceptions. It is unlawful for a school district or other
governmental subdivision or state agency to levy taxes for or to contribute public funds to
a supplemental pension or deferred compensation plan that is established, maintained,
and operated in addition to a primary pension program for the benefit of the governmental
subdivision employees other than:
    (1) to a supplemental pension plan that was established, maintained, and operated
before May 6, 1971;
    (2) to a plan that provides solely for group health, hospital, disability, or death
benefits;
    (3) to the individual retirement account plan established by chapter 354B;
    (4) to a plan that provides solely for severance pay under section 465.72 to a retiring
or terminating employee;
    (5) for employees other than personnel employed by the Board of Trustees of the
Minnesota State Colleges and Universities and covered under the Higher Education
Supplemental Retirement Plan under chapter 354C, but including city managers covered
by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph
(a), or by the defined contribution plan of the Public Employees Retirement Association
under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is
provided for in a personnel policy of the public employer or in the collective bargaining
agreement between the public employer and the exclusive representative of public
employees in an appropriate unit or in the individual employment contract between a city
and a city manager, and if for each available investment all fees and historic rates of return
for the prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an
easily comprehended document not to exceed two pages, in an amount matching employee
contributions on a dollar for dollar basis, but not to exceed an employer contribution of
one-half of the available elective deferral permitted per year per employee, under the
Internal Revenue Code:
    (i) to the state of Minnesota deferred compensation plan under section 352.965;
    (ii) in payment of the applicable portion of the contribution made to any investment
eligible under section 403(b) of the Internal Revenue Code, if the employing unit has
complied with any applicable pension plan provisions of the Internal Revenue Code with
respect to the tax-sheltered annuity program during the preceding calendar year; or
    (iii) any other deferred compensation plan offered by the employer under section
457 of the Internal Revenue Code;
    (6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
and Universities and not covered by clause (5), to the supplemental retirement plan under
chapter 354C, if the supplemental plan coverage is provided for in a personnel policy
or in the collective bargaining agreement of the public employer with the exclusive
representative of the covered employees in an appropriate unit, in an amount matching
employee contributions on a dollar for dollar basis, but not to exceed an employer
contribution of $2,700 a year for each employee;
    (7) to a supplemental plan or to a governmental trust to save for postretirement
health care expenses qualified for tax-preferred treatment under the Internal Revenue
Code, if the supplemental plan coverage is provided for in a personnel policy or in the
collective bargaining agreement of a public employer with the exclusive representative of
the covered employees in an appropriate unit;
    (8) to the laborers national industrial pension fund or to a laborers local pension fund
for the employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $5,000 per year per employee;
    (9) to the plumbers and pipefitters national pension fund or to a plumbers and
pipefitters local pension fund for the employees of a governmental subdivision who are
covered by a collective bargaining agreement that provides for coverage by that fund and
that sets forth a fund contribution rate, but not to exceed an employer contribution of
$5,000 per year per employee;
    (10) to the international union of operating engineers pension fund for the employees
of a governmental subdivision who are covered by a collective bargaining agreement that
provides for coverage by that fund and that sets forth a fund contribution rate, but not to
exceed an employer contribution of $5,000 per year per employee;
    (11) to a supplemental plan organized and operated under the federal Internal
Revenue Code, as amended, that is wholly and solely funded by the employee's
accumulated sick leave, accumulated vacation leave, and accumulated severance pay;
    (12) to the International Association of Machinists national pension fund for the
employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $5,000 per year per employee;
    (13) for employees of United Hospital District, Blue Earth, to the state of Minnesota
deferred compensation program, if the employee makes a contribution, in an amount that
does not exceed the total percentage of covered salary under section 353.27, subdivisions
3 and 3a; or
(14) to the alternative retirement plans established by the Hennepin County Medical
Center under section 383B.914, subdivision 5.; or
(15) to the International Brotherhood of Teamsters Central States pension plan for
fixed-route bus drivers employed by the St. Cloud Metropolitan Transit Commission who
are members of the International Brotherhood of Teamsters Local 638 by virtue of that
employment.
EFFECTIVE DATE.This section is effective retroactively from August 1, 1986.

    Sec. 9. VALIDATION OF PAST RETIREMENT COVERAGE
AND CONTRIBUTIONS FOR STEVENS COUNTY HOUSING AND
REDEVELOPMENT AUTHORITY EMPLOYEES.
(a) Retirement coverage by the general employees plan of the Public Employees
Retirement Association, allowable service credit, and salary credit for employees of the
Stevens County Housing and Redevelopment Authority who were so employed after
November 7, 1984, and were first so employed before May 1, 2014, who had monthly
salary in any month of at least $325 until June 30, 1988, and who had monthly salary in
any month of at least $425 after June 30, 1988, who were not otherwise excluded under
the applicable edition of Minnesota Statutes, section 353.01, subdivision 2b, and who had
member deductions taken and transferred in a timely manner to the general employees
retirement fund before the effective date of this section are hereby validated.
(b) Notwithstanding any provision of Minnesota Statutes, chapter 353, to the
contrary, employee contributions deducted from employees of the Stevens County
Housing and Redevelopment Authority described in paragraph (a) before the effective
date of this section and associated employer contributions are valid assets of the general
employees retirement fund and are not subject to refund or adjustment for erroneous
receipt except as provided in Minnesota Statutes, section 353.32, subdivision 1 or 2;
or 353.34, subdivisions 1 and 2.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 2

RETIREMENT GOVERNING BOARD PROVISIONS

    Section 1. Minnesota Statutes 2012, section 352.03, subdivision 1, is amended to read:
    Subdivision 1. Membership of board; election; term. (a) The policy-making
function of the system is vested in a board of 11 members known as the board of directors.
This board shall consist of:
(1) three members appointed by the governor, one of whom must be a constitutional
officer or appointed state official and two of whom must be public members knowledgeable
in pension matters,;
(2) four state employees elected by state employees covered by the system active
members and former members eligible for a deferred annuity from the general state
employees retirement plan, excluding employees in categories specifically authorized
to designate or elect a member by this subdivision, and deferred annuitants for whom
a board member is designated;
(3) one employee of the Metropolitan Council's transit operations or its successor
agency designated by the executive committee of the labor organization that is the
exclusive bargaining agent representing employees of the transit division,;
(4) one employee who is a member of the State Patrol retirement fund plan elected
by active members of and former members eligible for a deferred annuity from that fund
at a time and in a manner fixed by the board, plan;
(5) one employee covered by who is a member of the correctional state employees
retirement plan established under this chapter elected by employees covered by active
members and former members eligible for a deferred annuity from that plan,; and
(6) one retired employee of a plan included in the system, elected by disabled and
retired employees of all the plans administered by the system at a time and in a manner to
be fixed determined by the board.
(b) The terms of the four elected state employees under paragraph (a), clause (2),
must be staggered, with two of the state employee members board positions elected
each biennium, whose terms of office begin on the first Monday in May after their
election, must be elected biennially. Elected members and the appointed member of the
Metropolitan Council's transit operations hold office for a term of four years and until their
successors are elected or appointed, and have qualified.
(c) An employee or former employee of the system is not eligible for membership
on the board of directors. A state employee on leave of absence is not eligible for election
or reelection to membership on the board of directors.
(d) The term of any board member who is on leave for more than six months
automatically ends on expiration of the term of office.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 352.03, is amended by adding a subdivision
to read:
    Subd. 1b. Membership voting limitations. Active members and former members
eligible for a deferred annuity from a plan under this chapter or chapter 352B are eligible
to vote in board elections as further specified and restricted in this section. Retired
members and disabilitants from a plan in the system may vote only for the retired member
position under subdivision 1, paragraph (a), clause (6). If a former member eligible for a
deferred annuity from a plan under this chapter or chapter 352B is a deferred annuitant
from more than one plan covered by the system, that person is eligible to vote only in
elections applicable for deferred annuitants from the plan in the system from which the
person last received allowable service. If a person is an active member of a plan in the
system and is a deferred annuitant or a retiree from another plan or plans in the system,
the person is only eligible to vote in board elections applicable due to the active member
plan membership. If a person is a deferred annuitant from a plan in the system and is also
a retiree from another plan in the system, the person is only eligible to vote in elections
applicable due to the retiree status.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 3

RETIREMENT PLAN CONTRIBUTION RATE CHANGES

    Section 1. Minnesota Statutes 2012, section 352.04, subdivision 2, is amended to read:
    Subd. 2. Employee contributions. (a) The employee contribution to the fund must
be equal to the following percent of salary:

		before July 1, 2007	4.00
		from July 1, 2007, to June 30, 2008	4.25
		from July 1, 2008, to June 30, 2009	4.50
		from July 1, 2009, to June 30, 2010	4.75
		from July 1, 2010, and thereafterto June 30, 2014	5.00.
		from July 1, 2014, and thereafter	5.50.

(b) These contributions must be made by deduction from salary as provided in
subdivision 4.
EFFECTIVE DATE.This section is effective on the first day of the first full pay
period beginning after July 1, 2014.

    Sec. 2. Minnesota Statutes 2012, section 352.04, subdivision 3, is amended to read:
    Subd. 3. Employer contributions. The employer contribution to the fund must be
equal to the following percent of salary:

		before July 1, 2007	4.00
		from July 1, 2007, to June 30, 2008	4.25
		from July 1, 2008, to June 30, 2009	4.50
		from July 1, 2009, to June 30, 2010	4.75
		from July 1, 2010, and thereafterto June 30, 2014	5.00.
		from July 1, 2014, and thereafter	5.50.

EFFECTIVE DATE.This section is effective on the first day of the first full pay
period beginning after July 1, 2014.

    Sec. 3. Minnesota Statutes 2012, section 352.92, subdivision 1, is amended to read:
    Subdivision 1. Employee contributions. (a) Employee contributions of covered
correctional employees must be in an amount equal to the following percent of salary:

		before July 1, 2007	5.69
		from July 1, 2007, to June 30, 2008	6.40
		from July 1, 2008, to June 30, 2009	7.00
		from July 1, 2009, to June 30, 2010	7.70
		from July 1, 2010, and thereafterto June 30, 2014	8.60.
		from July 1, 2014, and thereafter	9.10.

(b) These contributions must be made by deduction from salary as provided in
section 352.04, subdivision 4.
EFFECTIVE DATE.This section is effective on the first day of the first full pay
period beginning after July 1, 2014.

    Sec. 4. Minnesota Statutes 2012, section 352.92, subdivision 2, is amended to read:
    Subd. 2. Employer contributions. The employer shall contribute for covered
correctional employees an amount equal to the following percent of salary:

		before July 1, 2007	7.98
		from July 1, 2007, to June 30, 2008	9.10
		from July 1, 2008, to June 30, 2009	10.10
		from July 1, 2009, to June 30, 2010	11.10
		from July 1, 2010, and thereafterto June 30, 2014	12.10.
		from July 1, 2014, and thereafter	12.85.

EFFECTIVE DATE.This section is effective on the first day of the first full pay
period beginning after July 1, 2014.

    Sec. 5. Minnesota Statutes 2012, section 353.27, subdivision 2, is amended to read:
    Subd. 2. General employees retirement plan; employee contribution. (a) For
a basic member of the general employees retirement plan of the Public Employees
Retirement Association, the employee contribution is 9.10 percent of salary. For a
coordinated member of the general employees retirement plan of the Public Employees
Retirement Association, the employee contribution is the following percentage of salary
plus any contribution rate adjustment under subdivision 3b:

		Effective before January 1, 2011	6.00
		Effective after December 31, 2010	6.25
		Effective January 1, 2015	6.50.

(b) These contributions must be made by deduction from salary as defined in section
353.01, subdivision 10 , in the manner provided in subdivision 4. If any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the total salary received by the member from all sources.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 353.27, subdivision 3, is amended to read:
    Subd. 3. General employees retirement plan; employer contribution. (a) For
a basic member of the general employees retirement plan of the Public Employees
Retirement Association, the employer contribution is 9.10 percent of salary. For a
coordinated member of the general employees retirement plan of the Public Employees
Retirement Association, the employer contribution is the following percentage of salary
plus any contribution rate adjustment under subdivision 3b:

		Effective before January 1, 2011	6.00
		Effective after December 31, 2010	6.25
		Effective January 1, 2015	6.50.

(b) This contribution must be made from funds available to the employing
subdivision by the means and in the manner provided in section 353.28.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2012, section 353.27, subdivision 3b, is amended to read:
    Subd. 3b. Change in employee and employer contributions in certain instances.
(a) For purposes of this section:
(1) a contribution sufficiency exists if the total of the employee contribution under
subdivision 2, the employer contribution under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional contribution previously imposed
under this subdivision exceeds the total of the normal cost, the administrative expenses,
and the amortization contribution of the general employees retirement plan as reported in
the most recent actuarial valuation of the retirement plan prepared by the actuary retained
under section 356.214 and prepared under section 356.215 and the standards for actuarial
work of the Legislative Commission on Pensions and Retirement; and
(2) a contribution deficiency exists if the total of the employee contributions under
subdivision 2, the employer contributions under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional contribution previously imposed
under this subdivision is less than the total of the normal cost, the administrative expenses,
and the amortization contribution of the general employees retirement plan as reported in
the most recent actuarial valuation of the retirement plan prepared by the actuary retained
under section 356.214 and prepared under section 356.215 and the standards for actuarial
work of the Legislative Commission on Pensions and Retirement.
(b) Employee and employer contributions to the general employees retirement plan
under subdivisions 2 and 3 must be adjusted:
(1) if, on or after July 1, 2010, the regular actuarial valuation of the general employees
retirement plan of the Public Employees Retirement Association under section 356.215
indicates that there is a contribution sufficiency under paragraph (a) greater than one
percent of covered payroll and that the sufficiency has existed for at least two consecutive
years, the coordinated program employee and employer contribution rates must be
decreased as determined under paragraph (c) to a level such that the sufficiency is no
greater than one percent of covered payroll based on the most recent actuarial valuation; or
(2) if, on or after July 1, 2010, the regular actuarial valuation of the general
employees retirement plan of the Public Employees Retirement Association under section
356.215 indicates that there is a contribution deficiency equal to or greater than 0.5 percent
of covered payroll and that the deficiency has existed for at least two consecutive years,
the coordinated program employee and employer contribution rates must be increased
as determined under paragraph (d) to a level such that no deficiency exists based on the
most recent actuarial valuation.
(c) If the actuarially required contribution of the general employees retirement plan is
less than the total support provided by the combined employee and employer contribution
rates under subdivisions 2, 3, and 3a, by more than one percent of covered payroll,
the general employees retirement plan coordinated program employee and employer
contribution rates under subdivisions 2 and 3 must be decreased incrementally over one or
more years by no more than 0.25 percent of pay each for employee and employer matching
contribution rates to a level such that there remains a contribution sufficiency of at least one
percent of covered payroll. No contribution rate decrease may be made until at least two
years have elapsed since any adjustment under this subdivision has been fully implemented.
(d) If the actuarially required contribution exceeds the total support provided by the
combined employee and employer contribution rates under subdivisions 2, 3, and 3a,
the employee and matching employer contribution rates must be increased equally to
eliminate that contribution deficiency. If the contribution deficiency is:
(1) less than two percent, the incremental increase may be up to 0.25 percent for the
general employees retirement plan employee and matching employer contribution rates;
(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
may be up to 0.5 percent for the employee and matching employer contribution rates; or
(3) greater than four percent, the incremental increase may be up to 0.75 percent for
the employee and matching employer contribution.
(e) The general employees retirement plan contribution sufficiency or deficiency
determination under paragraphs (a) to (d) must be made without the inclusion of the
contributions to, the funded condition of, or the actuarial funding requirements of the
MERF division.
(f) Any recommended adjustment to the contribution rates must be reported to the
chair and the executive director of the Legislative Commission on Pensions and Retirement
by January 15 following the receipt of the most recent annual actuarial valuation prepared
under section 356.215. If the Legislative Commission on Pensions and Retirement does
not recommend against the rate change or does not recommend a modification in the rate
change, the recommended adjustment becomes effective on the first day of the first full
payroll period in the fiscal year for any salary paid on or after the January 1 next following
receipt of the most recent actuarial valuation that gave rise to the adjustment the legislative
session in which the Legislative Commission on Pensions and Retirement did not take any
action to disapprove or modify the Public Employees Retirement Association Board of
Trustees' recommendation to adjust the employee and employer rates.
(g) A contribution sufficiency of up to one percent of covered payroll must be held in
reserve to be used to offset any future actuarially required contributions that are more than
the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
(h) Before any reduction in contributions to eliminate a sufficiency in excess of one
percent of covered pay may be recommended, the executive director must review any
need for a change in actuarial assumptions, as recommended by the actuary retained under
section 356.214 in the most recent experience study of the general employees retirement
plan prepared under section 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement that may result in an increase
in the actuarially required contribution and must report to the Legislative Commission
on Pensions and Retirement any recommendation by the board to use the sufficiency
exceeding one percent of covered payroll to offset the impact of an actuarial assumption
change recommended by the actuary retained under section 356.214, subdivision 1, and
reviewed by the actuary retained by the commission under section 356.214, subdivision 4.
(i) No contribution sufficiency in excess of one percent of covered pay may be
proposed to be used to increase benefits, and no benefit increase may be proposed that
would initiate an automatic adjustment to increase contributions under this subdivision.
Any proposed benefit improvement must include a recommendation, prepared by the
actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
retained by the Legislative Commission on Pensions and Retirement as provided under
section 356.214, subdivision 4, on how the benefit modification will be funded.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 4

JOINT AND SURVIVOR OPTIONAL ANNUITY COMPUTATION
DISCOUNT RATE

    Section 1. Minnesota Statutes 2012, section 3A.01, subdivision 1a, is amended to read:
    Subd. 1a. Actuarial equivalent. (a) "Actuarial equivalent" means the condition of
one allowance or benefit having an equal actuarial present value to another allowance or
benefit, determined by the actuary retained under section 356.214 as of a given date at a
specified age with each actuarial present value based on the mortality table applicable for
the plan and approved under section 356.215, subdivision 18, and using the applicable
preretirement or postretirement interest rate assumption specified in section 356.215,
subdivision 8 .
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used, rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 2. Minnesota Statutes 2012, section 352.01, subdivision 12, is amended to read:
    Subd. 12. Actuarial equivalent. (a) "Actuarial equivalent" means the condition
of one annuity or benefit having an equal actuarial present value as another annuity or
benefit, determined as of a given date at a specified age with each actuarial present value
based on the appropriate mortality table adopted by the board of directors based on the
experience of the fund as recommended by the actuary retained under section 356.214, and
approved under section 356.215, subdivision 18, and using the applicable preretirement or
postretirement interest rate assumption specified in section 356.215, subdivision 8.
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used, rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 352.03, subdivision 4, is
amended to read:
    Subd. 4. Duties and powers of board of directors. (a) The board shall:
    (1) elect a chair;
    (2) appoint an executive director;
    (3) establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D,
and 490 and transact the business of the system, subject to the limitations of law;
    (4) consider and dispose of, or take any other action the board of directors deems
appropriate concerning, denials of applications for annuities or disability benefits under
this chapter, chapter 3A, 352B, 352C, 352D, or 490, and complaints of employees and
others pertaining to the retirement of employees and the operation of the system;
    (5) oversee the administration of the deferred compensation plan established in
section 352.965;
    (6) oversee the administration of the health care savings plan established in section;
and
    (7) approve early retirement and optional annuity factors for all plans administered
by the system, including approving retirement annuity factors for the unclassified state
employees program under chapter 352D, subject to review by the actuary retained by
the Legislative Commission on Pensions and Retirement; establish the schedule for
implementation of the approved factors; and notify the Legislative Commission on
Pensions and Retirement of the implementation schedule.
    (b) The board shall advise the director on any matters relating to the system and
carrying out functions and purposes of this chapter. The board's advice shall control.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 4. Minnesota Statutes 2012, section 352B.08, subdivision 3, is amended to read:
    Subd. 3. Optional annuity forms. (a) In lieu of the single life annuity provided in
subdivision 2, the member or former member may elect an optional annuity form. The
board of the Minnesota state retirement system shall establish a joint and survivor annuity,
payable to a designated beneficiary for life, adjusted to the actuarial equivalent value of
the single life annuity. The board shall also establish an additional optional annuity with
an actuarial equivalent value of the single life annuity in the form of a joint and survivor
annuity which provides that the elected annuity be reinstated to the single life annuity
provided in subdivision 2, if after commencing the elected joint and survivor annuity, the
designated beneficiary dies before the member, which reinstatement is not retroactive but
takes effect for the first full month occurring after the death of the designated beneficiary.
The board may also establish other actuarial equivalent value optional annuity forms. In
establishing actuarial equivalent value optional annuity forms, each optional annuity form
shall have the same present value as a regular single life annuity using the mortality
table adopted by the board and the interest assumption specified in section 356.215,
subdivision 8 , and.
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used, rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
(c) The board shall obtain the written recommendation of the actuary retained under
section 356.214. These recommendations shall be a part of the permanent records of
the board.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 5. Minnesota Statutes 2012, section 353.01, subdivision 14, is amended to read:
    Subd. 14. Actuarial equivalent. (a) "Actuarial equivalent" means the condition
of one annuity or benefit having an equal actuarial present value as another annuity or
benefit, determined as of a given date with each actuarial present value based on the
appropriate mortality table adopted by the board of trustees based on the experience of the
fund as recommended by the actuary retained under section 356.214, and approved under
section 356.215, subdivision 18, and using the applicable preretirement or postretirement
interest rate assumption specified in section 356.215, subdivision 8.
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
EFFECTIVE DATE.This section is effective on the same date as the next mortality
assumption adjustment or on July 1, 2017, whichever is earlier.

    Sec. 6. Minnesota Statutes 2012, section 353.30, subdivision 3, is amended to read:
    Subd. 3. Optional retirement annuity forms. (a) The board of trustees shall
establish optional annuities which shall take the form of a joint and survivor annuity.
Except as provided in subdivision 3a, the optional annuity forms shall be actuarially
equivalent to the forms provided in section 353.29 and subdivisions 1, 1a, 1b, 1c, and 5.
In establishing those optional forms, the board shall obtain the written recommendation of
the actuary retained under section 356.214. The recommendations shall be a part of the
permanent records of the board. A member or former member may select an optional form
of annuity, subject to the provisions of section 356.46, in lieu of accepting any other form
of annuity which might otherwise be available.
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
EFFECTIVE DATE.This section is effective on the same date as the next mortality
assumption adjustment or on July 1, 2017, whichever is earlier.

    Sec. 7. Minnesota Statutes 2012, section 354.05, subdivision 7, is amended to read:
    Subd. 7. Actuarial equivalent. (a) "Actuarial equivalent" means the condition
of one annuity or benefit having an equal actuarial present value as another annuity or
benefit, determined as of a given date with each actuarial present value based on the
appropriate mortality table adopted by the board of trustees based on the experience
of the association as recommended by the actuary retained under section 356.214, and
approved under section 356.215, subdivision 18, and using the applicable preretirement or
postretirement interest rate assumption specified in section 356.215, subdivision 8.
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 8. [356.461] VARIOUS RETIREMENT SYSTEMS; JOINT AND
SURVIVOR ANNUITY COMPUTATION.
    Subdivision 1. Joint and survivor annuity computation. Notwithstanding any
provision of section 356.215, subdivision 8, or 356.415 to the contrary, for purposes of
computing joint and survivor annuities, the applicable postretirement interest assumption
is 6.5 percent.
    Subd. 2. Covered plans. This section applies to the following retirement plans:
(1) the legislators retirement plan, established under chapter 3A, including
constitutional officers as specified in that chapter;
(2) the correctional state employees retirement plan of the Minnesota State
Retirement System, established under chapter 352;
(3) the general state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;
(4) the State Patrol retirement plan, established under chapter 352B;
(5) the unclassified state employees retirement program of the Minnesota State
Retirement System, established under chapter 352D;
(6) the judges retirement plan, established under chapter 490;
(7) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353, including the MERF division of the Public
Employees Retirement Association;
(8) the public employees police and fire retirement plan of the Public Employees
Retirement Association, established under chapter 353;
(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established under chapter 353E; and
(10) the Teachers Retirement Association, established under chapter 354.
EFFECTIVE DATE.(a) For plans administered by the Minnesota State Retirement
System and the Teachers Retirement Association, this section is effective July 1, 2014.
(b) For plans administered by the Public Employees Retirement Association, this
section applies to the determination of joint and survivor factors implemented for the
applicable Public Employees Retirement Association plan effective on the same date as
the next mortality assumption adjustment or on July 1, 2017, whichever is earlier.

    Sec. 9. Minnesota Statutes 2012, section 490.121, subdivision 2a, is amended to read:
    Subd. 2a. Actuarial equivalent. (a) "Actuarial equivalent" means the condition
of one annuity or benefit having an equal actuarial present value as another annuity or
benefit, determined as of a given date with each actuarial present value based on the
appropriate mortality table adopted by the board of directors of the Minnesota State
Retirement System based on the experience of the fund as recommended by the actuary
retained under section 356.214 and approved under section 356.215, subdivision 18, and
using the applicable preretirement or postretirement interest rate assumption specified in
section 356.215, subdivision 8.
(b) For purposes of computing a joint and survivor annuity, the postretirement
interest rate assumption specified in section 356.461 must be used, rather than the
postretirement interest rate specified in section 356.215, subdivision 8.
EFFECTIVE DATE.This section is effective July 1, 2014.

ARTICLE 5

MSRS-CORRECTIONAL RETIREMENT PLAN COVERAGE CHANGES

    Section 1. Minnesota Statutes 2012, section 352.90, is amended to read:
352.90 POLICY.
It is the policy of the legislature to provide special retirement benefits for and special
contributions by certain correctional employees who may be required to retire at an early
age because they lose the mental or physical capacity required to maintain the safety,
security, discipline, and custody of inmates at state correctional facilities or; of patients
at in the state-operated forensic services program, which is comprised of the Minnesota
Security Hospital, the forensic nursing home, the forensic transition service, and the
competency restoration program; of patients in the Minnesota sex offender program,; or of
patients in the Minnesota Specialty Health System-Cambridge.

    Sec. 2. Minnesota Statutes 2012, section 352.91, subdivision 1, is amended to read:
    Subdivision 1. Qualifying jobs. "Covered correctional service" means service
performed by a state employee, as defined in section 352.01, employed at a state
correctional facility, the Minnesota Security Hospital state-operated forensic services
program, or the Minnesota sex offender program as:
(1) a corrections officer 1;
(2) a corrections officer 2;
(3) a corrections officer 3;
(4) a corrections officer supervisor;
(5) a corrections lieutenant;
(6) a corrections captain;
(7) a security counselor;
(8) a security counselor lead; or
(9) a corrections canine officer.

    Sec. 3. Minnesota Statutes 2012, section 352.91, subdivision 2, is amended to read:
    Subd. 2. Maintenance, correctional industry, and trades. "Covered correctional
service" also means service rendered at any time by state employees as maintenance
personnel, correctional industry personnel, or members of trades certified by the
commissioner of management and budget to the executive director as being engaged for at
least 75 percent of the employee's working time in the rehabilitation, treatment, custody,
or supervision of inmates at a Minnesota correctional facility, or of patients at in the
Minnesota Security Hospital state-operated forensic services program or the Minnesota
sex offender program.

    Sec. 4. Minnesota Statutes 2012, section 352.91, subdivision 3c, is amended to read:
    Subd. 3c. Nursing personnel. (a) "Covered correctional service" means service
by a state employee in one of the employment positions at a correctional facility or at,
in the Minnesota Security Hospital state-operated forensic services program, or in the
Minnesota sex offender program that are specified in paragraph (b) if at least 75 percent of
the employee's working time is spent in direct contact with inmates or patients and the fact
of this direct contact is certified to the executive director by the appropriate commissioner.
(b) The employment positions are as follows:
(1) registered nurse - senior;
(2) registered nurse;
(3) registered nurse - principal;
(4) licensed practical nurse 2;
(5) registered nurse advance practice; and
(6) psychiatric advance practice registered nurse.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 352.91, subdivision 3d, is amended to read:
    Subd. 3d. Other correctional personnel. (a) "Covered correctional service"
means service by a state employee in one of the employment positions at a correctional
facility or at in the Minnesota Security Hospital state-operated forensic services program
specified in paragraph (b) if at least 75 percent of the employee's working time is spent
in direct contact with inmates or patients and the fact of this direct contact is certified to
the executive director by the appropriate commissioner.
    (b) The employment positions are:
    (1) automotive mechanic;
(2) baker;
    (3) central services administrative specialist, intermediate;
    (4) central services administrative specialist, principal;
    (5) chaplain;
    (6) chief cook;
    (7) clinical program therapist 1;
(8) clinical program therapist 2;
(9) clinical program therapist 3;
(10) clinical program therapist 4;
(11) cook;
    (12) cook coordinator;
    (13) corrections inmate program coordinator;
    (14) corrections transitions program coordinator;
    (15) corrections security caseworker;
    (16) corrections security caseworker career;
    (17) corrections teaching assistant;
    (18) delivery van driver;
    (19) dentist;
    (20) electrician supervisor;
    (21) general maintenance worker lead;
    (22) general repair worker;
    (23) library/information research services specialist;
    (24) library/information research services specialist senior;
    (25) library technician;
    (26) painter lead;
    (27) plant maintenance engineer lead;
    (28) plumber supervisor;
    (29) psychologist 1;
    (30) psychologist 3;
    (31) recreation therapist;
    (32) recreation therapist coordinator;
    (33) recreation program assistant;
    (34) recreation therapist senior;
    (35) sports medicine specialist;
    (36) work therapy assistant;
    (37) work therapy program coordinator; and
    (38) work therapy technician.

    Sec. 6. Minnesota Statutes 2012, section 352.91, subdivision 3e, is amended to read:
    Subd. 3e. Minnesota Specialty Health System-Cambridge. (a) "Covered
correctional service" means service by a state employee in one of the employment positions
with the Minnesota Specialty Health System-Cambridge specified in paragraph (b) if at
least 75 percent of the employee's working time is spent in direct contact with patients
who are in the Minnesota Specialty Health System-Cambridge and if service in such a
position is certified to the executive director by the commissioner of human services.
    (b) The employment positions are:
    (1) behavior analyst 1;
    (2) behavior analyst 2;
    (3) behavior analyst 3;
    (4) group supervisor;
    (5) group supervisor assistant;
    (6) human services support specialist;
    (7) residential program lead;
    (8) psychologist 2;
    (9) recreation program assistant;
    (10) recreation therapist senior;
    (11) registered nurse senior;
    (12) skills development specialist;
    (13) social worker senior;
    (14) social worker specialist; and
    (15) speech pathology specialist.
(c) A Department of Human Services employee who was employed at the Minnesota
Specialty Health System-Cambridge immediately preceding the 2014 conversion to the
community-based homes and was in covered correctional service at the time of the
transition shall continue to be covered by the correctional employee retirement plan while
employed and without a break in service with the Department of Human Services in the
direct care and treatment services administration.

    Sec. 7. Minnesota Statutes 2012, section 352.91, subdivision 3f, is amended to read:
    Subd. 3f. Additional Department of Human Services personnel. (a) "Covered
correctional service" means service by a state employee in one of the employment
positions specified in paragraph (b) at in the Minnesota Security Hospital state-operated
forensic services program or in the Minnesota sex offender program if at least 75
percent of the employee's working time is spent in direct contact with patients and
the determination of this direct contact is certified to the executive director by the
commissioner of human services.
    (b) The employment positions are:
    (1) behavior analyst 2;
    (2) behavior analyst 3;
    (3) certified occupational therapy assistant 1;
    (4) certified occupational therapy assistant 2;
    (5) chemical dependency counselor senior;
    (6) client advocate;
    (7) clinical program therapist 2;
    (7) (8) clinical program therapist 3;
(8) (9) clinical program therapist 4;
(9) (10) customer services specialist principal;
    (10) (11) dental assistant registered;
    (11) (12) group supervisor;
    (12) (13) group supervisor assistant;
    (13) (14) human services support specialist;
    (14) (15) licensed alcohol and drug counselor;
    (15) (16) licensed practical nurse 1;
    (16) (17) management analyst 3;
    (17) (18) occupational therapist;
    (18) (19) occupational therapist, senior;
    (19) (20) psychologist 1;
    (20) (21) psychologist 2;
    (21) (22) psychologist 3;
    (22) (23) recreation program assistant;
    (23) (24) recreation therapist lead;
    (24) (25) recreation therapist senior;
    (25) (26) rehabilitation counselor senior;
    (26) (27) security supervisor;
    (27) (28) skills development specialist;
    (28) (29) social worker senior;
    (29) (30) social worker specialist;
    (30) (31) social worker specialist, senior;
    (31) (32) special education program assistant;
    (32) (33) speech pathology clinician;
    (33) (34) work therapy assistant; and
    (34) (35) work therapy program coordinator.

    Sec. 8. Minnesota Statutes 2012, section 352.91, is amended by adding a subdivision
to read:
    Subd. 3j. State-operated forensic services program. For purposes of this section,
"state-operated forensic services program" means the Minnesota Security Hospital, the
forensic nursing home, the forensic transition service, and the competency restoration
program.

ARTICLE 6

TRA-DTRFA CONSOLIDATION

    Section 1. Minnesota Statutes 2012, section 13.632, subdivision 1, is amended to read:
    Subdivision 1. Beneficiary and survivor data. The following data on beneficiaries
and survivors of the St. Paul Teachers Retirement Fund Association and the Duluth
Teachers Retirement Fund Association members are private data on individuals: home
address, date of birth, direct deposit number, and tax withholding data.

    Sec. 2. Minnesota Statutes 2012, section 122A.18, subdivision 7a, is amended to read:
    Subd. 7a. Permission to substitute teach. (a) The Board of Teaching may allow a
person who is enrolled in and making satisfactory progress in a board-approved teacher
program and who has successfully completed student teaching to be employed as a
short-call substitute teacher.
(b) The Board of Teaching may issue a lifetime qualified short-call substitute
teaching license to a person who:
(1) was a qualified teacher under section 122A.16 while holding a continuing
five-year teaching license issued by the board, and receives a retirement annuity from the
Teachers Retirement Association, Minneapolis Teachers Retirement Fund Association,
or the St. Paul Teachers Retirement Fund Association, or Duluth Teachers Retirement
Fund Association;
(2) holds an out-of-state teaching license and receives a retirement annuity as a
result of the person's teaching experience; or
(3) held a continuing five-year license issued by the board, taught at least three
school years in an accredited nonpublic school in Minnesota, and receives a retirement
annuity as a result of the person's teaching experience.
A person holding a lifetime qualified short-call substitute teaching license is not required
to complete continuing education clock hours. A person holding this license may reapply
to the board for a continuing five-year license and must again complete continuing
education clock hours one school year after receiving the continuing five-year license.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 353.01, subdivision 2b, is
amended to read:
    Subd. 2b. Excluded employees. (a) The following public employees are not eligible
to participate as members of the association with retirement coverage by the general
employees retirement plan, the local government correctional employees retirement plan
under chapter 353E, or the public employees police and fire retirement plan:
    (1) persons whose salary from one governmental subdivision never exceeds $425 in
a month;
(2) public officers who are elected to a governing body, city mayors, or persons who
are appointed to fill a vacancy in an elective office of a governing body, whose term of office
commences on or after July 1, 2002, for the service to be rendered in that elective position;
    (3) election officers or election judges;
    (4) patient and inmate personnel who perform services for a governmental
subdivision;
    (5) except as otherwise specified in subdivision 12a, employees who are hired for
a temporary position as defined under subdivision 12a, and employees who resign from
a nontemporary position and accept a temporary position within 30 days in the same
governmental subdivision;
    (6) employees who are employed by reason of work emergency caused by fire,
flood, storm, or similar disaster;
    (7) employees who by virtue of their employment in one governmental subdivision
are required by law to be a member of and to contribute to any of the plans or funds
administered by the Minnesota State Retirement System, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association, and the St. Paul Teachers
Retirement Fund Association. This clause must not be construed to prevent a person from
being a member of and contributing to the Public Employees Retirement Association and
also belonging to and contributing to another public pension plan or fund for other service
occurring during the same period of time. A person who meets the definition of "public
employee" in subdivision 2 by virtue of other service occurring during the same period of
time becomes a member of the association unless contributions are made to another public
retirement fund on the salary based on the other service or to the Teachers Retirement
Association by a teacher as defined in section 354.05, subdivision 2;
    (8) persons who are members of a religious order and are excluded from coverage
under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
as amended through January 1, 1987, if no irrevocable election of coverage has been made
under section 3121(r) of the Internal Revenue Code of 1954, as amended;
    (9) employees of a governmental subdivision who have not reached the age of
23 and are enrolled on a full-time basis to attend or are attending classes on a full-time
basis at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or a public or charter high school;
    (10) resident physicians, medical interns, and pharmacist residents and pharmacist
interns who are serving in a degree or residency program in public hospitals or clinics;
    (11) students who are serving for up to five years in an internship or residency program
sponsored by a governmental subdivision, including an accredited educational institution;
    (12) persons who hold a part-time adult supplementary technical college license who
render part-time teaching service in a technical college;
    (13) except for employees of Hennepin County or Hennepin Healthcare System, Inc.,
foreign citizens who are employed by a governmental subdivision under a work permit, or
an H-1b visa initially issued or extended for a combined period less than three years of
employment. Upon extension of the employment beyond the three-year period, the foreign
citizens must be reported for membership beginning the first of the month thereafter
provided the monthly earnings threshold as provided under subdivision 2a is met;
    (14) public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988, to October
1, 1988;
    (15) except as provided in section 353.86, volunteer ambulance service personnel, as
defined in subdivision 35, but persons who serve as volunteer ambulance service personnel
may still qualify as public employees under subdivision 2 and may be members of the
Public Employees Retirement Association and participants in the general employees
retirement plan or the public employees police and fire plan, whichever applies, on the
basis of compensation received from public employment service other than service as
volunteer ambulance service personnel;
    (16) except as provided in section 353.87, volunteer firefighters, as defined in
subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties,
but a person who is a volunteer firefighter may still qualify as a public employee under
subdivision 2 and may be a member of the Public Employees Retirement Association and
a participant in the general employees retirement plan or the public employees police
and fire plan, whichever applies, on the basis of compensation received from public
employment activities other than those as a volunteer firefighter;
    (17) pipefitters and associated trades personnel employed by Independent School
District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
241, article 2, section 12;
    (18) electrical workers, plumbers, carpenters, and associated trades personnel who
are employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
who have retirement coverage under a collective bargaining agreement by the Electrical
Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
or the pension plan applicable to Carpenters Local 87 who were either first employed after
May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under
Laws 2000, chapter 461, article 7, section 5;
    (19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul
or Independent School District No. 625, St. Paul, with coverage under a collective
bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
Session chapter 10, article 10, section 6;
    (20) plumbers who are employed by the Metropolitan Airports Commission, with
coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan,
who either were first employed after May 1, 2001, or if first employed before May 2,
2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article
10, section 6;
    (21) employees who are hired after June 30, 2002, to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
days or less in each year of employment with the governmental subdivision;
    (22) persons who are provided supported employment or work-study positions by a
governmental subdivision and who participate in an employment or industries program
maintained for the benefit of these persons where the governmental subdivision limits the
position's duration to up to five years, including persons participating in a federal or state
subsidized on-the-job training, work experience, senior citizen, youth, or unemployment
relief program where the training or work experience is not provided as a part of, or
for, future permanent public employment;
    (23) independent contractors and the employees of independent contractors;
    (24) reemployed annuitants of the association during the course of that
reemployment; and
(25) persons appointed to serve on a board or commission of a governmental
subdivision or an instrumentality thereof.
(b) Any person performing the duties of a public officer in a position defined in
subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
employee of an independent contractor.

    Sec. 4. Minnesota Statutes 2012, section 354.05, subdivision 2, is amended to read:
    Subd. 2. Teacher. (a) "Teacher" means:
(1) a person who renders service as a teacher, supervisor, principal, superintendent,
librarian, nurse, counselor, social worker, therapist, or psychologist in a public school of
the state located outside of the corporate limits of the city of Duluth or the city of St. Paul,
or in any charter school, irrespective of the location of the school, or in any charitable,
penal, or correctional institutions of a governmental subdivision, or who is engaged in
educational administration in connection with the state public school system, but excluding
the University of Minnesota, whether the position be a public office or an employment, and
not including the members or officers of any general governing or managing board or body;
(2) an employee of the Teachers Retirement Association;
(3) a person who renders teaching service on a part-time basis and who also renders
other services for a single employing unit. A person whose teaching service comprises at
least 50 percent of the combined employment salary is a member of the association for all
services with the single employing unit. If the person's teaching service comprises less
than 50 percent of the combined employment salary, the executive director must determine
whether all or none of the combined service is covered by the association; or
(4) a person who is not covered by the plans established under chapter 352D, 354A,
or 354B and who is employed by the Board of Trustees of the Minnesota State Colleges
and Universities system in an unclassified position as:
(i) a president, vice-president, or dean;
(ii) a manager or a professional in an academic or an academic support program
other than specified in item (i);
(iii) an administrative or a service support faculty position; or
(iv) a teacher or a research assistant.
(b) "Teacher" does not mean:
(1) a person who works for a school or institution as an independent contractor as
defined by the Internal Revenue Service;
(2) a person who renders part-time teaching service or who is a customized trainer
as defined by the Minnesota State Colleges and Universities system if (i) the service is
incidental to the regular nonteaching occupation of the person; and (ii) the employer
stipulates annually in advance that the part-time teaching service or customized training
service will not exceed 300 hours in a fiscal year and retains the stipulation in its records;
and (iii) the part-time teaching service or customized training service actually does not
exceed 300 hours in a fiscal year; or
(3) a person exempt from licensure under section 122A.30.

    Sec. 5. Minnesota Statutes 2012, section 354.05, subdivision 13, is amended to read:
    Subd. 13. Allowable service. "Allowable service" means:
    (1) any service rendered by a teacher for which on or before July 1, 1957, the
teacher's account in the retirement fund was credited by reason of employee contributions
in the form of salary deductions, payments in lieu of salary deductions, or in any other
manner authorized by Minnesota Statutes 1953, sections 135.01 to 135.13, as amended by
Laws 1955, chapters 361, 549, 550, 611, or;
    (2) any service rendered by a teacher for which on or before July 1, 1961, the teacher
elected to obtain credit for service by making payments to the fund pursuant to under
Minnesota Statutes 1980, section 354.09 and section 354.51, or;
    (3) any service rendered by a teacher after July 1, 1957, for any calendar month
when the member receives salary from which deductions are made, deposited and credited
in the fund, or;
    (4) any service rendered by a person after July 1, 1957, for any calendar month where
payments in lieu of salary deductions are made, deposited and credited into the fund as
provided in Minnesota Statutes 1980, section 354.09, subdivision 4, and section 354.53, or;
    (5) any service rendered by a teacher for which the teacher elected to obtain credit
for service by making payments to the fund pursuant to under Minnesota Statutes 1980,
section 354.09, subdivisions 1 and 4, sections 354.50, 354.51, Minnesota Statutes 1957,
section 135.41, subdivision 4, Minnesota Statutes 1971, section 354.09, subdivision 2, or
Minnesota Statutes, 1973 Supplement, section 354.09, subdivision 3, or;
    (6) both service during years of actual membership in the course of which
contributions were currently made and service in years during which the teacher was not a
member but for which the teacher later elected to obtain credit by making payments to the
fund as permitted by any law then in effect, or;
    (7) any service rendered where contributions were made and no credit was
established because of the limitations contained in Minnesota Statutes 1957, section
135.09, subdivision 2, as determined by the ratio between the amounts of money credited
to the teacher's account in a fiscal year and the maximum retirement contribution allowable
for that year, or;
    (8) MS 2002 [Expired]
    (9) a period of time during which a teacher was on strike without pay, not to exceed a
period of one year, if payment in lieu of salary deductions is made under section 354.72, or;
    (10) a period of service before July 1, 2006, that was properly credited as allowable
service by the Minneapolis Teachers Retirement Fund Association, and that was rendered
by a teacher as an employee of Special School District No. 1, Minneapolis, or by an
employee of the Minneapolis Teachers Retirement Fund Association who was a member
of the Minneapolis Teachers Retirement Fund Association by virtue of that employment,
who has not begun receiving an annuity or other retirement benefit from the former
Minneapolis Teachers Retirement Fund Association calculated in whole or in part on that
service before July 1, 2006, and who has not taken a refund of member contributions
related to that service unless the refund is repaid under section 354.50, subdivision 4.
Service as an employee of Special School District No. 1, Minneapolis, on or after July 1,
2006, is "allowable service" only as provided by this chapter.; or
(11) a period of service before July 1, 2015, that was properly credited as allowable
service by the Duluth Teachers Retirement Fund Association, and that was rendered
by a teacher as an employee of Independent School District No. 709, Duluth, or by an
employee of the Duluth Teachers Retirement Fund Association who was a member of the
Duluth Teachers Retirement Fund Association by virtue of that employment, who has not
begun receiving an annuity or other retirement benefit from the former Duluth Teachers
Retirement Fund Association calculated in whole or in part on that service before July
1, 2015, and who has not taken a refund of member contributions related to that service
unless the refund is repaid under section 354.50, subdivision 4. Service as an employee
of Independent School District No. 709, Duluth, on or after July 1, 2015, is "allowable
service" only as provided by this chapter.

    Sec. 6. Minnesota Statutes 2012, section 354.42, subdivision 2, is amended to read:
    Subd. 2. Employee contribution. (a) For a basic member, The employee
contribution to the fund is the following percentage of the member's salary:

		Period	Basic Program	Coordinated Program
		before July 1, 2011	9.0 percent
		from July 1, 2011, until June 30, 2012	9.5 percent
		from July 1, 2012, until June 30, 2013	10.0 percent
		from July 1, 2013, until June 30, 2014	10.5 percent	7.0 percent
		after June 30, 2014	11.0 percent	7.5 percent

(b) For a coordinated member, the employee contribution is the following percentage
of the member's salary:

		before July 1, 2011	5.5 percent
		from July 1, 2011, until June 30, 2012	6.0 percent
		from July 1, 2012, until June 30, 2013	6.5 percent
		from July 1, 2013, until June 30, 2014	7.0 percent
		after June 30, 2014	7.5 percent

(c) (b) When an employee contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid for each employer unit with the
first payroll cycle reported.
(d) (c) After June 30, 2015, if a contribution rate revision is required under
subdivisions 4a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must
be adjusted accordingly.
(e) (d) This contribution must be made by deduction from salary. Where any portion
of a member's salary is paid from other than public funds, the member's employee
contribution must be based on the entire salary received.

    Sec. 7. Minnesota Statutes 2012, section 354.42, subdivision 3, is amended to read:
    Subd. 3. Employer. (a) The regular employer contribution to the fund by Special
School District No. 1, Minneapolis, is an amount equal to the applicable following
percentage of salary of each coordinated member and the applicable following percentage
of salary of each basic member: specified in paragraph (c).

		Period	Coordinated Member			Basic Member
		before July 1, 2011		5.5 percent		9.5 percent
		from July 1, 2011, until June 30, 2012		6.0 percent		10.0 percent
		from July 1, 2012, until June 30, 2013		6.5 percent		10.5 percent
		from July 1, 2013, until June 30, 2014		7.0 percent		11.0 percent
		after June 30, 2014		7.5 percent		11.5 percent

The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or who is a basic member.
(b) The regular employer contribution to the fund by Independent School District
No. 709, Duluth, is an amount equal to the applicable percentage of salary of each old law
or new law coordinated member specified for the coordinated program in paragraph (c).
(b) (c) The employer contribution to the fund for every other employer is an amount
equal to the applicable following percentage of the salary of each coordinated member and
the applicable following percentage of the salary of each basic member:

		Period	Coordinated Member			Basic Member
		before July 1, 2011		5.5 percent		9.5 percent
		from July 1, 2011, until June 30, 2012		6.0 percent		10.0 percent
		from July 1, 2012, until June 30, 2013		6.5 percent		10.5 percent
		from July 1, 2013, until June 30, 2014		7.0 percent		11.0 percent
		after June 30, 2014		7.5 percent		11.5 percent

(c) (d) When an employer contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid for each employer unit with the
first payroll cycle reported.
(d) (e) After June 30, 2015, if a contribution rate revision is made under subdivisions
4a, 4b, and 4c, the employer contributions under paragraphs (a) and, (b), and (c) must
be adjusted accordingly.

    Sec. 8. Minnesota Statutes 2013 Supplement, section 354.436, is amended to read:
354.436 DIRECT STATE AID ON BEHALF OF THE FORMER
MINNEAPOLIS FIRST CLASS CITY TEACHERS RETIREMENT FUND
ASSOCIATION ASSOCIATIONS.
    Subdivision 1. Aid authorization. The state shall pay $12,954,000 to the Teachers
Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund
Association and shall pay $14,377,000 during fiscal year 2015 to the Teachers Retirement
Association for the credit of the Duluth Teachers Retirement Fund Association and, after
fiscal year 2015, shall pay $14,377,000 on behalf of the Duluth Teachers Retirement
Fund Association.
    Subd. 2. Aid appropriation. The commissioner of management and budget shall
pay the aid amounts under subdivision 1 annually on October 1. The amount required
is appropriated annually from the general fund to the commissioner of management and
budget.
    Subd. 3. Aid expiration. The aid amounts specified in this section terminates
terminate and this section expires on the October 1 next following the later of the
following dates: (1) when the current assets of the Teachers Retirement Association fund
equal or exceed the actuarial accrued liabilities of the fund as determined in the most
recent actuarial valuation report for the Teachers Retirement Association fund by the
actuary retained under section 356.214, or on the established date for full funding under
section 356.215, subdivision 11, whichever occurs earlier; or (2) when the member and
employer contribution rates are first determined to be eligible for a reduction under section
354.42, subdivisions 4a, 4b, 4c, and 4d.

    Sec. 9. Minnesota Statutes 2013 Supplement, section 354.44, subdivision 6, is
amended to read:
    Subd. 6. Computation of formula program retirement annuity. (a) The formula
retirement annuity must be computed in accordance with the applicable provisions of the
formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
section 354.05, subdivision 13a, for the period of the member's formula service credit.
    (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
became a member of the association or a member of a pension fund listed in section
356.30, subdivision 3 , before July 1, 1989, unless paragraph (d), in conjunction with
paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
average salary as defined in section 354.05, subdivision 13a, multiplied by the following
percentages per year of formula service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled for service rendered before July 1, 2006:

		Period		Coordinated Member		Basic Member
		Each year of service during first ten		1.2 percent per year		2.2 percent per year
		Each year of service thereafter		1.7 percent per year		2.7 percent per year

    For service rendered on or after July 1, 2006, by a member other than a member
who was a member of the former Duluth Teachers Retirement Fund Association between
January 1, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a
member who was a member of the former Duluth Teachers Retirement Fund Association
between January 1, 2013, and June 30, 2015, the average salary as defined in section
354.05 , subdivision 13a, multiplied by the following percentages per year of service credit,
determines the amount the annuity to which the member qualifying therefor is entitled:

		Period		Coordinated Member		Basic Member
		Each year of service during first ten		1.4 percent per year		2.2 percent per year
		Each year of service after ten years of service		1.9 percent per year		2.7 percent per year

    (c)(i) This paragraph applies only to a person who first became a member of the
association or a member of a pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in
conjunction with this paragraph than when calculated under paragraph (d), in conjunction
with paragraph (e).
    (ii) Where any member retires prior to normal retirement age under a formula
annuity, the member shall be paid a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
that the member is under normal retirement age at the time of retirement except that for
any member who has 30 or more years of allowable service credit, the reduction shall be
applied only for each month that the member is under age 62.
    (iii) Any member whose attained age plus credited allowable service totals 90 years
is entitled, upon application, to a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b), without any reduction by reason of early retirement.
    (d) This paragraph applies to a member who has become at least 55 years old and
first became a member of the association after June 30, 1989, and to any other member
who has become at least 55 years old and whose annuity amount when calculated under
this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
salary, as defined in section 354.05, subdivision 13a, multiplied by 2.7 percent for each
year of service for a basic member determines the amount of the retirement annuity to
which the basic member is entitled. The annuity of a basic member who was a member of
the former Minneapolis Teachers Retirement Fund Association as of June 30, 2006, must
be determined according to the annuity formula under the articles of incorporation of the
former Minneapolis Teachers Retirement Fund Association in effect as of that date. For a
coordinated member, the average salary, as defined in section 354.05, subdivision 13a,
multiplied by 1.7 percent for each year of service rendered before July 1, 2006, and by 1.9
percent for each year of service rendered on or after July 1, 2006, for a member other than
a member who was a member of the former Duluth Teachers Retirement Fund Association
between January 1, 2006, and June 30, 2015, and by 1.9 percent for each year of service
rendered on or after July 1, 2013, for a member of the former Duluth Teachers Retirement
Fund Association between January 1, 2013, and June 30, 2015, determines the amount of
the retirement annuity to which the coordinated member is entitled.
    (e) This paragraph applies to a person who has become at least 55 years old and first
becomes a member of the association after June 30, 1989, and to any other member who
has become at least 55 years old and whose annuity is higher when calculated under
paragraph (d) in conjunction with this paragraph than when calculated under paragraph
(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
before the normal retirement age shall be paid the normal annuity provided in paragraph
(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that
would be payable to the employee if the employee deferred receipt of the annuity and the
annuity amount were augmented at an annual rate of three percent compounded annually
from the day the annuity begins to accrue until the normal retirement age if the employee
became an employee before July 1, 2006, and at 2.5 percent compounded annually if the
employee becomes an employee after June 30, 2006. Except in regards to section 354.46,
this paragraph remains in effect until June 30, 2015.
(f) After June 30, 2020, this paragraph applies to a person who has become at least
55 years old and first becomes a member of the association after June 30, 1989, and to any
other member who has become at least 55 years old and whose annuity is higher when
calculated under paragraph (d) in conjunction with this paragraph than when calculated
under paragraph (b) in conjunction with paragraph (c). An employee who retires under
the formula annuity before the normal retirement age is entitled to receive the normal
annuity provided in paragraph (d). For a person who is at least age 62 or older and has at
least 30 years of service, the annuity must be reduced by an early reduction factor of six
percent per year of the annuity that would be payable to the employee if the employee
deferred receipt of the annuity and the annuity amount were augmented at an annual rate
of three percent compounded annually from the day the annuity begins to accrue until the
normal retirement age if the employee became an employee before July 1, 2006, and at 2.5
percent compounded annually if the employee became an employee after June 30, 2006.
For a person who is not at least age 62 or older and does not have at least 30 years of
service, the annuity would be reduced by an early reduction factor of four percent per year
for ages 55 through 59 and seven percent per year of the annuity that would be payable
to the employee if the employee deferred receipt of the annuity and the annuity amount
were augmented at an annual rate of three percent compounded annually from the day
the annuity begins to accrue until the normal retirement age if the employee became an
employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
became an employee after June 30, 2006.
(g) After June 30, 2015, and before July 1, 2020, for a person who would have
a reduced retirement annuity under either paragraph (e) or (f) if they were applicable,
the employee is entitled to receive a reduced annuity which must be calculated using
a blended reduction factor augmented monthly by 1/60 of the difference between the
reduction required under paragraph (e) and the reduction required under paragraph (f).
    (h) No retirement annuity is payable to a former employee with a salary that exceeds
95 percent of the governor's salary unless and until the salary figures used in computing
the highest five successive years average salary under paragraph (a) have been audited by
the Teachers Retirement Association and determined by the executive director to comply
with the requirements and limitations of section 354.05, subdivisions 35 and 35a.

    Sec. 10. [354.73] RETIREMENT COVERAGE RELATED TO THE FORMER
DULUTH TEACHERS RETIREMENT FUND ASSOCIATION.
    Subdivision 1. Application. This section applies to the retirement coverage of
members of the former Duluth Teachers Retirement Fund Association transferred to the
Teachers Retirement Association by section 46.
    Subd. 2. Teachers Retirement Association as successor in interest. The Teachers
Retirement Association is the successor in interest to all claims which the former Duluth
Teachers Retirement Fund Association may have or may have been able to assert against
any person on June 30, 2015, and is the successor in interest to all claims which could
have been asserted against the former Duluth Teachers Retirement Fund Association,
subject to the following:
(1) the Teachers Retirement Association is not liable for any claim against the
Duluth Teachers Retirement Fund Association, its former board or board members, which
is founded upon a claim of breach of fiduciary duty, where the act or acts constituting the
claimed breach were not done in good faith;
(2) the Teachers Retirement Association may assert any applicable defense to
any claim in any judicial or administrative proceeding that the former Duluth Teachers
Retirement Fund Association or its board would otherwise have been entitled to assert;
(3) the Teachers Retirement Association may assert any applicable defense that it
may assert in its capacity as a statewide agency; and
(4) the Teachers Retirement Association shall indemnify any former fiduciary of the
Duluth Teachers Retirement Fund Association consistent with section 356A.11.
    Subd. 3. Benefit calculation. (a) For every deferred, inactive, disabled, and
retired member of the Duluth Teachers Retirement Fund Association transferred under
subdivision 1, and the survivors of these members, annuities or benefits earned before July
1, 2015, other than future postretirement adjustments, must be calculated and paid by the
Teachers Retirement Association under the laws, articles of incorporation, and bylaws of
the former Duluth Teachers Retirement Fund Association that were in effect relative to
the person on the date of the person's termination of active service covered by the former
Duluth Teachers Retirement Fund Association.
(b) Former Duluth Teachers Retirement Fund Association members who retired
before July 1, 2015, must receive postretirement adjustments after January 1, 2015, only
as provided in section 356.415. All other benefit recipients of the former Duluth Teachers
Retirement Fund Association must receive postretirement adjustments after December 31,
2015, only as provided in section 356.415.
(c) This consolidation does not impair or diminish benefits for an active, deferred,
or retired member or a survivor of an active, deferred, or retired member under the
former Duluth Teachers Retirement Fund Association in existence at the time of the
consolidation, except that any future postretirement adjustments must be paid after July 1,
2015, in accordance with paragraph (b), and all benefits based on service on or after July
1, 2015, must be determined only by laws governing the Teachers Retirement Association.

    Sec. 11. Minnesota Statutes 2012, section 354A.011, subdivision 11, is amended to read:
    Subd. 11. Coordinated member. "Coordinated member" means any member of the
teachers retirement fund association who is covered by any agreement or modification
made between the state and the Secretary of Health, Education and Welfare making the
provisions of the federal Old Age, Survivors and Disability Insurance Act applicable
to certain teachers except in the case of a member of the Duluth Teachers Retirement
Fund Association, in which it means additionally that the member either first became a
member prior to July 1, 1981, and elected to be covered by the new law coordinated
program of the Duluth Teachers Retirement Fund Association or first became a member
on or subsequent to July 1, 1981.

    Sec. 12. Minnesota Statutes 2012, section 354A.011, subdivision 15a, is amended to
read:
    Subd. 15a. Normal retirement age. "Normal retirement age" means age 65 for a
person who first became a member of the coordinated program of the St. Paul Teachers
Retirement Fund Association or the new law coordinated program of the Duluth Teachers
Retirement Fund Association or a member of a pension fund listed in section 356.30,
subdivision 3 , before July 1, 1989. For a person who first became a member of the
coordinated program of the St. Paul Teachers Retirement Fund Association or the new law
coordinated program of the Duluth Teachers Retirement Fund Association after June 30,
1989, normal retirement age means the higher of age 65 or retirement age, as defined in
United States Code, title 42, section 416(l), as amended, but not to exceed age 66. For a
person who is a member of the basic program of the St. Paul Teachers Retirement Fund
Association or the old law coordinated program of the Duluth Teachers Retirement Fund
Association, normal retirement age means the age at which a teacher becomes eligible for
a normal retirement annuity computed upon meeting the age and service requirements
specified in the applicable provisions of the articles of incorporation or bylaws of the
respective teachers retirement fund association.

    Sec. 13. Minnesota Statutes 2012, section 354A.011, subdivision 27, is amended to read:
    Subd. 27. Teacher. (a) "Teacher" means any person who renders service for a public
school district, other than a charter school, located in the corporate limits of Duluth or
St. Paul, as any of the following:
(1) a full-time employee in a position for which a valid license from the state
Department of Education is required;
(2) an employee of the teachers retirement fund association located in the city of the
first class St. Paul;
(3) a part-time employee in a position for which a valid license from the state
Department of Education is required; or
(4) a part-time employee in a position for which a valid license from the state
Department of Education is required who also renders other nonteaching services for the
school district, unless the board of trustees of the teachers retirement fund association
determines that the combined employment is on the whole so substantially dissimilar to
teaching service that the service may not be covered by the association.
(b) The term does not mean any person who renders service in the school district
as any of the following:
(1) an independent contractor or the employee of an independent contractor;
(2) an employee who is a full-time teacher covered by the Teachers Retirement
Association or by another teachers retirement fund association established pursuant to
this chapter or under chapter 354;
(3) an employee who is exempt from licensure pursuant to section 122A.30;
(4) an employee who is a teacher in a technical college located in a city of the first
class unless the person elects coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2;
(5) a teacher employed by a charter school, irrespective of the location of the
school; or
(6) an employee who is a part-time teacher in a technical college in a the city of the
first class St. Paul and who has elected coverage by the applicable first class city teacher
retirement fund association under section 354B.21, subdivision 2, but (i) the teaching
service is incidental to the regular nonteaching occupation of the person; (ii) the applicable
technical college stipulates annually in advance that the part-time teaching service will not
exceed 300 hours in a fiscal year; and (iii) the part-time teaching actually does not exceed
300 hours in the fiscal year to which the certification applies.

    Sec. 14. Minnesota Statutes 2012, section 354A.021, subdivision 1, is amended to read:
    Subdivision 1. Establishment. There is established a teachers retirement fund
association in each of the cities city of Duluth and St. Paul. The associations shall be
association is known respectively as the "Duluth Teachers Retirement Fund Association"
and the "St. Paul Teachers Retirement Fund Association." Each The association shall be
is a continuation of the teachers retirement fund association with the same corporate
name established pursuant to under the authorization contained in Laws 1909, chapter
343, section 1.

    Sec. 15. [354A.022] AUTHORIZATION TO CERTIFY FUNDS TO STATE
BOARD OF INVESTMENT.
    Subdivision 1. Certification of funds to State Board of Investment. The chief
administrative officer of the Duluth Teachers Retirement Fund Association, from time
to time, may certify to the State Board of Investment those portions of the assets of the
retirement plan that are not needed for administrative expenses or benefit payments.
Assets certified to the State Board of Investment must be invested under sections 11A.14
and 11A.23. The chief administrative officer of the Duluth Teachers Retirement Fund
Association may certify assets for withdrawal from the State Board of Investment only
to make benefit payments or to pay administrative expenses or investment expenses of
existing direct real estate holdings or assets that are noncompliant with State Board of
Investment objectives or limitations.
    Subd. 2. Investment of certified funds. Assets certified to the State Board of
Investment are deemed to be from a covered retirement fund required to be invested by
the State Board of Investment under section 11A.23.
    Subd. 3. Expiration. This section expires June 30, 2015, if the consolidation
provisions receive the local approvals in section 49 and all other requirements of section
49 are met.

    Sec. 16. Minnesota Statutes 2012, section 354A.092, is amended to read:
354A.092 SABBATICAL LEAVE.
Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association or any teacher in the new law coordinated program of the Duluth Teachers
Retirement Fund Association who is granted a sabbatical leave shall be is entitled to
receive allowable service credit in the applicable association for periods of sabbatical
leave. To obtain the service credit, the teacher on sabbatical leave shall make an employee
contribution to the applicable association. No teacher shall be is entitled to receive more
than three years of allowable service credit pursuant to under this section for a period or
periods of sabbatical leave during any ten consecutive fiscal or calendar years, whichever is
the applicable plan year for the teachers retirement fund association. If the teacher granted a
sabbatical leave makes the employee contribution for a period of sabbatical leave pursuant
to under this section, the employing unit shall make an employer contribution on behalf of
the teacher to the applicable association for that period of sabbatical leave in the manner
described in section 354A.12, subdivision 2a. The employee and employer contributions
shall must be in an amount equal to the employee and employer contribution rates in effect
for other active members of the association covered by the same program applied to a salary
figure equal to the teacher's actual covered salary for the plan year immediately preceding
the sabbatical leave period. Payment of the employee contribution authorized pursuant
to under this section shall must be made by the teacher on or before June 30 of year
next following the year in which the sabbatical leave terminated and shall must be made
without interest. For sabbatical leaves taken after June 30, 1986, the required employer
contributions shall must be paid by the employing unit within 30 days after notification by
the association of the amount due. If the employee contributions for the sabbatical leave
period are less than an amount equal to the applicable contribution rate applied to a salary
figure equal to the teacher's actual covered salary for the plan year immediately preceding
the sabbatical leave period, service credit shall must be prorated. The prorated service
credit shall must be determined by the ratio between the amount of the actual payment
which was made and the full contribution amount payable pursuant to under this section.

    Sec. 17. Minnesota Statutes 2012, section 354A.093, subdivision 1, is amended to read:
    Subdivision 1. Eligibility. Any teacher in the coordinated program of the St. Paul
Teachers Retirement Fund Association or any teacher in the new law coordinated program
of the Duluth Teachers Retirement Fund Association who is absent from employment by
reason of service in the uniformed services as defined in United States Code, title 38,
section 4303(13) and who returns to the employer providing active teaching service upon
discharge from uniformed service within the time frames required under United States
Code, title 38, section 4312(e), may receive allowable service credit in the applicable
association for all or a portion of the period of uniformed service, provided that the teacher
did not separate from uniformed service with a dishonorable or bad conduct discharge
or under other than honorable conditions.

    Sec. 18. Minnesota Statutes 2012, section 354A.096, is amended to read:
354A.096 MEDICAL LEAVE.
Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association or the new law coordinated program of the Duluth Teachers Retirement Fund
Association who is on an authorized medical leave of absence and subsequently returns to
teaching service is entitled to receive allowable service credit, not to exceed one year, for
the period of leave, upon making the prescribed payment to the fund. This payment must
include the required employee and employer contributions at the rates specified in section
354A.12 , subdivisions 1 and 2a, as applied to the member's average full-time monthly
salary rate on the date the leave of absence commenced plus annual interest at the rate of
8.5 percent per year from the end of the fiscal year during which the leave terminates to the
end of the month during which payment is made. The member must pay the total amount
required unless the employing unit, at its option, pays the employer contributions. The total
amount required must be paid by the end of the fiscal year following the fiscal year in which
the leave of absence terminated or before the member retires, whichever is earlier. Payment
must be accompanied by a copy of the resolution or action of the employing authority
granting the leave and the employing authority, upon granting the leave, must certify the
leave to the association in a manner specified by the executive director. A member may not
receive more than one year of allowable service credit during any fiscal year by making
payment under this section. A member may not receive disability benefits under section
354A.36 and receive allowable service credit under this section for the same period of time.

    Sec. 19. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 1, is
amended to read:
    Subdivision 1. Employee contributions. (a) The contribution required to be paid
by each member of a the St. Paul Teachers Retirement Fund Association is the percentage
of total salary specified below for the applicable association and program:

		Association and Program	Percentage of Total Salary
	Duluth Teachers Retirement Fund Association
		old law and new law
		coordinated programs
		before July 1, 2013	6.5 percent
		effective July 1, 2013	7.0 percent
		effective July 1, 2014	7.5 percent
	St. Paul Teachers Retirement Fund Association
		basic program after June 30, 2012	8.5 percent
		basic program after June 30, 2013	8.75 percent
		basic program after June 30, 2014	9.0 percent
		basic program after June 30, 2015	9.5 percent
		basic program after June 30, 2016	10.0 percent
		coordinated program after June 30, 2012	6.0 percent
		coordinated program after June 30, 2013	6.25 percent
		coordinated program after June 30, 2014	6.5 percent
		coordinated program after June 30, 2015	7.0 percent
		coordinated program after June 30, 2016	7.5 percent

(b) Contributions shall must be made by deduction from salary and must be remitted
directly to the respective St. Paul Teachers Retirement Fund Association at least once
each month.
(c) When an employee contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid by the employer with the first
payroll cycle reported.

    Sec. 20. Minnesota Statutes 2012, section 354A.12, subdivision 2, is amended to read:
    Subd. 2. Retirement contribution levy disallowed. Except as provided in
section 423A.02, subdivision 3, with respect to Independent School District No. 625,
notwithstanding any law to the contrary, levies for the St. Paul Teachers Retirement Fund
associations in the cities of Duluth and St. Paul Association, including levies for any
employer Social Security taxes for teachers covered by the Duluth Teachers Retirement
Fund Association or the St. Paul Teachers Retirement Fund Association, are disallowed.

    Sec. 21. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 2a,
is amended to read:
    Subd. 2a. Employer regular and additional contributions. (a) The employing
units shall make the following employer contributions to the teachers retirement fund
associations association:
(1) for any coordinated member of one of the following St. Paul Teachers
Retirement Fund associations in a city of the first class Association, the employing unit
shall make a regular employer contribution to the respective retirement fund association in
an amount equal to the designated percentage of the salary of the coordinated member
as provided below:

	Duluth Teachers Retirement Fund Association
		before July 1, 2013	6.79 percent
		effective July 1, 2013	7.29 percent
		effective July 1, 2014	7.50 percent
	St. Paul Teachers Retirement Fund Association
		after June 30, 2012	5.0 percent
		after June 30, 2013	5.25 percent
		after June 30, 2014	5.5 percent
		after June 30, 2015	6.0 percent
		after June 30, 2016	6.25 percent
		after June 30, 2017	6.5 percent

(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

		after June 30, 2012	8.5 percent of salary
		after June 30, 2013	8.75 percent of salary
		after June 30, 2014	9.0 percent of salary
		after June 30, 2015	9.5 percent of salary
		after June 30, 2016	9.75 percent of salary
		after June 30, 2017	10.0 percent of salary

(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make an additional employer contribution to the respective fund in
an amount equal to 3.64 percent of the salary of the basic member;
(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to the applicable percentage 3.84 percent of the coordinated member's
salary, as provided below:.

St. Paul Teachers Retirement Fund Association

3.84 percent

(b) The regular and additional employer contributions must be remitted directly to
the respective St. Paul Teachers Retirement Fund Association at least once each month.
Delinquent amounts are payable with interest under the procedure in subdivision 1a.
(c) Payments of regular and additional employer contributions for school district
or technical college employees who are paid from normal operating funds must be made
from the appropriate fund of the district or technical college.
(d) When an employer contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid by the employer with the first
payroll cycle reported.

    Sec. 22. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3a,
is amended to read:
    Subd. 3a. Special direct state aid to first class city teachers retirement fund
associations. (a) The state shall pay $346,000 as special direct state aid to the Duluth
Teachers Retirement Fund Association and $2,827,000 to the St. Paul Teachers Retirement
Fund Association.
    (b) The aids aid under this subdivision are is payable October 1 annually. The
commissioner of management and budget shall pay the aids aid specified in this
subdivision. The amounts amount required are is appropriated annually from the general
fund to the commissioner of management and budget.

    Sec. 23. Minnesota Statutes 2012, section 354A.31, subdivision 1, is amended to read:
    Subdivision 1. Age and service requirements. Any coordinated member or former
coordinated member of the Duluth Teachers Retirement Fund Association or of the St.
Paul Teachers Retirement Fund Association who has ceased to render teaching service for
the Independent School District in which the teachers retirement fund association exists
No. 625, who is vested and who has either attained the age of at least 55 years or received
credit for not less than 30 years of allowable service regardless of age, shall be is entitled
upon written application to a retirement annuity.

    Sec. 24. Minnesota Statutes 2012, section 354A.32, subdivision 1, is amended to read:
    Subdivision 1. Optional forms generally. The board of the St. Paul Teachers
Retirement Fund Association shall establish for the coordinated program and the board
of the Duluth Teachers Retirement Fund Association shall establish for the new law
coordinated program an optional retirement annuity which shall must take the form of
a joint and survivor annuity. Each The board may also, in its discretion, establish an
optional annuity which shall may take the form of an annuity payable for a period certain
and for life thereafter. Each The board shall also establish an optional retirement annuity
that guarantees payment of the balance of the annuity recipient's accumulated deductions
to a designated beneficiary upon the death of the annuity recipient. Except as provided in
subdivision 1a, the optional annuity forms shall must be the actuarial equivalent of the
normal forms provided in section 354A.31. In establishing these optional annuity forms,
the board shall obtain the written recommendation of the actuary retained under section
356.214 . The recommendation shall must be a part of the permanent records of the board.

    Sec. 25. Minnesota Statutes 2012, section 354A.35, subdivision 1, is amended to read:
    Subdivision 1. Death before retirement; refund. If a coordinated member or
former coordinated member dies prior to before retirement or prior to before the receipt
of any retirement annuity or other benefit payment which is or may be payable and a
surviving spouse optional annuity is not payable pursuant to under subdivision 2, a
refund shall must be paid to the person's surviving spouse, or if there is none, to the
person's designated beneficiary, or if there is none, to the legal representative of the
person's estate. For a coordinated member or former coordinated member of the St. Paul
Teachers Retirement Fund Association, the refund shall must be in an amount equal to the
person's accumulated employee contributions plus interest at the rate of six percent per
annum compounded annually. For a coordinated member or former coordinated member
of the Duluth Teachers Retirement Fund Association, the refund shall be in an amount
equal to the person's accumulated employee contributions plus interest at the rate of six
percent per annum compounded annually to July 1, 2010, and four percent per annum
compounded annually thereafter.

    Sec. 26. Minnesota Statutes 2012, section 354A.37, subdivision 3, is amended to read:
    Subd. 3. Computation of refund amount. A former coordinated member who
qualifies for a refund under subdivision 1 shall is entitled to receive a refund equal to the
amount of the former coordinated member's accumulated employee contributions with
interest at the rate of six percent per annum compounded annually to July 1, 2010, if the
person is a former member of the Duluth Teachers Retirement Fund Association, or to
July 1, 2011, if the person is a former member of the St. Paul Teachers Retirement Fund
Association, and four percent per annum compounded annually thereafter.

    Sec. 27. Minnesota Statutes 2012, section 354A.37, subdivision 4, is amended to read:
    Subd. 4. Certain refunds at normal retirement age. Any coordinated member
who has attained the normal retirement age with less than ten years of allowable service
credit and has terminated active teaching service shall be is entitled to a refund in lieu of a
proportionate annuity under section 356.32. The refund must be equal to the coordinated
member's accumulated employee contributions plus interest at the rate of six percent
compounded annually to July 1, 2010, if the person is a former member of the Duluth
Teachers Retirement Fund Association, or to July 1, 2011, if the person is a former
member of the St. Paul Teachers Retirement Fund Association, and four percent per
annum compounded annually thereafter.

    Sec. 28. Minnesota Statutes 2012, section 354A.39, is amended to read:
354A.39 SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.
Any person who has been a member of the Minnesota State Retirement System, the
Public Employees Retirement Association including the Public Employees Retirement
Association Police and Fire Fund, the Teachers Retirement Association, the Minnesota
State Patrol Retirement Association, the legislators retirement plan, the constitutional
officers retirement plan, the Duluth Teachers Retirement Fund Association new law
coordinated program, the St. Paul Teachers Retirement Fund Association coordinated
program, or any other public employee retirement system in the state of Minnesota
having a like provision, but excluding all other funds providing retirement benefits for
police officers or firefighters, is entitled, when qualified, to an annuity from each fund if
the person's total allowable service in all of the funds or in any two or more of the funds
totals three or more years, provided that no portion of the allowable service upon which
the retirement annuity from one fund is based is used again in the computation for a
retirement annuity from another fund and provided further that the person has not taken a
refund from any of funds or associations since the person's membership in the fund or
association has terminated. The annuity from each fund or association must be determined
by the appropriate provisions of the law governing each fund or association, except that
the requirement that a person must have at least three years of allowable service in the
respective fund or association does not apply for the purposes of this section, provided
that the aggregate service in two or more of these funds equals three or more years.

    Sec. 29. Minnesota Statutes 2012, section 354A.41, is amended to read:
354A.41 ADMINISTRATION OF COORDINATED PROGRAM.
    Subdivision 1. Administrative provisions. The provisions of the articles of
incorporation and bylaws of the St. Paul Teachers Retirement Fund Association relating
to the administration of the fund shall govern the administration of the coordinated and
basic programs and the provisions of the articles of incorporation and bylaws of the
Duluth Teachers Retirement Fund Association relating to the administration of the fund
shall govern the administration of the new law coordinated program in instances where the
administrative provisions are not inconsistent with the provisions of sections 354A.31 to
354A.41 , including but not limited to provisions relating to the composition and function
of the board of trustees, the investment of assets of the St. Paul Teachers Retirement Fund
Association, and the definition of the plan year. The administrative provisions in the
articles of incorporation and the bylaws of the Minneapolis Teachers Retirement Fund
Association pertaining to the granting of pension benefits of the basic and coordinated
programs are no longer in effect after June 30, 2006, and the administrative provisions of
the Duluth Teachers Retirement Fund Association pertaining to retirement benefits of the
old law coordinated program are no longer in effect after June 30, 2015.
    Subd. 2. Actuarial valuations. In any actuarial valuation of the St. Paul Teachers
Retirement Fund Association, or the Duluth Teachers Retirement Fund Association under
section 356.215 prepared by the actuary retained under section 356.214 or supplemental
actuarial valuation prepared by an approved actuary retained by the St. Paul Teachers
Retirement Fund Association, there shall must be included a finding of the condition of the
fund showing separately the basic and coordinated programs or the old law coordinated
and new law coordinated programs, as appropriate. The finding shall must include the level
normal cost and the applicable employee and employer contribution rates for each program.

    Sec. 30. Minnesota Statutes 2012, section 354B.21, subdivision 3a, is amended to read:
    Subd. 3a. Plan coverage and election; certain past service technical college
faculty. (a) Notwithstanding subdivision 3, if an employee of the board was employed in
a faculty position in a technical college on June 30, 1997, with coverage by the Teachers
Retirement Association, the employee retains that coverage. If the employee was a
technical college faculty member on June 30, 1995, covered by a first class city teacher
retirement fund established under chapter 354A, the retirement coverage continues with
the Duluth Teachers Retirement Fund Association or the St. Paul Teachers Retirement
Fund Association, whichever is applicable. If the person was a technical college faculty
member on June 30, 1995, covered by the former Minneapolis Teachers Retirement Fund
Association or the former Duluth Teachers Retirement Fund Association, the Teachers
Retirement Association shall provide coverage.
(b) An employee under paragraph (a) who has coverage by a first class city
teacher the St. Paul Teachers Retirement Fund Association retains that coverage for the
duration of the person's employment by the board unless, within one year of a change in
employment within the Minnesota State Colleges and Universities system, the person
elects the individual retirement account plan for all future employment by the board.
The election is irrevocable.

    Sec. 31. Minnesota Statutes 2012, section 355.01, subdivision 2c, is amended to read:
    Subd. 2c. Duluth teacher. "Duluth teacher" means a person employed by
Independent School District No. 709, Duluth, who holds a position covered by the Duluth
Teachers Retirement Fund Association established under chapter 354A section 354.73
and section 46.

    Sec. 32. Minnesota Statutes 2013 Supplement, section 356.20, subdivision 2, is
amended to read:
    Subd. 2. Covered public pension plans and funds. This section applies to the
following public pension plans:
    (1) the general state employees retirement plan of the Minnesota State Retirement
System;
    (2) the general employees retirement plan of the Public Employees Retirement
Association;
    (3) the Teachers Retirement Association;
    (4) the State Patrol retirement plan;
    (5) the St. Paul Teachers Retirement Fund Association;
    (6) the Duluth Teachers Retirement Fund Association;
    (7) (6) the University of Minnesota faculty retirement plan;
    (8) (7) the University of Minnesota faculty supplemental retirement plan;
    (9) (8) the judges retirement fund;
    (10) (9) the Bloomington Fire Department Relief Association;
    (11) (10) a volunteer firefighter relief association governed by section 424A.091;
    (12) (11) the public employees police and fire plan of the Public Employees
Retirement Association;
    (13) (12) the correctional state employees retirement plan of the Minnesota State
Retirement System;
    (14) (13) the local government correctional service retirement plan of the Public
Employees Retirement Association; and
(15) (14) the voluntary statewide lump-sum volunteer firefighter retirement plan.

    Sec. 33. Minnesota Statutes 2013 Supplement, section 356.214, subdivision 1, is
amended to read:
    Subdivision 1. Actuary retention. (a) The governing board or managing or
administrative official of each public pension plan and retirement fund or plan enumerated
in paragraph (b) shall contract with an established actuarial consulting firm to conduct
annual actuarial valuations and related services. The principal from the actuarial
consulting firm on the contract must be an approved actuary under section 356.215,
subdivision 1 , paragraph (c).
    (b) Actuarial services must include the preparation of actuarial valuations and
related actuarial work for the following retirement plans:
    (1) the teachers retirement plan, Teachers Retirement Association;
    (2) the general state employees retirement plan, Minnesota State Retirement System;
    (3) the correctional employees retirement plan, Minnesota State Retirement System;
    (4) the State Patrol retirement plan, Minnesota State Retirement System;
    (5) the judges retirement plan, Minnesota State Retirement System;
    (6) the general employees retirement plan, Public Employees Retirement
Association, including the MERF division;
    (7) the public employees police and fire plan, Public Employees Retirement
Association;
    (8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
Association;
    (9) (8) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
Association;
    (10) (9) the legislators retirement plan, Minnesota State Retirement System; and
    (11) (10) the local government correctional service retirement plan, Public
Employees Retirement Association.
(c) The actuarial valuation for the legislators retirement plan must include a separate
calculation of total plan actuarial accrued liabilities due to constitutional officer coverage
under section 3A.17.
    (d) The contracts must require completion of the annual actuarial valuation
calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
as specified in section 356.215, and in conformity with the standards for actuarial work
adopted by the Legislative Commission on Pensions and Retirement.
    The contracts must require completion of annual experience data collection and
processing and a quadrennial published experience study for the plans listed in paragraph
(b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by
the commission. The experience data collection, processing, and analysis must evaluate
the following:
    (1) individual salary progression;
    (2) the rate of return on investments based on the current asset value;
    (3) payroll growth;
    (4) mortality;
    (5) retirement age;
    (6) withdrawal; and
    (7) disablement.
    (e) The actuary shall annually prepare a report to the governing or managing board
or administrative official and the legislature, summarizing the results of the actuarial
valuation calculations. The actuary shall include with the report any recommendations
concerning the appropriateness of the support rates to achieve proper funding of
the retirement plans by the required funding dates. The actuary shall, as part of the
quadrennial experience study, include recommendations on the appropriateness of the
actuarial valuation assumptions required for evaluation in the study.
    (f) If the actuarial gain and loss analysis in the actuarial valuation calculations
indicates a persistent pattern of sizable gains or losses, the governing or managing board
or administrative official shall direct the actuary to prepare a special experience study for a
plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), or (10), or (11), in the manner
provided for in the standards for actuarial work adopted by the commission.

    Sec. 34. Minnesota Statutes 2013 Supplement, section 356.215, subdivision 8, is
amended to read:
    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:
(1) select and ultimate interest rate assumption

	plan	ultimate preretirement interest rate assumption	ultimate postretirement interest rate assumption
	general state employees retirement plan	8.5%	6.0%
	correctional state employees retirement plan	8.5	6.0
	State Patrol retirement plan	8.5	6.0
	legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0.0	0.0
	judges retirement plan	8.5	6.0
	general public employees retirement plan	8.5	6.0
	public employees police and fire retirement plan	8.5	6.0
	local government correctional service retirement plan	8.5	6.0
	teachers retirement plan	8.5	6.0
	Duluth teachers retirement plan	8.5	8.5
	St. Paul teachers retirement plan	8.5	8.5

Except for the legislators retirement plan and the constitutional officers calculation
of total plan liabilities, the select preretirement interest rate assumption for the period
after June 30, 2012, through June 30, 2017, is 8.0 percent. Except for the legislators
retirement plan and the constitutional officers calculation of total plan liabilities, the select
postretirement interest rate assumption for the period after June 30, 2012, through June
30, 2017, is 5.5 percent, except for the Duluth teachers retirement plan and the St. Paul
teachers retirement plan, each with a select postretirement interest rate assumption for the
period after June 30, 2012, through June 30, 2017, of 8.0 percent.
(2) single rate preretirement and postretirement interest rate assumption

	plan	interest rate assumption
	Bloomington Fire Department Relief Association	6.0
	local monthly benefit volunteer firefighters relief associations	5.0

    (b) The actuarial valuation must use the applicable following single rate future salary
increase assumption, the applicable following modified single rate future salary increase
assumption, or the applicable following graded rate future salary increase assumption:
    (1) single rate future salary increase assumption

	plan	future salary increase assumption
	legislators retirement plan		5.0%
	judges retirement plan		3.0
	Bloomington Fire Department Relief Association		4.0

    (2) age-related future salary increase age-related select and ultimate future salary
increase assumption or graded rate future salary increase assumption

	plan	future salary increase assumption
	local government correctional service retirement plan	assumption CB
	Duluth teachers retirement plan	assumption A
	St. Paul teachers retirement plan	assumption BA

For plans other than the Duluth St. Paul
teachers retirement plan and the local
government correctional service retirement
plan, the select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result of
the designated integer minus T, where T is the
number of completed years of service, and is
added to the applicable future salary increase
assumption. The designated select period is
ten years and the designated integer is ten
for the Duluth Teachers Retirement Fund
Association and for the local government
correctional service retirement plan and 15
for the St. Paul Teachers Retirement Fund
Association. The designated percentage
rate is 0.2 percent for the St. Paul Teachers
Retirement Fund Association. The select
calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.
    The ultimate future salary increase assumption is:

	age	A	BA	CB
	16	6.00%	5.90%	9.00%
	17	6.00	5.90	9.00
	18	6.00	5.90	9.00
	19	6.00	5.90	9.00
	20	6.00	5.90	9.00
	21	6.00	5.90	8.75
	22	6.00	5.90	8.50
	23	6.00	5.85	8.25
	24	6.00	5.80	8.00
	25	6.00	5.75	7.75
	26	6.00	5.70	7.50
	27	6.00	5.65	7.25
	28	6.00	5.60	7.00
	29	6.00	5.55	6.75
	30	6.00	5.50	6.75
	31	6.00	5.45	6.50
	32	6.00	5.40	6.50
	33	6.00	5.35	6.50
	34	6.00	5.30	6.25
	35	6.00	5.25	6.25
	36	5.86	5.20	6.00
	37	5.73	5.15	6.00
	38	5.59	5.10	6.00
	39	5.45	5.05	5.75
	40	5.31	5.00	5.75
	41	5.18	4.95	5.75
	42	5.04	4.90	5.50
	43	4.90	4.85	5.25
	44	4.76	4.80	5.25
	45	4.63	4.75	5.00
	46	4.49	4.70	5.00
	47	4.35	4.65	5.00
	48	4.21	4.60	5.00
	49	4.08	4.55	5.00
	50	3.94	4.50	5.00
	51	3.80	4.45	5.00
	52	3.66	4.40	5.00
	53	3.53	4.35	5.00
	54	3.39	4.30	5.00
	55	3.25	4.25	4.75
	56	3.25	4.20	4.75
	57	3.25	4.15	4.50
	58	3.25	4.10	4.25
	59	3.25	4.05	4.25
	60	3.25	4.00	4.25
	61	3.25	4.00	4.25
	62	3.25	4.00	4.25
	63	3.25	4.00	4.25
	64	3.25	4.00	4.25
	65	3.25	4.00	4.00
	66	3.25	4.00	4.00
	67	3.25	4.00	4.00
	68	3.25	4.00	4.00
	69	3.25	4.00	4.00
	70	3.25	4.00	4.00

(3) service-related ultimate future salary increase assumption

	general state employees retirement plan of the Minnesota State Retirement System	assumption A
	general employees retirement plan of the Public Employees Retirement Association	assumption B
	Teachers Retirement Association	assumption C
	public employees police and fire retirement plan	assumption D
	State Patrol retirement plan	assumption E
	correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

	service length	A	B	C	D	E	F
	1	10.50%	12.03%	12.00%	13.00%	8.00%	6.00%
	2	8.10	8.90	9.00	11.00	7.50	5.85
	3	6.90	7.46	8.00	9.00	7.00	5.70
	4	6.20	6.58	7.50	8.00	6.75	5.55
	5	5.70	5.97	7.25	6.50	6.50	5.40
	6	5.30	5.52	7.00	6.10	6.25	5.25
	7	5.00	5.16	6.85	5.80	6.00	5.10
	8	4.70	4.87	6.70	5.60	5.85	4.95
	9	4.50	4.63	6.55	5.40	5.70	4.80
	10	4.40	4.42	6.40	5.30	5.55	4.65
	11	4.20	4.24	6.25	5.20	5.40	4.55
	12	4.10	4.08	6.00	5.10	5.25	4.45
	13	4.00	3.94	5.75	5.00	5.10	4.35
	14	3.80	3.82	5.50	4.90	4.95	4.25
	15	3.70	3.70	5.25	4.80	4.80	4.15
	16	3.60	3.60	5.00	4.80	4.65	4.05
	17	3.50	3.51	4.75	4.80	4.50	3.95
	18	3.50	3.50	4.50	4.80	4.35	3.85
	19	3.50	3.50	4.25	4.80	4.20	3.75
	20	3.50	3.50	4.00	4.80	4.05	3.75
	21	3.50	3.50	3.90	4.70	4.00	3.75
	22	3.50	3.50	3.80	4.60	4.00	3.75
	23	3.50	3.50	3.70	4.50	4.00	3.75
	24	3.50	3.50	3.60	4.50	4.00	3.75
	25	3.50	3.50	3.50	4.50	4.00	3.75
	26	3.50	3.50	3.50	4.50	4.00	3.75
	27	3.50	3.50	3.50	4.50	4.00	3.75
	28	3.50	3.50	3.50	4.50	4.00	3.75
	29	3.50	3.50	3.50	4.50	4.00	3.75
	30 or more	3.50	3.50	3.50	4.50	4.00	3.75

    (c) The actuarial valuation must use the applicable following payroll growth
assumption for calculating the amortization requirement for the unfunded actuarial
accrued liability where the amortization retirement is calculated as a level percentage
of an increasing payroll:

	plan	payroll growth assumption
	general state employees retirement plan of the Minnesota State Retirement System	3.75%
	correctional state employees retirement plan	3.75
	State Patrol retirement plan	3.75
	judges retirement plan	3.00
	general employees retirement plan of the Public Employees Retirement Association	3.75
	public employees police and fire retirement plan	3.75
	local government correctional service retirement plan	3.75
	teachers retirement plan	3.75
	Duluth teachers retirement plan	3.50
	St. Paul teachers retirement plan	4.00

    (d) The assumptions set forth in paragraphs (b) and (c) continue to apply, unless a
different salary assumption or a different payroll increase assumption:
    (1) has been proposed by the governing board of the applicable retirement plan;
    (2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and
    (3) has been approved or deemed approved under subdivision 18.

    Sec. 35. Minnesota Statutes 2013 Supplement, section 356.219, subdivision 8, is
amended to read:
    Subd. 8. Timing of reports. (a) For the Bloomington Fire Department Relief
Association and the volunteer firefighter relief associations, the information required
under this section must be submitted by the due date for reports required under section
69.051, subdivision 1 or 1a, as applicable. If a relief association satisfies the definition of
a fully invested plan under subdivision 1, paragraph (b), for the calendar year covered
by the report required under section 69.051, subdivision 1 or 1a, as applicable, the chief
administrative officer of the covered pension plan shall certify that compliance on a form
prescribed by the state auditor. The state auditor shall transmit annually to the State Board
of Investment a list or lists of covered pension plans which submitted certifications in
order to facilitate reporting by the State Board of Investment under paragraph (c).
(b) For the St. Paul Teachers Retirement Fund Association, the Duluth Teachers
Retirement Fund Association, and the University of Minnesota faculty supplemental
retirement plan, the information required under this section must be submitted to the state
auditor by June 1 of each year.
(c) The State Board of Investment, on behalf of pension funds specified in
subdivision 1, paragraph (c), must shall report information required under this section by
September 1 of each year.

    Sec. 36. Minnesota Statutes 2013 Supplement, section 356.30, subdivision 3, is
amended to read:
    Subd. 3. Covered plans. This section applies to the following retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;
(2) the correctional state employees retirement plan of the Minnesota State
Retirement System, established under chapter 352;
(3) the unclassified employees retirement program, established under chapter 352D;
(4) the State Patrol retirement plan, established under chapter 352B;
(5) the legislators retirement plan, established under chapter 3A, including
constitutional officers as specified in that chapter;
(6) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353, including the MERF division of the Public
Employees Retirement Association;
(7) the public employees police and fire retirement plan of the Public Employees
Retirement Association, established under chapter 353;
(8) the local government correctional service retirement plan of the Public
Employees Retirement Association, established under chapter 353E;
(9) the Teachers Retirement Association, established under chapter 354;
(10) the St. Paul Teachers Retirement Fund Association, established under chapter
354A; and
(11) the Duluth Teachers Retirement Fund Association, established under chapter
354A; and
(12) (11) the judges retirement fund, established by chapter 490.

    Sec. 37. Minnesota Statutes 2012, section 356.302, subdivision 7, is amended to read:
    Subd. 7. Covered retirement plans. This section applies to the following
retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;
(2) the unclassified state employees retirement program of the Minnesota State
Retirement System, established by chapter 352D;
(3) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353, including the MERF division of the Public
Employees Retirement Association;
(4) the Teachers Retirement Association, established by chapter 354;
(5) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
(6) (5) the St. Paul Teachers Retirement Fund Association, established by chapter
354A;
(7) (6) the state correctional employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;
(8) (7) the State Patrol retirement plan, established by chapter 352B;
(9) (8) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;
(10) (9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E; and
(11) (10) the judges retirement plan, established by chapter 490.

    Sec. 38. Minnesota Statutes 2012, section 356.303, subdivision 4, is amended to read:
    Subd. 4. Covered retirement plans. This section applies to the following
retirement plans:
(1) the legislators retirement plan, established by chapter 3A;
(2) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;
(3) the correctional state employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;
(4) the State Patrol retirement plan, established by chapter 352B;
(5) the elective state officers retirement plan, established by chapter 352C;
(6) the unclassified state employees retirement program, established by chapter 352D;
(7) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353, including the MERF division of the Public
Employees Retirement Association;
(8) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;
(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;
(10) the Teachers Retirement Association, established by chapter 354;
(11) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
(12) (11) the St. Paul Teachers Retirement Fund Association, established by chapter
354A; and
(13) (12) the judges retirement fund, established by chapter 490.

    Sec. 39. Minnesota Statutes 2012, section 356.32, subdivision 2, is amended to read:
    Subd. 2. Covered retirement plans. The provisions of this section apply to the
following retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;
(2) the correctional state employees retirement plan of the Minnesota State
Retirement System, established under chapter 352;
(3) the State Patrol retirement plan, established under chapter 352B;
(4) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353, including the MERF division of the Public
Employees Retirement Association;
(5) the public employees police and fire plan of the Public Employees Retirement
Association, established under chapter 353;
(6) the Teachers Retirement Association, established under chapter 354; and
(7) the Duluth Teachers Retirement Fund Association, established under chapter
354A; and
(8) (7) the St. Paul Teachers Retirement Fund Association, established under chapter
354A.

    Sec. 40. Minnesota Statutes 2013 Supplement, section 356.401, subdivision 3, is
amended to read:
    Subd. 3. Covered retirement plans. The provisions of this section apply to the
following retirement plans:
(1) the legislators retirement plan, established by chapter 3A, including constitutional
officers as specified in that chapter;
(2) the general state employees retirement plan of the Minnesota State Retirement
System, established by chapter 352;
(3) the correctional state employees retirement plan of the Minnesota State
Retirement System, established by chapter 352;
(4) the State Patrol retirement plan, established by chapter 352B;
(5) the unclassified state employees retirement program, established by chapter 352D;
(6) the general employees retirement plan of the Public Employees Retirement
Association, established by chapter 353, including the MERF division of the Public
Employees Retirement Association;
(7) the public employees police and fire plan of the Public Employees Retirement
Association, established by chapter 353;
(8) the public employees defined contribution plan, established by chapter 353D;
(9) the local government correctional service retirement plan of the Public
Employees Retirement Association, established by chapter 353E;
(10) the voluntary statewide lump-sum volunteer firefighter retirement plan,
established by chapter 353G;
(11) the Teachers Retirement Association, established by chapter 354;
(12) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
(13) (12) the St. Paul Teachers Retirement Fund Association, established by chapter
354A;
(14) (13) the individual retirement account plan, established by chapter 354B;
(15) (14) the higher education supplemental retirement plan, established by chapter
354C; and
(16) (15) the judges retirement fund, established by chapter 490.

    Sec. 41. Minnesota Statutes 2012, section 356.42, subdivision 3, is amended to read:
    Subd. 3. Covered retirement plans. The postretirement adjustment provided in
this section applies to the following retirement funds:
(1) the general employees retirement plans of the Public Employees Retirement
Association;
(2) the public employees police and fire plan of the Public Employees Retirement
Association;
(3) the teachers retirement association;
(4) the State Patrol retirement plan;
(5) the state employees retirement plan of the Minnesota State Retirement System;
and
(6) the St. Paul Teachers Retirement Fund Association established under chapter
354A; and.
(7) the Duluth Teachers Retirement Fund Association established under chapter
354A.

    Sec. 42. Minnesota Statutes 2012, section 356.465, subdivision 3, is amended to read:
    Subd. 3. Covered retirement plans. The provisions of this section apply to the
following retirement plans:
(1) the general state employees retirement plan of the Minnesota State Retirement
System established under chapter 352;
(2) the correctional state employees retirement plan of the Minnesota State
Retirement System established under chapter 352;
(3) the State Patrol retirement plan established under chapter 352B;
(4) the legislators retirement plan established under chapter 3A;
(5) the judges retirement plan established under chapter 490;
(6) the general employees retirement plan of the Public Employees Retirement
Association established under chapter 353, including the MERF division of the Public
Employees Retirement Association;
(7) the public employees police and fire plan of the Public Employees Retirement
Association established under chapter 353;
(8) the teachers retirement plan established under chapter 354;
(9) the Duluth Teachers Retirement Fund Association established under chapter
354A;
(10) (9) the St. Paul Teachers Retirement Fund Association established under
chapter 354A; and
(11) (10) the local government correctional service retirement plan of the Public
Employees Retirement Association established under chapter 353E.

    Sec. 43. Minnesota Statutes 2012, section 356.47, subdivision 3, is amended to read:
    Subd. 3. Payment. (a) Beginning one year after the reemployment withholding
period ends relating to the reemployment that gave rise to the limitation, and the filing of a
written application, the retired member is entitled to the payment, in a lump sum, of the
value of the person's amount under subdivision 2, plus annual compound interest. For the
general state employees retirement plan, the correctional state employees retirement plan,
the general employees retirement plan of the Public Employees Retirement Association,
the public employees police and fire retirement plan, the local government correctional
employees retirement plan, and the teachers retirement plan, the annual interest rate is
six percent from the date on which the amount was deducted from the retirement annuity
to the date of payment or until January 1, 2011, whichever is earlier, and no interest
after January 1, 2011. For the Duluth Teachers Retirement Fund Association, the annual
interest is six percent from the date on which the amount was deducted from the retirement
annuity to the date of payment or until June 30, 2010, whichever is earlier, and with
no interest accrual after June 30, 2010. For the St. Paul Teachers Retirement Fund
Association, the annual interest is the rate of six percent from the date that the amount was
deducted from the retirement annuity to the date of payment or June 30, 2011, whichever
is earlier, and with no interest accrual after June 30, 2011.
    (b) The written application must be on a form prescribed by the chief administrative
officer of the applicable retirement plan.
    (c) If the retired member dies before the payment provided for in paragraph (a) is
made, the amount is payable, upon written application, to the deceased person's surviving
spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
deceased person's estate.
    (d) In lieu of the direct payment of the person's amount under subdivision 2, on
or after the payment date under paragraph (a), if the federal Internal Revenue Code so
permits, the retired member may elect to have all or any portion of the payment amount
under this section paid in the form of a direct rollover to an eligible retirement plan as
defined in section 402(c) of the federal Internal Revenue Code that is specified by the
retired member. If the retired member dies with a balance remaining payable under this
section, the surviving spouse of the retired member, or if none, the deceased person's
designated beneficiary, or if none, the administrator of the deceased person's estate may
elect a direct rollover under this paragraph.

    Sec. 44. Minnesota Statutes 2012, section 356.99, subdivision 1, is amended to read:
    Subdivision 1. Definitions. (a) For purposes of this section, the terms in paragraphs
(b) to (e) have the meanings given them.
(b) "Chief administrative officer" means the person selected or elected by the
governing board of a covered pension plan with primary responsibility to administer the
covered pension plan, or that person's designee or representative.
(c) "Covered pension plan" means a plan enumerated in section 356.30, subdivision
3 , except clauses (3), (5), and (6).
(d) "Governing board" means the governing board of the Minnesota State Retirement
System, the Public Employees Retirement Association, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association, or the St. Paul Teachers
Retirement Fund Association.
(e) "Member" means an active plan member in a covered pension plan.

    Sec. 45. Minnesota Statutes 2013 Supplement, section 423A.02, subdivision 3, is
amended to read:
    Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the
difference between $5,720,000 and the current year amortization aid distributed under
subdivision 1 that is not distributed for any reason to a municipality must be distributed
by the commissioner of revenue according to this paragraph. The commissioner shall
distribute 50 60 percent of the amounts derived under this paragraph to the Teachers
Retirement Association, ten percent to the Duluth Teachers Retirement Fund Association,
and 40 percent to the St. Paul Teachers Retirement Fund Association to fund the unfunded
actuarial accrued liabilities of the respective funds. These payments must be made on July
15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or the Duluth
Teachers Retirement Fund Association becomes fully funded, the association's eligibility
for its portion of this aid ceases. Amounts remaining in the undistributed balance account
at the end of the biennium if aid eligibility ceases cancel to the general fund.
    (b) In order to receive amortization aid under paragraph (a), before June 30 annually
Independent School District No. 625, St. Paul, must make an additional contribution of
$800,000 each year to the St. Paul Teachers Retirement Fund Association.
    (c) Thirty percent of the difference between $5,720,000 and the current year
amortization aid under subdivision 1a that is not distributed for any reason to a
municipality must be distributed under section 69.021, subdivision 7, paragraph (d), as
additional funding to support a minimum fire state aid amount for volunteer firefighter
relief associations.

    Sec. 46. CONSOLIDATION OF DULUTH TEACHERS RETIREMENT FUND
ASSOCIATION.
    Subdivision 1. Membership transfer. All active, inactive, and retired members
of the Duluth Teachers Retirement Fund Association are transferred to the Teachers
Retirement Association and are no longer members of the Duluth Teachers Retirement
Fund Association as of July 1, 2015.
    Subd. 2. Teachers Retirement Association membership. A person first hired as a
teacher by Independent School District No. 709, Duluth, after June 30, 2015, and who is a
teacher as defined in Minnesota Statutes, section 354.05, subdivision 2, is a member of the
Teachers Retirement Association for the person's subsequent teaching service.
    Subd. 3. Service credit and liability transfer. All allowable service and salary
credit of the members and other individuals transferred under subdivision 1 as specified
in the records of the Duluth Teachers Retirement Fund Association as of June 30, 2015,
is allowable service credit under Minnesota Statutes, section 354.05, subdivision 13,
formula service credit under Minnesota Statutes, section 354.05, subdivision 25, and
salary credit under Minnesota Statutes, section 354.05, subdivision 35, for the Teachers
Retirement Association.
    Subd. 4. Transfer of records. On or before June 30, 2015, the chief administrative
officer of the Duluth Teachers Retirement Fund Association shall transfer all records and
documents relating to the funds and the benefit plans of the association to the executive
director of the Teachers Retirement Association. To the extent possible, original copies of
all records and documents must be transferred.
    Subd. 5. Transfer of assets. (a) On or before December 31, 2014, the chief
administrative officer of the Duluth Teachers Retirement Fund Association shall transfer
to the State Board of Investment for investment under Minnesota Statutes, section 11A.14,
the entire assets of the special retirement fund, except for direct real estate holdings, of the
Duluth Teachers Retirement Fund Association.
(b) By August 1, 2014, the chief administrative officer of the Duluth Teachers
Retirement Fund Association must provide to the State Board of Investment a list of
assets that are intended to be transferred.
(c) The executive director of the State Board of Investment shall review the assets
and determine which assets are not in compliance with the requirements and limitations
set forth in Minnesota Statutes, sections 11A.09, 11A.14, 11A.23, and 11A.24, or are
not appropriate for retention under the established investment objectives of the State
Board of Investment. Within 30 days of receipt of the list of assets that are intended to
be transferred, the executive director of the State Board of Investment shall provide the
chief administrative officer of the Duluth Teachers Retirement Fund Association with a
list of assets that are acceptable for transfer and a list of assets that are noncompliant or
inappropriate. Acceptable assets, including cash, must be transferred at market value,
and transfers may begin upon the transfer of legal title and notification by the chief
administrative officer of the Duluth Teachers Retirement Fund Association to the State
Board of Investment.
(d) Assets deemed to be noncompliant or inappropriate must be retained by the
Duluth Teachers Retirement Fund Association. Within 30 days of receipt of the list of
noncompliant or inappropriate assets, the chief administrative officer of the Duluth
Teachers Retirement Fund Association must provide the executive director of the State
Board of Investment with evidence that the chief administrative officer of the Duluth
Teachers Retirement Fund Association is taking action to convert noncompliant or
inappropriate assets to acceptable assets.
(e) Beginning January 1, 2015, the executive director of the State Board of
Investment is authorized to direct the process of transferring legal title of assets for which
such change is deemed necessary.
(f) On June 30, 2015, the remaining assets of the special retirement fund of the
Duluth Teachers Retirement Fund Association are transferred to the State Board of
Investment at market values determined by the executive director of the State Board of
Investment. Legal title to transferred assets vests with the State Board of Investment
on behalf of the Teachers Retirement Association. The transfer of the assets of the
Duluth Teachers Retirement Fund Association special retirement fund must include any
investment-related accounts receivable that are determined by the executive director
of the State Board of Investment as reasonably capable of being collected and any
non-investment-related accounts receivable that are determined by the executive director
of the Teachers Retirement Association as reasonably capable of being collected. For
accounts receivable that are determined as not reasonably capable of being collected, legal
title to the account transfers to Independent School District No. 709, Duluth, as of the
date of the determination of the executive director of the State Board of Investment and
the executive director of the Teachers Retirement Association. If the accounts receivable
transferred to Independent School District No. 709, Duluth, are subsequently recovered
by the school district, the superintendent of Independent School District No. 709, Duluth,
shall transfer the recovered amount to the executive director of the Teachers Retirement
Association, in cash, for deposit in the teachers retirement fund, less the reasonable
expenses of the school district related to the recovery. If the board of trustees of the Duluth
Teachers Retirement Fund Association establishes a liquidating trust and deposits any of
the retirement fund association assets in that trust or if the legislative auditor determines
that the transferred assets were in an amount less than the full assets of the retirement fund
association other than assets in the tax sheltered annuity program on the date of transfer as
specified in paragraph (g), the amount of any untransferred assets are a claim against the
state aid otherwise payable to Independent School District No. 709, Duluth, payable to the
Teachers Retirement Association by the commissioner of management and budget upon
request by the executive director of the Teachers Retirement Association.
(g) As of June 30, 2015, assets of the special retirement fund, except for direct real
estate holdings, of the Duluth Teachers Retirement Fund Association are assets of the
Teachers Retirement Association to be invested by the State Board of Investment under
Minnesota Statutes, section 354.07, subdivision 4.
    Subd. 6. Termination of Duluth Teachers Retirement Fund Association special
retirement fund. (a) As of June 30, 2015, the Duluth Teachers Retirement Fund
Association as a public retirement plan and its special retirement fund ceases to exist.
(b) Contracts, records, and obligations of the Duluth Teachers Retirement Fund
Association special retirement fund existing at the time of consolidation with the Teachers
Retirement Association are transferred to the Teachers Retirement Association under
Minnesota Statutes, section 15.039, subdivisions 5 and 5a, except that contracts, records,
and obligations of the Duluth Teachers Retirement Fund Association special retirement
fund related to investment and safekeeping of assets are transferred to the State Board
of Investment under Minnesota Statutes, section 15.039, subdivisions 5 and 5a. The
State Board of Investment has the authority to pay the investment-related liabilities
and obligations from the assets transferred from the Duluth Teachers Retirement Fund
Association incurred by the Teachers Retirement Association. The legislative auditor shall
audit the Duluth Teachers Retirement Fund Association for the fiscal year ending June 30,
2015, as part of the Teachers Retirement Association board's annual financial reporting
requirements under Minnesota Statutes, section 356.20. The board of trustees of the
Teachers Retirement Association may authorize and contract with either the legislative
auditor or the state auditor to perform other audit services. Between April 1, 2015, and
June 30, 2015, the Duluth Teachers Retirement Fund Association cannot incur a new or
additional enforceable contractual liability or obligation without approval of the executive
director of the Teachers Retirement Association.

    Sec. 47. DULUTH TEACHERS RETIREMENT FUND ASSOCIATION
EMPLOYEES.
Effective June 30, 2015, the employees of the Duluth Teachers Retirement
Fund Association have their employment with the Duluth Teachers Retirement Fund
Association terminated and, effective July 1, 2015, unless the former employee elects
otherwise, the Duluth Teachers Retirement Fund Association employees, excluding the
Executive Director, become employees of the Teachers Retirement Association. The
commissioner of management and budget shall place employees from the former Duluth
Teachers Retirement Fund Association into state service in their proper classifications,
except that employees are appointed without examination and must be compensated at no
less than their current hourly salary rate. Employees must have their accumulated, but
unused, vacation leave balance as of June 30, 2015, posted to their credit by the Teachers
Retirement Association, but if the employee has vacation time in excess of the applicable
maximum, no additional vacation may accrue until the employee's balance falls below
the maximum permitted by the state for the employee's position. The employees must
receive length of service credit for vacation leave accrual for time served at the Duluth
Teachers Retirement Fund Association. Duluth Teachers Retirement Fund Association
employees who become employees of the Teachers Retirement Association effective on
July 1, 2015, must be considered to have completed six months of continuous service
for vacation use purposes. Employees of the former Duluth Teachers Retirement Fund
Association appointed to the classified service are subject to a probationary period under
the collective bargaining agreement or compensation plan applicable to the employee's
position at the Teachers Retirement Association. Effective July 1, 2015, all transferred
employees must be enrolled in the state employees' group insurance program as provided
in Minnesota Statutes, sections 43A.22 to 43A.31, and the commissioner of management
and budget shall provide open enrollment in all state employee health and dental insurance
plans with no limitation on preexisting conditions except as specified in existing state
employee certificates of coverage. The commissioner of management and budget shall
provide these transferred employees with the opportunity to purchase optional life and
disability insurance as provided by the state group insurance program in accordance with
the policies of management and budget.

    Sec. 48. REPEALER.
(a) Minnesota Statutes 2012, sections 354A.021, subdivision 5; 354A.108; 354A.24;
and 354A.27, subdivision 5, are repealed.
(b) Minnesota Statutes 2013 Supplement, sections 354A.27, subdivisions 6a and 7;
and 354A.31, subdivision 4a, are repealed.

    Sec. 49. EFFECTIVE DATE.
(a) Section 8, subdivision 1, and section 22 are effective July 1, 2014. Section 46,
subdivision 5, is effective October 1, 2014. Sections 1 to 7, 8, subdivisions 2 and 3, 9 to
14, 16 to 21, 23 to 45, 46, subdivisions 1 to 4 and 6, 47, and 48, are effective June 30,
2015, if the following approve the consolidation provisions before October 1, 2014:
(1) the board of trustees of the Duluth Teachers Retirement Fund Association;
(2) the membership of the Duluth Teachers Retirement Fund Association; and
(3) the board of trustees of the Teachers Retirement Association.
(b) An approval under paragraph (a) must be provided in a timely manner in
compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, to the secretary
of state, the state auditor, the legislative auditor, and the revisor of statutes by the chief
administrative officer of the Duluth Teachers Retirement Fund Association for an approval
under paragraph (a) by the board of trustees of the Duluth Teachers Retirement Fund
Association or by the membership of the Duluth Teachers Retirement Fund Association and
by the chief administrative officer of the Teachers Retirement Association for an approval
under paragraph (a) by the board of trustees of the Teachers Retirement Association.

ARTICLE 7

FIRST CLASS CITY TEACHER RETIREMENT FUND
ASSOCIATION CHANGES

    Section 1. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3a,
is amended to read:
    Subd. 3a. Special Direct state aid to first class city teachers retirement fund
associations. (a) The state shall pay $346,000 as special direct state aid to the Duluth
Teachers Retirement Fund Association and $2,827,000 to the St. Paul Teachers Retirement
Fund Association.
(b) In addition to other amounts specified in this subdivision, the state shall pay
$7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.
    (b) (c) The aids under this subdivision are payable October 1 annually. The
commissioner of management and budget shall pay the aids specified in this subdivision.
The amounts required are appropriated annually from the general fund to the commissioner
of management and budget.
EFFECTIVE DATE.This section is effective September 30, 2015.

    Sec. 2. Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3c, is
amended to read:
    Subd. 3c. Termination of supplemental contributions and direct matching
and state aid. (a) The supplemental contributions payable to the St. Paul Teachers
Retirement Fund Association by Independent School District No. 625 under section
423A.02, subdivision 3 , and all forms of state aid under subdivision 3a to the St. Paul
Teachers Retirement Fund Association must continue until the current assets of the fund
equal or exceed the actuarial accrued liability of the fund as determined in the most recent
actuarial report for the fund by the actuary retained under section 356.214 or until June
30, 2037 the established date for full funding under section 356.215, subdivision 11,
whichever occurs earlier.
(b) The aid to the Duluth Teachers Retirement Fund Association under section
423A.02, subdivision 3 , and all forms of state aid under subdivision 3a to the Duluth
Teachers Retirement Fund Association must continue until the current assets of the fund
equal or exceed the actuarial accrued liability of the fund as determined in the most
recent actuarial report for the fund by the actuary retained under section 356.214 or until
the established date for full funding under section 356.215, subdivision 11, whichever
occurs earlier.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 356.215, subdivision 11, is amended to read:
    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
Retirement Association and the legislators retirement plan, the additional contribution
must be calculated on a level percentage of covered payroll basis by the established
date for full funding in effect when the valuation is prepared, assuming annual payroll
growth at the applicable percentage rate set forth in subdivision 8, paragraph (c). For all
other retirement plans and for the MERF division of the Public Employees Retirement
Association and the legislators retirement plan, the additional annual contribution must be
calculated on a level annual dollar amount basis.
    (b) For any retirement plan other than the general state employees retirement plan
of the Minnesota State Retirement System or a retirement plan governed by paragraph
(d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
used for calculating the actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the
fund, or a combination of the three, which change or changes by itself or by themselves
without inclusion of any other items of increase or decrease produce a net increase in the
unfunded actuarial accrued liability of the fund, the established date for full funding is the
first actuarial valuation date occurring after June 1, 2020.
    (c) For any retirement plan other than the general employees retirement plan of the
Public Employees Retirement Association, if there has been a change in any or all of the
actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, and the change or changes, by itself
or by themselves and without inclusion of any other items of increase or decrease, produce
a net increase in the unfunded actuarial accrued liability in the fund, the established date
for full funding must be determined using the following procedure:
    (i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;
    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;
    (iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;
    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;
    (v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);
    (vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in which
the determination of the established date for full funding using the procedure set forth in this
clause is made and not to be less than the period of years beginning in the plan year in which
the determination of the established date for full funding using the procedure set forth in
this clause is made and ending by the date for full funding in effect before the change; and
    (vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.
    (d) For the MERF division of the Public Employees Retirement Association, the
established date for full funding is June 30, 2031.
    (e) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.
    (f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.
    (g) For the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.
    (h) For the judges retirement plan, the established date for full funding is June
30, 2038.
    (i) For the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.
    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30 of the 25th year from the valuation date, 2042. In addition to
other requirements of this chapter, the annual actuarial valuation must contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.
(k) For the general state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2040.
    (l) For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 8

MNSCU-RELATED PROVISIONS

    Section 1. Minnesota Statutes 2012, section 136F.481, is amended to read:
136F.481 EARLY SEPARATION INCENTIVE PROGRAM.
(a) Notwithstanding any provision of law to the contrary, the Board of Trustees
of the Minnesota State Colleges and Universities may offer a targeted early separation
incentive program for its employees.
(b) The early separation incentive program may include one or both of the following:
(1) cash incentives, not to exceed one year of base salary; or
(2) employer contributions to the postretirement healthcare savings plan established
under section 352.98.
(c) To be eligible to receive an incentive, an employee must be at least age 55
and must have at least five years of employment by the Minnesota State Colleges and
Universities System. The board of trustees shall establish and periodically revise the
eligibility requirements for system employees to receive an incentive. The board of
trustees shall file a copy of its proposed revised eligibility requirements with the chairs
and ranking members of the senate committee on with higher education within its
jurisdiction and the Higher Education budget and Policy senate finance division of the
senate Committee on Finance with higher education within its jurisdiction and with the
chair and ranking members of the Higher Education and Workforce Development Finance
and Policy Division of the Finance committee of in the house of representatives with
higher education within its jurisdiction and of the house of representatives Committee
on Ways and Means, at least 30 days before their the final adoption of the proposed
revised eligibility requirements by the board of trustees, shall post the same document
on the system Web site at the same time, and shall hold a public hearing on the proposed
eligibility requirements. The type and any additional amount of the incentive to be offered
may vary by employee classification, as specified by the board.
(d) The president of a college or university, consistent with paragraphs (b) and
(c), may designate:
(1) specific departments or programs at the college or university whose employees
are eligible to be offered the incentive program; or
(2) positions at the college or university eligible to be offered the incentive program.
(e) The chancellor, consistent with paragraphs (b) and (c), may designate:
(1) system office divisions whose employees are eligible to be offered the incentive
program; or
(2) positions at the system office eligible to be offered the incentive program.
(f) Acceptance of the offered incentive must be voluntary on the part of the employee
and must be in writing. The incentive may only be offered at the sole discretion of the
president of the applicable college or university.
(g) A decision by the president of a college or university or by the chancellor not to
offer an incentive may not be challenged.
(h) The cost of the incentive is payable by the college or university on whose behalf
the president offered the incentive or from the system office budget if the chancellor offered
the incentive. If a college or university is merged, the remaining cost of any early separation
incentive must be borne by the successor institution. If a college or university is closed,
the remaining cost of any early separation incentive must be borne by the board of trustees.
(i) Annually, the chancellor and the president of each college or university must
report on the number and types of early separation incentives which were offered and
utilized under this section. The report must be filed annually with the board of trustees and
with the Legislative Reference Library on or before September 1.
(j) The early retirement incentive authority under this section expires on June 30,
2019.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2012, section 352.1155, subdivision 1, is amended to read:
    Subdivision 1. Eligibility. Except as indicated in subdivision 4, the annuity
reduction provisions of section 352.115, subdivision 10, do not apply to a person who:
(1) retires from the Minnesota State Colleges and Universities system with at least
ten years of combined service credit in a system under the jurisdiction of the Board of
Trustees of the Minnesota State Colleges and Universities;
(2) was employed on a full-time basis immediately preceding retirement as a faculty
member or as an unclassified administrator in that system;
(3) was not a recipient of an early retirement incentive under section 136F.481;
(3) (4) begins drawing an annuity from the general state employees retirement plan
of the Minnesota State Retirement System; and
(4) (5) returns to work on not less than a one-third time basis and not more than a
two-thirds time basis in the system from which the person retired under an agreement in
which the person may not earn a salary of more than $46,000 $62,000 in a calendar year
from through employment after retirement in the system from which the person retired.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 3. Minnesota Statutes 2012, section 352.1155, subdivision 4, is amended to read:
    Subd. 4. Exemption limit. For a person eligible under this section who earns more
than $46,000 $62,000 in a calendar year from through reemployment in the Minnesota
State Colleges and Universities system following retirement, the annuity reduction
provisions of section 352.115, subdivision 10, apply only to income over $46,000 $62,000.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 4. Minnesota Statutes 2012, section 354.445, is amended to read:
354.445 NO ANNUITY REDUCTION.
(a) The annuity reduction provisions of section 354.44, subdivision 5, do not apply
to a person who:
(1) retires from the Minnesota State Colleges and Universities system with at least
ten years of combined service credit in a system under the jurisdiction of the Board of
Trustees of the Minnesota State Colleges and Universities;
(2) was employed on a full-time basis immediately preceding retirement as a faculty
member or as an unclassified administrator in that system;
(3) was not a recipient of an early retirement incentive under section 136F.481;
(3) (4) begins drawing an annuity from the teachers retirement association; and
(4) (5) returns to work on not less than a one-third time basis and not more than a
two-thirds time basis in the system from which the person retired under an agreement in
which the person may not earn a salary of more than $46,000 $62,000 in a calendar year
from through employment after retirement in the system from which the person retired.
(b) Initial participation, the amount of time worked, and the duration of participation
under this section must be mutually agreed upon by the president of the institution where
the person returns to work and the employee. The president may require up to one-year
notice of intent to participate in the program as a condition of participation under this
section. The president shall determine the time of year the employee shall work. The
employer or the president may not require a person to waive any rights under a collective
bargaining agreement as a condition of participation under this section.
(c) Notwithstanding any law to the contrary, a person eligible under paragraphs (a)
and (b) may not, based on employment to which the waiver in this section applies, earn
further service credit in a Minnesota public defined benefit plan and is not eligible to
participate in a Minnesota public defined contribution plan, other than a volunteer fire plan
governed by chapter 424A. No employer or employee contribution to any of these plans
may be made on behalf of such a person.
(d) For a person eligible under paragraphs (a) and (b) who earns more than $46,000
$62,000 in a calendar year from through employment after retirement due to employment
by the Minnesota state colleges and universities system, the annuity reduction provisions
of section 354.44, subdivision 5, apply only to income over $46,000 $62,000.
(e) A person who returns to work under this section is a member of the appropriate
bargaining unit and is covered by the appropriate collective bargaining contract. Except
as provided in this section, the person's coverage is subject to any part of the contract
limiting rights of part-time employees.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 5. Minnesota Statutes 2012, section 354A.31, subdivision 3a, is amended to read:
    Subd. 3a. No annuity reduction. (a) The annuity reduction provisions of
subdivision 3 do not apply to a person who:
(1) retires from the technical college system with at least ten years of service credit
in the system from which the person retires;
(2) was employed on a full-time basis immediately preceding retirement as a
technical college faculty member;
(3) was not a recipient of an early retirement incentive under section 136F.481;
(3) (4) begins drawing an annuity from a first class city teachers retirement
association; and
(4) (5) returns to work on not less than a one-third time basis and not more than a
two-thirds time basis in the technical college system under an agreement in which the
person may not earn a salary of more than $46,000 $62,000 in a calendar year from
through the technical college system.
(b) Initial participation, the amount of time worked, and the duration of participation
under this section must be mutually agreed upon by the employer and the employee. The
employer may require up to a one-year notice of intent to participate in the program as a
condition of participation under this section. The employer shall determine the time
of year the employee shall work.
(c) Notwithstanding any law to the contrary, a person eligible under paragraphs
(a) and (b) may not earn further service credit in a first class city teachers retirement
association and is not eligible to participate in the individual retirement account plan or
the supplemental retirement plan established in chapter 354B as a result of service under
this section. No employer or employee contribution to any of these plans may be made on
behalf of such a person.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 6. Minnesota Statutes 2012, section 354B.21, subdivision 2, is amended to read:
    Subd. 2. Coverage; election. (a) An eligible person employed by the board has
the default coverage specified in subdivision 3, or other subdivisions of this section,
whichever is applicable, and retains that coverage for the period of covered employment
unless a timely election to change that coverage is made as specified in this section.
(b) An eligible person under subdivision 3, paragraph (b) or (c), is authorized to elect
prospective Teachers Retirement Association plan coverage.
(c) An eligible person under subdivision 3, paragraph (d), is authorized to elect
prospective coverage by the plan established by this chapter.
(d) The election under paragraph (a) must be made within one year of commencing
eligible Minnesota State Colleges and Universities system employment. If an election
is not made within the specified election period due to a termination of Minnesota State
Colleges and Universities system employment, an election may be made within 90 days
of returning to eligible Minnesota State Colleges and Universities system employment.
Except as specified in paragraph (f), all elections are irrevocable.
(e) Except as provided in paragraph (f), a purchase of service credit in the Teachers
Retirement Association plan for any period or periods of Minnesota State Colleges
and Universities system employment occurring before the election under this section
is prohibited.
(f) Notwithstanding other paragraphs in this subdivision, a faculty member who
is a member of the individual retirement account plan may elect to transfer retirement
coverage to the teachers retirement plan within one year of the faculty member first
achieving tenure or its equivalent at a Minnesota state college or university. The faculty
member electing Teachers Retirement Association coverage under this paragraph must
purchase service credit in the Teachers Retirement Association for the entire period of
time covered under the individual retirement account plan and the purchase payment
amount must be determined under section 356.551. The Teachers Retirement Association
may charge a faculty member transferring coverage a reasonable fee to cover the costs
associated with computing the actuarial cost of purchasing service credit and making the
transfer. A faculty member transferring from the individual retirement account plan to the
Teachers Retirement Association may use any balances to the credit of the faculty member
in the individual retirement account plan, any balances to the credit of the faculty member
in the higher education supplemental retirement plan established under chapter 354C, or
any source specified in section 356.441, subdivision 1, to purchase the service credit in the
Teachers Retirement Association. If the total amount of payments under this paragraph are
less than the total purchase payment amount under section 356.551, the payment amounts
must be refunded to the applicable source. The retirement coverage transfer and service
credit purchase authority under this paragraph expires with respect to any Minnesota State
Colleges and Universities System faculty initially hired after June 30, 2014.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 7. Laws 2009, chapter 169, article 6, section 1, the effective date, is amended to
read:
EFFECTIVE DATE; SUNSET.This section is effective the day following final
enactment and expires June 30, 2014.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 9

POLICE AND FIREFIGHTER PENSION CHANGES

    Section 1. Minnesota Statutes 2012, section 353.6511, subdivision 7, is amended to read:
    Subd. 7. Postretirement adjustments. Effective January 1, 2012, service pensions
and survivor benefits in force are entitled to be recomputed with the number of units
specified in subdivision 2, subdivision 4, and subdivision 6. Optional annuities under
Minnesota Statutes 2010, section 423C.05, subdivision 8, also are entitled to be recomputed
as the actuarial equivalent of the service pensions and survivor benefits with the number of
units specified in subdivision 2, subdivision 4, and subdivision 6. Retirement annuities,
service pensions, disability benefits, and survivor benefits after December 31, 2015, are
eligible for postretirement adjustments under section 356.415, subdivision 1c. The unit
value for the calculation of a retirement annuity first payable after December 31, 2015, is
the calendar year 2015 unit value, plus any annual postretirement adjustment percentage
amount payable after December 31, 2015, under section 356.415, subdivision 1c, payable
after December 31, 2015, and before the date of retirement paragraph (a), clause (1), or,
when applicable, under section 356.415, subdivision 1c, paragraph (b), clause (1).

    Sec. 2. Minnesota Statutes 2012, section 353.6512, subdivision 7, is amended to read:
    Subd. 7. Postretirement adjustments. Retirement annuities, service pensions,
disability benefits, and survivor benefits after December 31, 2015, are eligible for
postretirement adjustments under section 356.415, subdivision 1c. The unit value for the
calculation of a retirement annuity first payable after December 31, 2015, is the calendar
year 2015 unit value, plus any annual postretirement adjustment percentage amount
payable after December 31, 2015, under section 356.415, subdivision 1c, payable after
December 31, 2015, and before the date of retirement paragraph (a), clause (1), or, when
applicable, under section 356.415, subdivision 1c, paragraph (b), clause (1).

    Sec. 3. Minnesota Statutes 2013 Supplement, section 423A.02, subdivision 3, is
amended to read:
    Subd. 3. Reallocation of amortization state aid. (a) Seventy percent of the
difference between $5,720,000 and the current year amortization aid distributed under
subdivision 1 that is not distributed for any reason to a municipality must be distributed
by the commissioner of revenue according to this paragraph. The commissioner shall
distribute 50 percent of the amounts derived under this paragraph to the Teachers
Retirement Association, ten percent to the Duluth Teachers Retirement Fund Association,
and 40 percent to the St. Paul Teachers Retirement Fund Association to fund the unfunded
actuarial accrued liabilities of the respective funds. These payments must be made on July
15 each fiscal year. If the St. Paul Teachers Retirement Fund Association or the Duluth
Teachers Retirement Fund Association becomes fully funded, the association's eligibility
for its portion of this aid ceases. Amounts remaining in the undistributed balance account
at the end of the biennium if aid eligibility ceases cancel to the general fund.
    (b) In order to receive amortization aid under paragraph (a), before June 30 annually
Independent School District No. 625, St. Paul, must make an additional contribution of
$800,000 each year to the St. Paul Teachers Retirement Fund Association.
    (c) Thirty percent of the difference between $5,720,000 and the current year
amortization aid under subdivision 1a 1 that is not distributed for any reason to a
municipality must be distributed under section 69.021, subdivision 7, paragraph (d), as
additional funding to support a minimum fire state aid amount for volunteer firefighter
relief associations.
EFFECTIVE DATE.This section is effective retroactively from July 1, 2013.

    Sec. 4. Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 2, is
amended to read:
    Subd. 2. Allocation. (a) Of the total amount appropriated as supplemental state aid:
    (1) 58.065 58.064 percent must be paid to the executive director of the Public
Employees Retirement Association for deposit in the public employees police and fire
retirement fund established by section 353.65, subdivision 1;
    (2) 35.484 percent must be paid to municipalities other than municipalities solely
employing firefighters with retirement coverage provided by the public employees police
and fire retirement plan which qualified to receive fire state aid in that calendar year,
allocated in proportion to the most recent amount of fire state aid paid under section
69.021, subdivision 7 , for the municipality bears to the most recent total fire state aid
for all municipalities other than the municipalities solely employing firefighters with
retirement coverage provided by the public employees police and fire retirement plan
paid under section 69.021, subdivision 7, with the allocated amount for fire departments
participating in the voluntary statewide lump-sum volunteer firefighter retirement plan
paid to the executive director of the Public Employees Retirement Association for deposit
in the fund established by section 353G.02, subdivision 3, and credited to the respective
account and with the balance paid to the treasurer of each municipality for transmittal
within 30 days of receipt to the treasurer of the applicable volunteer firefighter relief
association for deposit in its special fund; and
    (3) 6.452 percent must be paid to the executive director of the Minnesota State
Retirement System for deposit in the state patrol retirement fund.
(b) For purposes of this section, the term "municipalities" includes independent
nonprofit firefighting corporations that participate in the voluntary statewide lump-sum
volunteer firefighter retirement plan under chapter 353G or with subsidiary volunteer
firefighter relief associations operating under chapter 424A.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2013 Supplement, section 423A.022, subdivision 3, is
amended to read:
    Subd. 3. Reporting; definitions. (a) On or before September 1, annually, the
executive director of the Public Employees Retirement Association shall report to the
commissioner of revenue the following:
    (1) the municipalities which employ firefighters with retirement coverage by the
public employees police and fire retirement plan;
    (2) the number of firefighters with public employees police and fire retirement plan
coverage employed by each municipality;
    (3) the fire departments covered by the voluntary statewide lump-sum volunteer
firefighter retirement plan; and
    (4) any other information requested by the commissioner to administer the police
and firefighter retirement supplemental state aid program.
    (b) For this subdivision, (i) the number of firefighters employed by a municipality
who have public employees police and fire retirement plan coverage means the number
of firefighters with public employees police and fire retirement plan coverage that were
employed by the municipality for not less than 30 hours per week for a minimum of six
months prior to December 31 preceding the date of the payment under this section and, if
the person was employed for less than the full year, prorated to the number of full months
employed; and (ii) the number of active police officers certified for police state aid receipt
under section 69.011, subdivisions 2 and 2b, means, for each municipality, the number of
police officers meeting the definition of peace officer in section 69.011, subdivision 1,
counted as provided and limited by section 69.011, subdivisions 2 and 2b.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. ADDITIONAL SUPPLEMENTAL AID REVISION FOR OMITTED 2013
INDEPENDENT NONPROFIT FIREFIGHTING CORPORATIONS.
(a) Notwithstanding any provision of Minnesota Statutes, chapter 423A, to the
contrary, this section modifies the allocation of the police and fire supplemental retirement
state aid under Minnesota Statutes 2013 Supplement, section 423A.022, for October
1, 2014.
(b) Before the allocation of the police and fire supplemental retirement state aid is
made for October 1, 2014, the commissioner of revenue shall:
(1) determine those fire departments that qualified for fire state aid under Minnesota
Statutes 2012, section 69.021, subdivision 7, on October 1, 2013, that did not receive a
2013 allocation of police and fire supplemental retirement state aid, and that were an
independent nonprofit firefighting corporation; and
(2) determine the amount of police and fire supplemental retirement state aid
under Minnesota Statutes 2013 Supplement, section 423A.022, that the fire departments
described in clause (1) would have received on October 1, 2013, if the fire departments
had been included in that allocation.
(c) The total amount determined in paragraph (b), clause (2), must be deducted from
the amount available for allocation under Minnesota Statutes 2013 Supplement, section
423A.022, subdivision 2, clause (2), and the commissioner of revenue shall pay to the fire
departments determined in paragraph (b), clause (1), their respective portion of the total as
an additional payment on October 1, 2014.
(d) The remaining amount after the deduction of the total amount under paragraph
(c) must be allocated as provided in Minnesota Statutes, section 423A.022, subdivision 2.

    Sec. 7. PERA; STUDY OF LOCAL RELIEF ASSOCIATION BENEFITS
UNDER CONSOLIDATION.
The executive director of the Public Employees Retirement Association shall
report to the Legislative Commission on Pensions and Retirement by February 1, 2015,
regarding the situation of former members and surviving spouses of former members of
local salaried police and fire relief associations governed by Minnesota Statutes, chapter
423A, that consolidated with the public employees police and fire retirement plan under
Minnesota Statutes, chapter 353A, and Laws 1999, chapter 222, article 4.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 10

ACTUARIAL ASSUMPTION CHANGES

    Section 1. Minnesota Statutes 2013 Supplement, section 356.215, subdivision 8,
is amended to read:
    Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:
(1) select and ultimate interest rate assumption

	plan	ultimate preretirement interest rate assumption	ultimate postretirement interest rate assumption
	general state employees retirement plan	8.5%	6.0%
	correctional state employees retirement plan	8.5	6.0
	State Patrol retirement plan	8.5	6.0
	legislators retirement plan, and for the constitutional officers calculation of total plan liabilities	0.0	0.0
	judges retirement plan	8.5	6.0
	general public employees retirement plan	8.5	6.0
	public employees police and fire retirement plan	8.5	6.0
	local government correctional service retirement plan	8.5	6.0
	teachers retirement plan	8.5	6.0
	Duluth teachers retirement plan	8.5	8.5
	St. Paul teachers retirement plan	8.5	8.5

Except for the legislators retirement plan and the constitutional officers calculation
of total plan liabilities, the select preretirement interest rate assumption for the period
after June 30, 2012, through June 30, 2017, is 8.0 percent. Except for the legislators
retirement plan and the constitutional officers calculation of total plan liabilities, the select
postretirement interest rate assumption for the period after June 30, 2012, through June
30, 2017, is 5.5 percent, except for the Duluth teachers retirement plan and the St. Paul
teachers retirement plan, each with a select postretirement interest rate assumption for the
period after June 30, 2012, through June 30, 2017, of 8.0 percent.
(2) single rate preretirement and postretirement interest rate assumption

	plan	interest rate assumption
	Bloomington Fire Department Relief Association	6.0
	local monthly benefit volunteer firefighters relief associations	5.0

(b)(1) If funding stability has been attained, the valuation must use a postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415, subdivision 1,
whichever applies.
(2) If funding stability has not been attained, the valuation must use a select
postretirement adjustment rate actuarial assumption equal to the postretirement adjustment
rate specified in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415,
subdivision 1a, 1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the
approved actuary estimates that the plan will attain the defined funding stability measure,
and thereafter an ultimate postretirement adjustment rate actuarial assumption equal
to the postretirement adjustment rate under section 354A.27, subdivision 7; 354A.29,
subdivision 9; or 356.415, subdivision 1, for the applicable period or periods beginning
when funding stability is projected to be attained.
    (b) (c) The actuarial valuation must use the applicable following single rate future
salary increase assumption, the applicable following modified single rate future salary
increase assumption, or the applicable following graded rate future salary increase
assumption:
    (1) single rate future salary increase assumption

	plan	future salary increase assumption
	legislators retirement plan		5.0%
	judges retirement plan		3.0
	Bloomington Fire Department Relief Association		4.0

    (2) age-related future salary increase age-related select and ultimate future salary
increase assumption or graded rate future salary increase assumption

	plan	future salary increase assumption
	local government correctional service retirement plan	assumption C
	Duluth teachers retirement plan	assumption A
	St. Paul teachers retirement plan	assumption B

For plans other than the Duluth teachers
retirement plan, the select calculation
is: during the designated select period, a
designated percentage rate is multiplied by
the result of the designated integer minus T,
where T is the number of completed years
of service, and is added to the applicable
future salary increase assumption. The
designated select period is ten years and
the designated integer is ten for the Duluth
Teachers Retirement Fund Association
and for the local government correctional
service retirement plan and 15 for the St.
Paul Teachers Retirement Fund Association.
The designated percentage rate is 0.2
percent for the St. Paul Teachers Retirement
Fund Association. The select calculation
for the Duluth Teachers Retirement Fund
Association is 8.00 percent per year for
service years one through seven, 7.25 percent
per year for service years seven and eight,
and 6.50 percent per year for service years
eight and nine.
    The ultimate future salary increase assumption is:

	age	A	B	C
	16	6.00%	5.90%	9.00%
	17	6.00	5.90	9.00
	18	6.00	5.90	9.00
	19	6.00	5.90	9.00
	20	6.00	5.90	9.00
	21	6.00	5.90	8.75
	22	6.00	5.90	8.50
	23	6.00	5.85	8.25
	24	6.00	5.80	8.00
	25	6.00	5.75	7.75
	26	6.00	5.70	7.50
	27	6.00	5.65	7.25
	28	6.00	5.60	7.00
	29	6.00	5.55	6.75
	30	6.00	5.50	6.75
	31	6.00	5.45	6.50
	32	6.00	5.40	6.50
	33	6.00	5.35	6.50
	34	6.00	5.30	6.25
	35	6.00	5.25	6.25
	36	5.86	5.20	6.00
	37	5.73	5.15	6.00
	38	5.59	5.10	6.00
	39	5.45	5.05	5.75
	40	5.31	5.00	5.75
	41	5.18	4.95	5.75
	42	5.04	4.90	5.50
	43	4.90	4.85	5.25
	44	4.76	4.80	5.25
	45	4.63	4.75	5.00
	46	4.49	4.70	5.00
	47	4.35	4.65	5.00
	48	4.21	4.60	5.00
	49	4.08	4.55	5.00
	50	3.94	4.50	5.00
	51	3.80	4.45	5.00
	52	3.66	4.40	5.00
	53	3.53	4.35	5.00
	54	3.39	4.30	5.00
	55	3.25	4.25	4.75
	56	3.25	4.20	4.75
	57	3.25	4.15	4.50
	58	3.25	4.10	4.25
	59	3.25	4.05	4.25
	60	3.25	4.00	4.25
	61	3.25	4.00	4.25
	62	3.25	4.00	4.25
	63	3.25	4.00	4.25
	64	3.25	4.00	4.25
	65	3.25	4.00	4.00
	66	3.25	4.00	4.00
	67	3.25	4.00	4.00
	68	3.25	4.00	4.00
	69	3.25	4.00	4.00
	70	3.25	4.00	4.00

(3) service-related ultimate future salary increase assumption

	general state employees retirement plan of the Minnesota State Retirement System	assumption A
	general employees retirement plan of the Public Employees Retirement Association	assumption B
	Teachers Retirement Association	assumption C
	public employees police and fire retirement plan	assumption D
	State Patrol retirement plan	assumption E
	correctional state employees retirement plan of the Minnesota State Retirement System	assumption F

	service length	A	B	C	D	E	F
	1	10.50%	12.03%	12.00%	13.00%	8.00%	6.00%
	2	8.10	8.90	9.00	11.00	7.50	5.85
	3	6.90	7.46	8.00	9.00	7.00	5.70
	4	6.20	6.58	7.50	8.00	6.75	5.55
	5	5.70	5.97	7.25	6.50	6.50	5.40
	6	5.30	5.52	7.00	6.10	6.25	5.25
	7	5.00	5.16	6.85	5.80	6.00	5.10
	8	4.70	4.87	6.70	5.60	5.85	4.95
	9	4.50	4.63	6.55	5.40	5.70	4.80
	10	4.40	4.42	6.40	5.30	5.55	4.65
	11	4.20	4.24	6.25	5.20	5.40	4.55
	12	4.10	4.08	6.00	5.10	5.25	4.45
	13	4.00	3.94	5.75	5.00	5.10	4.35
	14	3.80	3.82	5.50	4.90	4.95	4.25
	15	3.70	3.70	5.25	4.80	4.80	4.15
	16	3.60	3.60	5.00	4.80	4.65	4.05
	17	3.50	3.51	4.75	4.80	4.50	3.95
	18	3.50	3.50	4.50	4.80	4.35	3.85
	19	3.50	3.50	4.25	4.80	4.20	3.75
	20	3.50	3.50	4.00	4.80	4.05	3.75
	21	3.50	3.50	3.90	4.70	4.00	3.75
	22	3.50	3.50	3.80	4.60	4.00	3.75
	23	3.50	3.50	3.70	4.50	4.00	3.75
	24	3.50	3.50	3.60	4.50	4.00	3.75
	25	3.50	3.50	3.50	4.50	4.00	3.75
	26	3.50	3.50	3.50	4.50	4.00	3.75
	27	3.50	3.50	3.50	4.50	4.00	3.75
	28	3.50	3.50	3.50	4.50	4.00	3.75
	29	3.50	3.50	3.50	4.50	4.00	3.75
	30 or more	3.50	3.50	3.50	4.50	4.00	3.75

    (c) (d) The actuarial valuation must use the applicable following payroll growth
assumption for calculating the amortization requirement for the unfunded actuarial
accrued liability where the amortization retirement is calculated as a level percentage
of an increasing payroll:

	plan	payroll growth assumption
	general state employees retirement plan of the Minnesota State Retirement System	3.75%
	correctional state employees retirement plan	3.75
	State Patrol retirement plan	3.75
	judges retirement plan	3.00
	general employees retirement plan of the Public Employees Retirement Association	3.75
	public employees police and fire retirement plan	3.75
	local government correctional service retirement plan	3.75
	teachers retirement plan	3.75
	Duluth teachers retirement plan	3.50
	St. Paul teachers retirement plan	4.00

    (d) (e) The assumptions set forth in paragraphs (b) (c) and (c) (d) continue to apply,
unless a different salary assumption or a different payroll increase assumption:
    (1) has been proposed by the governing board of the applicable retirement plan;
    (2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and
    (3) has been approved or deemed approved under subdivision 18.
EFFECTIVE DATE.This section is effective June 30, 2014, and applies to
actuarial valuation reports prepared on or after that date.

    Sec. 2. Minnesota Statutes 2012, section 356.215, subdivision 11, is amended to read:
    Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
Retirement Association and the legislators retirement plan, the additional contribution
must be calculated on a level percentage of covered payroll basis by the established date
for full funding in effect when the valuation is prepared, assuming annual payroll growth
at the applicable percentage rate set forth in subdivision 8, paragraph (c) (d). For all
other retirement plans and for the MERF division of the Public Employees Retirement
Association and the legislators retirement plan, the additional annual contribution must be
calculated on a level annual dollar amount basis.
    (b) For any retirement plan other than the general state employees retirement plan of
the Minnesota State Retirement System or a retirement plan governed by paragraph (d),
(e), (f), (g), (h), (i), or (j), or (k), if there has not been a change in the actuarial assumptions
used for calculating the actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the
fund, or a combination of the three, which change or changes by itself or by themselves
without inclusion of any other items of increase or decrease produce a net increase in the
unfunded actuarial accrued liability of the fund, the established date for full funding is the
first actuarial valuation date occurring after June 1, 2020.
    (c) For any retirement plan other than the general employees retirement plan of the
Public Employees Retirement Association, if there has been a change in any or all of the
actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, and the change or changes, by itself
or by themselves and without inclusion of any other items of increase or decrease, produce
a net increase in the unfunded actuarial accrued liability in the fund, the established date
for full funding must be determined using the following procedure:
    (i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;
    (ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;
    (iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;
    (iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;
    (v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);
    (vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in which
the determination of the established date for full funding using the procedure set forth in this
clause is made and not to be less than the period of years beginning in the plan year in which
the determination of the established date for full funding using the procedure set forth in
this clause is made and ending by the date for full funding in effect before the change; and
    (vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.
    (d) For the MERF division of the Public Employees Retirement Association, the
established date for full funding is June 30, 2031.
    (e) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.
    (f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.
    (g) For the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.
    (h) For the judges retirement plan, the established date for full funding is June
30, 2038.
    (i) For the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.
    (j) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30 of the 25th year from the valuation date. In addition to other
requirements of this chapter, the annual actuarial valuation must contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.
(k) For the general state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2040.
    (l) For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.
EFFECTIVE DATE.This section is effective July 1, 2014, and applies to actuarial
valuation results prepared on or after that date.

    Sec. 3. REPEALER.
Minnesota Statutes 2012, section 356.415, subdivision 3, is repealed.
EFFECTIVE DATE.This section is effective June 30, 2014, and applies to
actuarial valuation reports prepared on or after that date.

ARTICLE 11

POSTRETIREMENT ADJUSTMENT TRIGGER PROCEDURES

    Section 1. Minnesota Statutes 2013 Supplement, section 354A.27, subdivision 6a,
is amended to read:
    Subd. 6a. Postretirement adjustment transition. (a) If the funded ratio of the
retirement plan based on the actuarial value of assets is at least 90 percent as reported in
the two most recent actuarial valuation valuations prepared under sections 356.214 and
356.215 , this subdivision expires and subsequent postretirement adjustments are governed
by subdivision 7.
(b) Each annuity or benefit recipient of the retirement plan who has been receiving
that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to
receive a postretirement adjustment of one percent, payable on January 1.
EFFECTIVE DATE.This section is effective July 1, 2015, unless Minnesota
Statutes, section 354A.27, subdivision 6a, is repealed by action of the 2014 legislature.

    Sec. 2. Minnesota Statutes 2012, section 354A.29, subdivision 8, is amended to read:
    Subd. 8. Calculation of postretirement adjustments; transitional provision. (a)
For purposes of computing postretirement adjustments for eligible benefit recipients of
the St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio
based on the actuarial value of assets of the plan as determined by the two most recent
actuarial valuation valuations prepared under sections 356.214 and 356.215 determines
the postretirement increase, as follows:

		Funding ratio	Postretirement increase
		Less than 80 percent	1 percent
		At least 80 percent but less than90 percent	2 percent

(b) The amount determined under paragraph (a) is the full postretirement increase
to be applied as a permanent increase to the regular payment of each eligible member
on January 1 of the next calendar year. For any eligible member whose effective date
of benefit commencement occurred during the calendar year before the postretirement
increase is applied, the full increase amount must be prorated on the basis of whole
calendar quarters in benefit payment status in the calendar year prior to the January 1 on
which the postretirement increase is applied, calculated to the third decimal place.
(c) If the accrued liability funding ratio based on the actuarial value of assets is at
least 90 percent in two consecutive actuarial valuations, this subdivision expires and
subsequent postretirement increases must be paid as specified in subdivision 9.
EFFECTIVE DATE.This section is effective July 1, 2015.

    Sec. 3. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1a, is
amended to read:
    Subd. 1a. Annual postretirement adjustments; Minnesota State Retirement
System plans other than State Patrol retirement plan. (a) Retirement annuity, disability
benefit, or survivor benefit recipients of the legislators retirement plans, including
constitutional officers as specified in chapter 3A, the general state employees retirement
plan, the correctional state employees retirement plan, the unclassified state employees
retirement program, and the judges retirement plan are entitled to a postretirement
adjustment annually on January 1, as follows:
(1) a postretirement increase of two percent must be applied each year, effective
on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least 18 full months before the
January 1 increase; and
(2) for each annuitant or benefit recipient who has been receiving an annuity or
a benefit for at least six full months, an annual postretirement increase of 1/12 of two
percent for each month that the person has been receiving an annuity or benefit must be
applied, effective January 1, following the calendar year in which the person has been
retired for at least six months, but has been retired for less than 18 months.
(b) The increases provided by this subdivision commence on January 1, 2011.
Increases under this subdivision for the general state employees retirement plan, the
correctional state employees retirement plan, or the judges retirement plan terminate on
December 31 of the calendar year in which the two prior consecutive actuarial valuation
valuations prepared by the approved actuary under sections 356.214 and 356.215 and the
standards for actuarial work promulgated by the Legislative Commission on Pensions
and Retirement indicates that the market value of assets of the retirement plan equals or
exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases
under subdivision 1 recommence after that date. Increases under this subdivision for
the legislators retirement plan or the elected state officers retirement plan terminate
on December 31 of the calendar year in which the actuarial valuation prepared by the
approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
promulgated by the Legislative Commission on Pensions and Retirement indicates that the
market value of assets of the general state employees retirement plan equals or exceeds
90 percent of the actuarial accrued liability of the retirement plan and increases under
subdivision 1 recommence after that date.
(c) An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase
not be made.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 4. Minnesota Statutes 2012, section 356.415, subdivision 1d, is amended to read:
    Subd. 1d. Teachers Retirement Association annual postretirement adjustments.
(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
Retirement Association are entitled to a postretirement adjustment annually on January
1, as follows:
(1) for January 1, 2011, and January 1, 2012, no postretirement increase is payable;
(2) for January 1, 2013, and each successive January 1 until funding stability is
restored, a postretirement increase of two percent must be applied each year, effective
on January 1, to the monthly annuity or benefit amount of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 18 full months prior
to the January 1 increase;
(3) for January 1, 2013, and each successive January 1 until funding stability is
restored, for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months before the January 1 increase, an annual postretirement
increase of 1/12 of two percent for each month the person has been receiving an annuity or
benefit must be applied, effective January 1, for which the person has been retired for at
least six months but less than 18 months;
(4) for each January 1 following the restoration of funding stability, a postretirement
increase of 2.5 percent must be applied each year, effective January 1, to the monthly
annuity or benefit amount of each annuitant or benefit recipient who has been receiving an
annuity or a benefit for at least 18 full months prior to the January 1 increase; and
(5) for each January 1 following the restoration of funding stability, for each
annuitant or benefit recipient who has been receiving an annuity or a benefit for at least
six full months before the January 1 increase, an annual postretirement increase of 1/12
of 2.5 percent for each month the person has been receiving an annuity or benefit must
be applied, effective January 1, for which the person has been retired for at least six
months but less than 18 months.
(b) Funding stability is restored when the market value of assets of the Teachers
Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities
of the Teachers Retirement Association in the two most recent prior actuarial valuation
valuations prepared under section 356.215 and the standards for actuarial work by the
approved actuary retained by the Teachers Retirement Association under section 356.214.
(c) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Teachers Retirement Association requesting that the increase
not be made.
(d) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment as provided in
section 354.35 must be treated as the sum of a period-certain retirement annuity and a life
retirement annuity for the purposes of any postretirement adjustment. The period-certain
retirement annuity plus the life retirement annuity must be the annuity amount payable
until age 62, 65, or normal retirement age, as selected by the member at retirement, for an
annuity amount payable under section 354.35. A postretirement adjustment granted on
the period-certain retirement annuity must terminate when the period-certain retirement
annuity terminates.
EFFECTIVE DATE.This section is effective July 1, 2015.

    Sec. 5. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1e, is
amended to read:
    Subd. 1e. Annual postretirement adjustments; State Patrol retirement plan.
(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to a postretirement adjustment annually on January 1, as
follows:
(1) a postretirement increase of one percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
has been receiving an annuity or a benefit for at least 18 full months before the January 1
increase; and
(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months, an annual postretirement increase of 1/12 of one percent
for each month that the person has been receiving an annuity or benefit must be applied,
effective January 1, following the calendar year in which the person has been retired for at
least six months, but has been retired for less than 18 months.
(b) The increases provided by this subdivision commence on January 1, 2014.
Increases under paragraph (a) for the State Patrol retirement plan terminate on December
31 of the calendar year in which the two prior consecutive actuarial valuation valuations
prepared by the approved actuary under sections 356.214 and 356.215 and the standards
for actuarial work promulgated by the Legislative Commission on Pensions and
Retirement indicates that the market value of assets of the retirement plan equals or
exceeds 85 percent of the actuarial accrued liability of the retirement plan and increases
under paragraph (c) recommence after that date.
(c) Retirement annuity, disability benefit, or survivor benefit recipients of the State
Patrol retirement plan are entitled to a postretirement adjustment annually on January
1, as follows:
(1) a postretirement increase of 1.5 percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
has been receiving an annuity or a benefit for at least 18 full months before the January 1
increase; and
(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent
for each month that the person has been receiving an annuity or benefit must be applied,
effective January 1, following the calendar year in which the person has been retired for at
least six months, but has been retired for less than 18 months.
(d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which the two prior consecutive actuarial valuation
valuations prepared by the approved actuary under sections 356.214 and 356.215 and
the standards for actuarial work adopted by the Legislative Commission on Pensions
and Retirement indicates that the market value of assets of the retirement plan equals or
exceeds 90 percent of the actuarial accrued liability of the retirement plan and increases
under subdivision 1 recommence after that date.
(e) An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase
not be made.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 6. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1f, is
amended to read:
    Subd. 1f. Annual postretirement adjustments; Minnesota State Retirement
System judges retirement plan. (a) The increases provided under this subdivision begin
on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement
annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.
(b) Retirement annuity, disability benefit, or survivor benefit recipients of the
judges retirement plan are entitled to a postretirement adjustment annually on January
1, as follows:
(1) a postretirement increase of 1.75 percent must be applied each year, effective
on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least 18 full months before the
January 1 increase; and
(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months, an annual postretirement increase of 1/12 of 1.75
percent for each month that the person has been receiving an annuity or benefit must be
applied, effective January 1, following the calendar year in which the person has been
retired for at least six months, but has been retired for less than 18 months.
(c) Increases under this subdivision terminate on December 31 of the calendar
year in which the two prior consecutive actuarial valuation valuations prepared by the
approved actuary under sections 356.214 and 356.215 and the standards for actuarial work
promulgated by the Legislative Commission on Pensions and Retirement indicates that
the market value of assets of the judges retirement plan equals or exceeds 70 percent of
the actuarial accrued liability of the retirement plan. Increases under subdivision 1 or 1a,
whichever is applicable, begin on the January 1 next following that date.
(d) An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase
not be made.
EFFECTIVE DATE.This section is effective July 1, 2014.

ARTICLE 12

VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION CHANGES

    Section 1. Minnesota Statutes 2013 Supplement, section 69.051, subdivision 1a,
is amended to read:
    Subd. 1a. Financial statement. (a) The board of each volunteer firefighters relief
association, as defined in section 424A.001, subdivision 4, that is not required to file a
financial report and audit under subdivision 1 must prepare a detailed statement of the
financial affairs for the preceding fiscal year of the relief association's special and general
funds in the style and form prescribed by the state auditor. The detailed statement must
show:
(1) the sources and amounts of all money received;
(2) all disbursements, accounts payable and accounts receivable;
(3) the amount of money remaining in the treasury;
(4) total assets, including a listing of all investments;
(5) the accrued liabilities; and
(6) all other items necessary to show accurately the revenues and expenditures and
financial position of the relief association.
(b) The detailed financial statement required under paragraph (a) must be certified
by an independent a certified public accountant or by the state auditor or by the auditor or
accountant who regularly examines or audits the financial transactions of the municipality.
In addition to certifying the financial condition of the special and general funds of the relief
association, the accountant or auditor conducting the examination shall give an opinion
as to the condition of the special and general funds of the relief association, and shall
comment upon any exceptions to the report. The independent accountant or auditor must
have at least five years of public accounting, auditing, or similar experience, and must not
be an active, inactive, or retired member of the relief association or the fire department.
(c) The detailed statement required under paragraph (a) must be countersigned by:
(1) the municipal clerk or clerk-treasurer of the municipality; or
(2) where applicable, by the municipal clerk or clerk-treasurer of the largest
municipality in population which contracts with the independent nonprofit firefighting
corporation if the relief association is a subsidiary of an independent nonprofit firefighting
corporation and by the secretary of the independent nonprofit firefighting corporation; or
(3) by the chief financial official of the county in which the volunteer firefighter
relief association is located or primarily located if the relief association is associated with
a fire department that is not located in or associated with an organized municipality.
(d) The volunteer firefighters' relief association board must file the detailed statement
required under paragraph (a) in the relief association office for public inspection and
present it to the governing body of the municipality within 45 days after the close of the
fiscal year, and must submit a copy of the detailed statement to the state auditor within 90
days of the close of the fiscal year.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. Minnesota Statutes 2013 Supplement, section 69.051, subdivision 3, is
amended to read:
    Subd. 3. Report by certain municipalities; exceptions. (a) The chief
administrative officer of each municipality which has an organized fire department but
which does not have a firefighters' relief association governed by section 69.77 or sections
424A.091 to 424A.095 and which is not exempted under paragraph (b) or (c) shall annually
prepare a detailed financial report of the receipts and disbursements by the municipality
for fire protection service during the preceding calendar year on a form prescribed by the
state auditor. The financial report must contain any information which the state auditor
deems necessary to disclose the sources of receipts and the purpose of disbursements for
fire protection service. The financial report must be signed by the municipal clerk or
clerk-treasurer of the municipality. The financial report must be filed by the municipal clerk
or clerk-treasurer with the state auditor on or before July 1 annually. The municipality does
not qualify initially to receive, and is not entitled subsequently to retain, state aid under
this chapter if the financial reporting requirement or the applicable requirements of this
chapter or any other statute or special law have not been complied with or are not fulfilled.
(b) Each municipality that has an organized fire department and provides retirement
coverage to its firefighters through the voluntary statewide lump-sum volunteer firefighter
retirement plan under chapter 353G qualifies to have fire state aid transmitted to and
retained in the statewide lump-sum volunteer firefighter retirement fund without filing
a detailed financial report if the executive director of the Public Employees Retirement
Association certifies compliance by the municipality with the requirements of sections
353G.04 and 353G.08, paragraph (e), and certifies conformity by the applicable fire chief
with the requirements of section 353G.07.
(c) Each municipality qualifies to receive fire state aid under this chapter without
filing a financial report under paragraph (a) if the municipality:
(1) has an organized fire department;
(2) does not have a volunteer firefighters relief association directly associated with
its fire department;
(3) does not participate in the statewide lump-sum volunteer firefighter retirement
plan under chapter 353G;
(4) provides retirement coverage to its firefighters through the public employees
police and fire retirement plan under sections 353.63 to 353.68; and
(5) is certified by the executive director of the Public Employees Retirement
Association to the state auditor to have had an employer contribution under section
353.65, subdivision 3, for its firefighters for the immediately prior calendar year equal to
or greater than its fire state aid for the immediately prior calendar year.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies to fire state aid payable on October 1, 2014.

    Sec. 3. Minnesota Statutes 2012, section 356A.06, subdivision 7, is amended to read:
    Subd. 7. Expanded list of authorized investment securities. (a) Authority. A
covered pension plan not described by subdivision 6, paragraph (a), is an expanded list
plan and shall invest its assets as specified in this subdivision. The governing board of an
expanded list plan may select and appoint investment agencies to act for or on its behalf.
    (b) Securities generally; investment forms. An expanded list plan is authorized
to purchase, sell, lend, and exchange the investment securities authorized under this
subdivision, including puts and call options and future contracts traded on a contract
market regulated by a governmental agency or by a financial institution regulated by
a governmental agency. These securities may be owned directly or through shares
in exchange-traded or mutual funds, or as units in commingled trusts, subject to any
limitations specified in this subdivision.
    (c) Government obligations. An expanded list plan is authorized to invest funds in
governmental bonds, notes, bills, mortgages, and other evidences of indebtedness if the
issue is backed by the full faith and credit of the issuer or the issue is rated among the top
four quality rating categories by a nationally recognized rating agency. The obligations in
which funds may be invested under this paragraph are guaranteed or insured issues of:
(1) the United States, one of its agencies, one of its instrumentalities, or an
organization created and regulated by an act of Congress;
(2) the Dominion of Canada or one of its provinces if the principal and interest are
payable in United States dollars;
(3) a state or one of its municipalities, political subdivisions, agencies, or
instrumentalities; and
(4) a United States government-sponsored organization of which the United States is
a member if the principal and interest are payable in United States dollars.
    (d) Investment-grade corporate obligations. An expanded list plan is authorized
to invest funds in bonds, notes, debentures, transportation equipment obligations, or
any other longer term evidences of indebtedness issued or guaranteed by a corporation
organized under the laws of the United States or any of its states, or the Dominion of
Canada or any of its provinces if:
    (1) the principal and interest are payable in United States dollars; and
    (2) the obligations are rated among the top four quality categories by a nationally
recognized rating agency.
(e) Below-investment-grade corporate obligations. An expanded list plan is
authorized to invest in unrated corporate obligations or in corporate obligations that are
not rated among the top four quality categories by a nationally recognized rating agency if:
(1) the aggregate value of these obligations does not exceed five percent of the
covered pension plan's market value;
(2) the covered pension plan's participation is limited to 50 percent of a single
offering subject to this paragraph; and
(3) the covered pension plan's participation is limited to 25 percent of an issuer's
obligations subject to this paragraph.
    (f) Other obligations. (1) An expanded list plan is authorized to invest funds in:
    (i) bankers acceptances and deposit notes if issued by a United States bank that is
rated in the highest four quality categories by a nationally recognized rating agency;
    (ii) certificates of deposit if issued by a United States bank or savings institution
rated in the highest four quality categories by a nationally recognized rating agency or
whose certificates of deposit are fully insured by federal agencies, or if issued by a credit
union in an amount within the limit of the insurance coverage provided by the National
Credit Union Administration;
    (iii) commercial paper if issued by a United States corporation or its Canadian
subsidiary and if rated in the highest two quality categories by a nationally recognized
rating agency;
    (iv) mortgage securities and asset-backed securities if rated in the top four quality
categories by a nationally recognized rating agency;
    (v) repurchase agreements and reverse repurchase agreements if collateralized with
letters of credit or securities authorized in this section;
    (vi) guaranteed investment contracts if issued by an insurance company or a bank
that is rated in the top four quality categories by a nationally recognized rating agency
or alternative guaranteed investment contracts if the underlying assets comply with the
requirements of this subdivision;
    (vii) savings accounts if fully insured by a federal agency; and
    (viii) guaranty fund certificates, surplus notes, or debentures if issued by a domestic
mutual insurance company.
    (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates
of deposit and collateralization agreements executed by the covered pension plan under
clause (1), item (ii).
    (3) In addition to investments authorized by clause (1), item (iv), an expanded list
plan is authorized to purchase from the Minnesota Housing Finance Agency all or any part
of a pool of residential mortgages, not in default, that has previously been financed by the
issuance of bonds or notes of the agency. The covered pension plan may also enter into
a commitment with the agency, at the time of any issue of bonds or notes, to purchase
at a specified future date, not exceeding 12 years from the date of the issue, the amount
of mortgage loans then outstanding and not in default that have been made or purchased
from the proceeds of the bonds or notes. The covered pension plan may charge reasonable
fees for any such commitment and may agree to purchase the mortgage loans at a price
sufficient to produce a yield to the covered pension plan comparable, in its judgment,
to the yield available on similar mortgage loans at the date of the bonds or notes. The
covered pension plan may also enter into agreements with the agency for the investment
of any portion of the funds of the agency. The agreement must cover the period of the
investment, withdrawal privileges, and any guaranteed rate of return.
    (g) Corporate stocks. An expanded list plan is authorized to invest in stocks or
convertible issues of any corporation organized under the laws of the United States or any
of its states, any corporation organized under the laws of the Dominion of Canada or any
of its provinces, or any corporation listed on an exchange that is regulated by an agency of
the United States or of the Canadian national government.
    An investment in any corporation must not exceed five percent of the total
outstanding shares of that corporation, except that an expanded list plan may hold up
to 20 percent of the shares of a real estate investment trust and up to 20 percent of the
shares of a closed mutual fund.
    (h) Other investments. (1) In addition to the investments authorized in paragraphs
(b) to (g), and subject to the provisions in clause (2), an expanded list plan is authorized
to invest funds in:
    (i) equity and debt investment businesses through participation in limited
partnerships, trusts, private placements, limited liability corporations, limited liability
companies, limited liability partnerships, and corporations;
    (ii) real estate ownership interests or loans secured by mortgages or deeds of trust
or shares of real estate investment trusts, through investment in limited partnerships,
bank-sponsored collective funds, trusts, mortgage participation agreements, and insurance
company commingled accounts, including separate accounts;
    (iii) resource investments through limited partnerships, trusts, private placements,
limited liability corporations, limited liability companies, limited liability partnerships,
and corporations; and
    (iv) international securities.
    (2) The investments authorized in clause (1) must conform to the following
provisions:
    (i) the aggregate value of all investments made under clause (1), items (i), (ii), and
(iii), may not exceed 35 percent of the market value of the fund for which the expanded
list plan is investing;
    (ii) there must be at least four unrelated owners of the investment other than the
expanded list plan for investments made under clause (1), item (i), (ii), or (iii);
    (iii) the expanded list plan's participation in an investment vehicle is limited to 20
percent thereof for investments made under clause (1), item (i), (ii), or (iii);
    (iv) the expanded list plan's participation in a limited partnership does not include a
general partnership interest or other interest involving general liability. The expanded list
plan may not engage in any activity as a limited partner which creates general liability; and
(v) the aggregate value of all unrated obligations and obligations that are not rated
among the top four quality categories by a nationally recognized rating agency authorized
by paragraph (e) and clause (1), item (iv), must not exceed five percent of the covered
plan's market value; and
(vi) for volunteer firefighter relief associations, emerging market equity and
international debt investments authorized under clause (1), item (iv), must not exceed 15
percent of the association's special fund market value.
(i) Supplemental plan investments. The governing body of an expanded list plan
may certify assets to the State Board of Investment for investment under section 11A.17.
(j) Asset mix limitations. The aggregate value of an expanded list plan's
investments under paragraphs (g) and (h) and equity investments under paragraph (i),
regardless of the form in which these investments are held, must not exceed 85 percent of
the covered plan's market value.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 356A.06, subdivision 7a, is amended to read:
    Subd. 7a. Restrictions. Any agreement to lend securities must be concurrently
collateralized with cash or securities with a market value of not less than 100 percent of the
market value of the loaned securities at the time of the agreement. For a covered pension
authorized to purchase put and call options and futures contracts under subdivision 7, any
agreement for put and call options and futures contracts may only be entered into with a
fully offsetting amount of cash or securities. Only securities authorized by this section,
excluding those under subdivision 7, paragraph (g) (h), clause (1), items (i) to (iv), may be
accepted as collateral or offsetting securities.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 5. Minnesota Statutes 2012, section 424A.015, is amended by adding a
subdivision to read:
    Subd. 6. Governing benefit plan provisions. A service pension or ancillary benefit
payable under this chapter is governed by and must be calculated under the general statute,
special law, relief association articles of incorporation, and relief association bylaw
provisions applicable on the date on which the member separated from active service with
the fire department and active membership in the relief association.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 424A.016, subdivision 4, is amended to read:
    Subd. 4. Individual accounts. (a) An individual account must be established for
each firefighter who is a member of the relief association.
(b) To each individual active member account must be credited an equal share of:
(1) any amounts of fire state aid received by the relief association;
(2) any amounts of municipal contributions to the relief association raised from
levies on real estate or from other available municipal revenue sources exclusive of fire
state aid; and
(3) any amounts equal to the share of the assets of the special fund to the credit of:
(i) any former member who terminated active service with the fire department to
which the relief association is associated before meeting the minimum service requirement
provided for in subdivision 2, paragraph (b), and has not returned to active service with
the fire department for a period no shorter than five years; or
(ii) any retired member who retired before obtaining a full nonforfeitable interest in
the amounts credited to the individual member account under subdivision 2, paragraph
(b), and any applicable provision of the bylaws of the relief association. In addition, any
investment return on the assets of the special fund must be credited in proportion to the
share of the assets of the special fund to the credit of each individual active member
account. Administrative expenses of the relief association payable from the special
fund may be deducted from individual accounts in a manner specified in the bylaws of
the relief association.
(c) If the bylaws so permit and as the bylaws define, the relief association may credit
any investment return on the assets of the special fund to the accounts of inactive members.
(d) Amounts to be credited to individual accounts must be allocated uniformly
for all years of active service and allocations must be made for all years of service,
except for caps on service credit if so provided in the bylaws of the relief association.
Amounts forfeited under paragraph (b), clause (3), before a resumption of active service
and membership under section 424A.01, subdivision 6, remain forfeited and may not be
reinstated upon the resumption of active service and membership. The allocation method
may utilize monthly proration for fractional years of service, as the bylaws or articles of
incorporation of the relief association so provide. The bylaws or articles of incorporation
may define a "month," but the definition must require a calendar month to have at least 16
days of active service. If the bylaws or articles of incorporation do not define a "month," a
"month" is a completed calendar month of active service measured from the member's
date of entry to the same date in the subsequent month.
(e) At the time of retirement under subdivision 2 and any applicable provision of the
bylaws of the relief association, a retiring member is entitled to that portion of the assets
of the special fund to the credit of the member in the individual member account which is
nonforfeitable under subdivision 3 and any applicable provision of the bylaws of the relief
association based on the number of years of service to the credit of the retiring member.
(f) Annually, the secretary of the relief association shall certify the individual
account allocations to the state auditor at the same time that the annual financial statement
or financial report and audit of the relief association, whichever applies, is due under
section 69.051.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 7. Minnesota Statutes 2013 Supplement, section 424A.016, subdivision 6, is
amended to read:
    Subd. 6. Deferred service pensions. (a) A member of a relief association is entitled
to a deferred service pension if the member separates from active service and membership
and has completed the minimum service and membership requirements in subdivision 2.
The requirement that a member separate from active service and membership is waived
for persons who have discontinued their volunteer firefighter duties and who are employed
on a full-time basis under section 424A.015, subdivision 1.
    (b) The deferred service pension is payable when the former member reaches at
least age 50, or at least the minimum age specified in the bylaws governing the relief
association if that age is greater than age 50, and when the former member makes a valid
written application.
    (c) A defined contribution relief association may, if its governing bylaws so provide,
credit interest or additional investment performance on the deferred lump-sum service
pension during the period of deferral. If provided for in the bylaws, the interest must be
paid:
(1) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested by the relief association in a separate account
established and maintained by the relief association;
(2) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested in a separate investment vehicle held by the
relief association; or
(3) at the investment return on the assets of the special fund of the defined contribution
volunteer firefighter relief association in proportion to the share of the assets of the special
fund to the credit of each individual deferred member account through the accounting date
on which the investment return is recognized by and credited to the special fund.
    (d) Unless the bylaws of a relief association that has elected to pay interest or
additional investment performance on deferred lump-sum service pensions under
paragraph (c) specifies a different interest or additional investment performance method,
including the interest or additional investment performance period starting date and ending
date, the interest or additional investment performance on a deferred service pension
is creditable as follows:
(1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the date that the
member separates from active service and membership and ending on the accounting
date immediately before the deferred member commences receipt of the deferred service
pension; or
(2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member
separates from active service and membership and ending on the date that the separate
investment vehicle is valued immediately before the date on which the deferred member
commences receipt of the deferred service pension.
(e) The deferred service pension is governed by and must be calculated under
the general statute, special law, relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the member separated from
active service with the fire department and active membership in the relief association.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 8. Minnesota Statutes 2012, section 424A.016, subdivision 7, is amended to read:
    Subd. 7. Limitation on ancillary benefits. (a) A defined contribution relief
association may only pay an ancillary benefit which would constitute an authorized
disbursement as specified in section 424A.05. The ancillary benefit for active members
must equal the vested and nonvested amount of the individual account of the member.
(b) For deferred members, the ancillary benefit must equal the vested amount of
the individual account of the member. For the recipient of installment payments of a
service pension, the ancillary benefit must equal the remaining balance in the individual
account of the recipient.
(c) If the bylaws permit and as defined by the bylaws, the relief association may pay
an ancillary benefit to, or on behalf of, a member who is not active or deferred.
(d)(1) If a survivor or death benefit is payable under the articles of incorporation or
bylaws, the benefit must be paid:
(i) as a survivor benefit to the surviving spouse of the deceased firefighter;
(ii) as a survivor benefit to the surviving children of the deceased firefighter if no
surviving spouse;
(iii) as a survivor benefit to a designated beneficiary of the deceased firefighter if no
surviving spouse or surviving children; or
(iv) as a death benefit to the estate of the deceased active or deferred firefighter if no
surviving spouse, no surviving children, and no beneficiary designated.
(2) If there are no surviving children, the surviving spouse may waive, in writing,
wholly or partially, the spouse's entitlement to a survivor benefit.
(d) (e) For purposes of this section, for a defined contribution volunteer fire relief
association, a trust created under chapter 501B may be a designated beneficiary. If a trust
payable to the surviving children organized under chapter 501B has been established as
authorized by this section and there is no surviving spouse, the survivor benefit may be
paid to the trust, notwithstanding the requirements of this section.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 9. Minnesota Statutes 2013 Supplement, section 424A.02, subdivision 3, is
amended to read:
    Subd. 3. Flexible service pension maximums. (a) Annually on or before August
1 as part of the certification of the financial requirements and minimum municipal
obligation determined under section 424A.092, subdivision 4, or 424A.093, subdivision
5 , as applicable, the secretary or some other official of the relief association designated
in the bylaws of each defined benefit relief association shall calculate and certify to the
governing body of the applicable qualified municipality the average amount of available
financing per active covered firefighter for the most recent three-year period. The amount
of available financing includes any amounts of fire state aid received or receivable by the
relief association, any amounts of municipal contributions to the relief association raised
from levies on real estate or from other available revenue sources exclusive of fire state
aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief
association calculated under section 424A.092, subdivision 2; 424A.093, subdivisions 2
and 4; or 424A.094, subdivision 2, if any.
    (b) The maximum service pension which the defined benefit relief association has
authority to provide for in its bylaws for payment to a member retiring after the calculation
date when the minimum age and service requirements specified in subdivision 1 are met
must be determined using the table in paragraph (c) or (d), whichever applies.
    (c) For a defined benefit relief association where the governing bylaws provide for
a monthly service pension to a retiring member, the maximum monthly service pension
amount per month for each year of service credited that may be provided for in the bylaws
is the greater of the service pension amount provided for in the bylaws on the date of the
calculation of the average amount of the available financing per active covered firefighter
or the maximum service pension figure corresponding to the average amount of available
financing per active covered firefighter:

	Minimum Average Amount of Available Financing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
	$ ...		$ .25
	41		.50
	81		1.00
	122		1.50
	162		2.00
	203		2.50
	243		3.00
	284		3.50
	324		4.00
	365		4.50
	405		5.00
	486		6.00
	567		7.00
	648		8.00
	729		9.00
	810		10.00
	891		11.00
	972		12.00
	1053		13.00
	1134		14.00
	1215		15.00
	1296		16.00
	1377		17.00
	1458		18.00
	1539		19.00
	1620		20.00
	1701		21.00
	1782		22.00
	1823		22.50
	1863		23.00
	1944		24.00
	2025		25.00
	2106		26.00
	2187		27.00
	2268		28.00
	2349		29.00
	2430		30.00
	2511		31.00
	2592		32.00
	2673		33.00
	2754		34.00
	2834		35.00
	2916		36.00
	2997		37.00
	3078		38.00
	3159		39.00
	3240		40.00
	3321		41.00
	3402		42.00
	3483		43.00
	3564		44.00
	3645		45.00
	3726		46.00
	3807		47.00
	3888		48.00
	3969		49.00
	4050		50.00
	4131		51.00
	4212		52.00
	4293		53.00
	4374		54.00
	4455		55.00
	4536		56.00
	Effective beginning December 31, 2008
	4617		57.00
	4698		58.00
	4779		59.00
	4860		60.00
	4941		61.00
	5022		62.00
	5103		63.00
	5184		64.00
	5265		65.00
	Effective beginning December 31, 2009
	5346		66.00
	5427		67.00
	5508		68.00
	5589		69.00
	5670		70.00
	5751		71.00
	5832		72.00
	5913		73.00
	5994		74.00
	Effective beginning December 31, 2010
	6075		75.00
	6156		76.00
	6237		77.00
	6318		78.00
	6399		79.00
	6480		80.00
	6561		81.00
	6642		82.00
	6723		83.00
	Effective beginning December 31, 2011
	6804		84.00
	6885		85.00
	6966		86.00
	7047		87.00
	7128		88.00
	7209		89.00
	7290		90.00
	7371		91.00
	7452		92.00
	Effective beginning December 31, 2012
	7533		93.00
	7614		94.00
	7695		95.00
	7776		96.00
	7857		97.00
	7938		98.00
	8019		99.00
	8100		100.00
	any amount in excess of
	8100		100.00

    (d) For a defined benefit relief association in which the governing bylaws provide
for a lump-sum service pension to a retiring member, the maximum lump-sum service
pension amount for each year of service credited that may be provided for in the bylaws is
the greater of the service pension amount provided for in the bylaws on the date of the
calculation of the average amount of the available financing per active covered firefighter
or the maximum service pension figure corresponding to the average amount of available
financing per active covered firefighter for the applicable specified period:

	Minimum Average Amount of Available Financing per Firefighter		Maximum Lump-Sum Service Pension Amount Payable for Each Year of Service
	$ ...		$ 10
	11		20
	16		30
	23		40
	27		50
	32		60
	43		80
	54		100
	65		120
	77		140
	86		160
	97		180
	108		200
	131		240
	151		280
	173		320
	194		360
	216		400
	239		440
	259		480
	281		520
	302		560
	324		600
	347		640
	367		680
	389		720
	410		760
	432		800
	486		900
	540		1000
	594		1100
	648		1200
	702		1300
	756		1400
	810		1500
	864		1600
	918		1700
	972		1800
	1026		1900
	1080		2000
	1134		2100
	1188		2200
	1242		2300
	1296		2400
	1350		2500
	1404		2600
	1458		2700
	1512		2800
	1566		2900
	1620		3000
	1672		3100
	1726		3200
	1753		3250
	1780		3300
	1820		3375
	1834		3400
	1888		3500
	1942		3600
	1996		3700
	2023		3750
	2050		3800
	2104		3900
	2158		4000
	2212		4100
	2265		4200
	2319		4300
	2373		4400
	2427		4500
	2481		4600
	2535		4700
	2589		4800
	2643		4900
	2697		5000
	2751		5100
	2805		5200
	2859		5300
	2913		5400
	2967		5500
	3021		5600
	3075		5700
	3129		5800
	3183		5900
	3237		6000
	3291		6100
	3345		6200
	3399		6300
	3453		6400
	3507		6500
	3561		6600
	3615		6700
	3669		6800
	3723		6900
	3777		7000
	3831		7100
	3885		7200
	3939		7300
	3993		7400
	4047		7500
	Effective beginning December 31, 2008
	4101		7600
	4155		7700
	4209		7800
	4263		7900
	4317		8000
	4371		8100
	4425		8200
	4479		8300
	Effective beginning December 31, 2009
	4533		8400
	4587		8500
	4641		8600
	4695		8700
	4749		8800
	4803		8900
	4857		9000
	4911		9100
	Effective beginning December 31, 2010
	4965		9200
	5019		9300
	5073		9400
	5127		9500
	5181		9600
	5235		9700
	5289		9800
	5343		9900
	5397		10,000
	any amount in excess of
	5397		10,000

    (e) For a defined benefit relief association in which the governing bylaws provide
for a monthly benefit service pension as an alternative form of service pension payment
to a lump-sum service pension, the maximum service pension amount for each pension
payment type must be determined using the applicable table contained in this subdivision.
    (f) If a defined benefit relief association establishes a service pension in compliance
with the applicable maximum contained in paragraph (c) or (d) and the minimum average
amount of available financing per active covered firefighter is subsequently reduced
because of a reduction in fire state aid or because of an increase in the number of active
firefighters, the relief association may continue to provide the prior service pension
amount specified in its bylaws, but may not increase the service pension amount until
the minimum average amount of available financing per firefighter under the table in
paragraph (c) or (d), whichever applies, permits.
    (g) No defined benefit relief association is authorized to provide a service pension in
an amount greater than the largest applicable flexible service pension maximum amount
even if the amount of available financing per firefighter is greater than the financing
amount associated with the largest applicable flexible service pension maximum.
(h) The method of calculating service pensions must be applied uniformly for all
years of active service. Credit must be given for all years of active service except for caps
on service credit if so provided in the bylaws of the relief association.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 10. Minnesota Statutes 2013 Supplement, section 424A.02, subdivision 7, is
amended to read:
    Subd. 7. Deferred service pensions. (a) A member of a defined benefit relief
association is entitled to a deferred service pension if the member separates from active
service and membership and has completed the minimum service and membership
requirements in subdivision 1. The requirement that a member separate from active service
and membership is waived for persons who have discontinued their volunteer firefighter
duties and who are employed on a full-time basis under section 424A.015, subdivision 1.
    (b) The deferred service pension is payable when the former member reaches at
least age 50, or at least the minimum age specified in the bylaws governing the relief
association if that age is greater than age 50, and when the former member makes a valid
written application.
    (c) A defined benefit relief association that provides a lump-sum service pension
governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the
deferred lump-sum service pension during the period of deferral. If provided for in the
bylaws, interest must be paid in one of the following manners:
    (1) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested by the relief association in a separate account
established and maintained by the relief association;
(2) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested in a separate investment vehicle held by the
relief association; or
    (3) at an interest rate of up to five percent, compounded annually, as set by the
board of trustees.
(d) Any change in the interest rate set by the board of directors trustees under
paragraph (c), clause (3), must be ratified by the governing body of the municipality
served by the fire department to which the relief association is directly associated, or by
the independent nonprofit firefighting corporation, as applicable.
    (e) Interest under paragraph (c), clause (3), is payable beginning on the January 1
next following the date on which the deferred service pension interest rate as set by the
board of trustees was ratified by the governing body of the municipality served by the fire
department to which the relief association is directly associated, or by the independent
nonprofit firefighting corporation, as applicable.
    (f) Unless the bylaws of a relief association that has elected to pay interest or
additional investment performance on deferred lump-sum service pensions under
paragraph (c) specifies a different interest or additional investment performance method,
including the interest or additional investment performance period starting date and ending
date, the interest or additional investment performance on a deferred service pension
is creditable as follows:
(1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the first day of the
month next following the date on which the member separates from active service and
membership and ending on the last day of the month immediately before the month in
which the deferred member commences receipt of the deferred service pension; or
(2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member
separates from active service and membership and ending on the date that the separate
investment vehicle is valued immediately before the date on which the deferred member
commences receipt of the deferred service pension.
(g) For a deferred service pension that is transferred to a separate account established
and maintained by the relief association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk subsequent to transfer and
in calculating the accrued liability of the volunteer firefighters relief association that pays
a lump-sum service pension, the accrued liability for deferred service pensions is equal
to the separate relief association account balance or the fair market value of the separate
investment vehicle held by the relief association.
    (h) The deferred service pension is governed by and must be calculated under
the general statute, special law, relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the member separated from
active service with the fire department and active membership in the relief association.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 11. Minnesota Statutes 2012, section 424A.05, subdivision 3, is amended to read:
    Subd. 3. Authorized disbursements from special fund. Disbursements from the
special fund may not be made for any purpose other than one of the following:
    (1) for the payment of service pensions to retired members of the relief association if
authorized and paid under law and the bylaws governing the relief association;
(2) for the purchase of an annuity for the applicable person under section 424A.015,
subdivision 3, for the transfer of service pension or benefit amounts to the applicable
person's individual retirement account under section 424A.015, subdivision 4, or to the
applicable person's account in the Minnesota deferred compensation plan under section
424A.015, subdivision 5 ;
    (3) for the payment of temporary or permanent disability benefits to disabled
members of the relief association if authorized and paid under law and specified in amount
in the bylaws governing the relief association;
    (4) for the payment of survivor benefits or for the payment of a death benefit to the
estate of the deceased active or deferred firefighter, if authorized and paid under law and
specified in amount in the bylaws governing the relief association;
    (5) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the Minnesota Area Relief State Fire Chiefs Association
Coalition in order to entitle relief association members to membership in and the benefits
of these associations or organizations;
(6) for the payment of insurance premiums to the state Volunteer Firefighters Benefit
Association, or an insurance company licensed by the state of Minnesota offering casualty
insurance, in order to entitle relief association members to membership in and the benefits
of the association or organization; and
    (7) for the payment of administrative expenses of the relief association as authorized
under section 69.80.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 12. Minnesota Statutes 2012, section 424A.08, is amended to read:
424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION;
AUTHORIZED DISBURSEMENTS.
(a) Any qualified municipality which is entitled to receive fire state aid but which
has no volunteer firefighters' relief association directly associated with its fire department
and which has no full-time firefighters with retirement coverage by the public employees
police and fire retirement plan shall deposit the fire state aid in a special account
established for that purpose in the municipal treasury. Disbursement from the special
account may not be made for any purpose except:
(1) payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the state Volunteer Firefighters' Benefit Association in
order to entitle its firefighters to membership in and the benefits of these state associations;
(2) payment of the cost of purchasing and maintaining needed equipment for the
fire department; and
(3) payment of the cost of construction, acquisition, repair, or maintenance of
buildings or other premises to house the equipment of the fire department.
(b) A qualified municipality which is entitled to receive fire state aid, which has no
volunteer firefighters' relief association directly associated with its fire department, which
does not participate in the voluntary statewide lump-sum volunteer firefighter retirement
plan under chapter 353G, and which has full-time firefighters with retirement coverage
by the public employees police and fire retirement plan may disburse the fire state aid as
provided in paragraph (a), for the payment of the employer contribution requirement with
respect to firefighters covered by the public employees police and fire retirement plan under
section 353.65, subdivision 3, or for a combination of the two types of disbursements.
(c) A municipality that has no volunteer firefighters' relief association directly
associated with it and that participates in the voluntary statewide lump-sum volunteer
firefighter retirement plan under chapter 353G shall transmit any fire state aid that it
receives to the voluntary statewide lump-sum volunteer firefighter retirement fund.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 13. Minnesota Statutes 2013 Supplement, section 424A.092, subdivision 6,
is amended to read:
    Subd. 6. Municipal ratification for plan amendments. If the special fund of
the relief association does not have a surplus over full funding under subdivision 3,
paragraph (c), clause (5), and if the municipality is required to provide financial support
to the special fund of the relief association under this section, the adoption of or any
amendment to the articles of incorporation or bylaws of a relief association which
increases or otherwise affects the retirement coverage provided by or the service pensions
or retirement benefits payable from the special fund of any relief association to which this
section applies is not effective until it is ratified by the governing body of the municipality
in which the relief association is located served by the fire department to which the
relief association is directly associated or by the independent nonprofit firefighting
corporation, as applicable, and the officers of a relief association shall not seek municipal
ratification prior to preparing and certifying an estimate of the expected increase in the
accrued liability and annual accruing liability of the relief association attributable to the
amendment. If the special fund of the relief association has a surplus over full funding
under subdivision 3, paragraph (c), clause (5), and if the municipality is not required to
provide financial support to the special fund of the relief association under this section,
the relief association may adopt or amend its articles of incorporation or bylaws which
increase or otherwise affect the retirement coverage provided by or the service pensions
or retirement benefits payable from the special fund of the relief association which are
effective without municipal ratification so long as this does not cause the amount of the
resulting increase in the accrued liability of the special fund of the relief association to
exceed 90 percent of the amount of the surplus over full funding reported in the prior year
and this does not result in the financial requirements of the special fund of the relief
association exceeding the expected amount of the future fire state aid to be received by
the relief association as determined by the board of trustees following the preparation
of an estimate of the expected increase in the accrued liability and annual accruing
liability of the relief association attributable to the change. If a relief association adopts or
amends its articles of incorporation or bylaws without municipal ratification under this
subdivision, and, subsequent to the amendment or adoption, the financial requirements
of the special fund of the relief association under this section are such so as to require
financial support from the municipality, the provision which was implemented without
municipal ratification is no longer effective without municipal ratification and any service
pensions or retirement benefits payable after that date may be paid only in accordance with
the articles of incorporation or bylaws as amended or adopted with municipal ratification.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 14. Minnesota Statutes 2013 Supplement, section 424A.093, subdivision 2,
is amended to read:
    Subd. 2. Determination of actuarial condition and funding costs. A relief
association to which this section applies shall obtain an actuarial valuation showing the
condition of the special fund of the relief association as of December 31, 1978, and at
least as of December 31 every four years thereafter. The valuation shall be prepared in
accordance with the provisions of sections 356.215, subdivision 8, and 356.216 and any
applicable standards for actuarial work established by the Legislative Commission on
Pensions and Retirement, except that the figure for normal cost shall be expressed as a
level dollar amount, and the amortization contribution shall be the level dollar amount
calculated to amortize any current unfunded accrued liability by at least the date of full
funding specified in subdivision 4, clause (b). Each valuation shall be filed with the
governing body of the municipality in which the relief association is located served by the
fire department to which the relief association is directly associated or by the independent
nonprofit firefighting corporation, as applicable, and with the state auditor, not later than
July 1 of the year next following the date as of which the actuarial valuation is prepared.
Any relief association which is operating under a special law which requires that actuarial
valuations be obtained at least every four years and be prepared in accordance with
applicable actuarial standards set forth in statute may continue to have actuarial valuations
made according to the time schedule set forth in the special legislation subject to the
provisions of subdivision 3.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2013 Supplement, section 424A.093, subdivision 6,
is amended to read:
    Subd. 6. Municipal ratification for plan amendments. If the special fund of the
relief association does not have a surplus over full funding under subdivision 4, and
if the municipality is required to provide financial support to the special fund of the
relief association under this section, the adoption of or any amendment to the articles of
incorporation or bylaws of a relief association which increases or otherwise affects the
retirement coverage provided by or the service pensions or retirement benefits payable
from the special fund of any relief association to which this section applies is not effective
until it is ratified by the governing body of the municipality in which the relief association
is located served by the fire department to which the relief association is directly associated
or by the independent nonprofit firefighting corporation, as applicable. If the special
fund of the relief association has a surplus over full funding under subdivision 4, and if
the municipality is not required to provide financial support to the special fund of the
relief association under this section, the relief association may adopt or amend its articles
of incorporation or bylaws which increase or otherwise affect the retirement coverage
provided by or the service pensions or retirement benefits payable from the special fund
of the relief association which are effective without municipal ratification so long as this
does not cause the amount of the resulting increase in the accrued liability of the special
fund of the relief association to exceed 90 percent of the amount of the surplus over full
funding reported in the prior year and this does not result in the financial requirements of
the special fund of the relief association exceeding the expected amount of the future fire
state aid to be received by the relief association as determined by the board of trustees
following the preparation of an updated actuarial valuation including the proposed change
or an estimate of the expected actuarial impact of the proposed change prepared by the
actuary of the relief association. If a relief association adopts or amends its articles of
incorporation or bylaws without municipal ratification pursuant to this subdivision, and,
subsequent to the amendment or adoption, the financial requirements of the special fund
of the relief association under this section are such so as to require financial support from
the municipality, the provision which was implemented without municipal ratification is
no longer effective without municipal ratification and any service pensions or retirement
benefits payable after that date may be paid only in accordance with the articles of
incorporation or bylaws as amended or adopted with municipal ratification.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 16. Minnesota Statutes 2013 Supplement, section 424A.094, subdivision 2,
is amended to read:
    Subd. 2. Determination of actuarial condition and funding costs. Each
independent nonprofit firefighting corporation to which this section applies shall determine
the actuarial condition and the funding costs of the subsidiary relief association using
the following procedure:
(1) An independent nonprofit firefighting corporation which has a subsidiary relief
association which pays a monthly benefit service pension shall procure an actuarial
valuation of the special fund of the subsidiary relief association at the same times and
in the same manner as specified in section 424A.093, subdivisions 2 and 3, and an
independent nonprofit firefighting corporation which has a subsidiary relief association
which pays a lump-sum service pension shall determine the accrued liability of the special
fund of the relief association in accordance with section 424A.092, subdivision 2.
(2) The financial requirements of the special fund of the subsidiary relief association
which pays a monthly benefit service pension shall be determined in the same manner
as specified in section 424A.093, subdivision 4, and the financial requirements of the
special fund of the subsidiary relief association shall be determined in the same manner as
specified in section 424A.092, subdivision 3.
(3) The minimum obligation of the independent nonprofit firefighting corporation on
behalf of the special fund of the subsidiary relief association shall be determined in the
same manner as specified in section 424A.092, subdivision 4, or 424A.093, subdivision 5,
as applicable.
(4) The independent nonprofit firefighting corporation shall appropriate annually
from the income of the corporation an amount at least equal to the minimum obligation
of the independent nonprofit firefighting corporation on behalf of the special fund of
the subsidiary relief association.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 17. Minnesota Statutes 2013 Supplement, section 424A.10, subdivision 2, is
amended to read:
    Subd. 2. Payment of supplemental benefit. (a) Upon the payment by a volunteer
firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter
retirement plan of a lump-sum distribution to a qualified recipient, the association must
pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the
contrary, the relief association must pay the supplemental benefit out of its special fund
and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay
the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter
retirement plan. This benefit is an amount equal to ten percent of the regular lump-sum
distribution that is paid on the basis of the recipient's service as a volunteer firefighter.
In no case may the amount of the supplemental benefit exceed $1,000. A supplemental
benefit under this paragraph may not be paid to a survivor of a deceased active or deferred
volunteer firefighter in that capacity.
    (b) Upon the payment by a relief association or the retirement plan of a lump-sum
survivor benefit to a survivor of a deceased active volunteer firefighter or of a deceased
deferred volunteer firefighter, the association must pay a supplemental survivor benefit to
the survivor of the deceased active or deferred volunteer firefighter from the special fund
of the relief association and the retirement plan must pay a supplemental survivor benefit
to the survivor of the deceased active or deferred volunteer firefighter from the retirement
fund if chapter 353G so provides. The amount of the supplemental survivor benefit is 20
percent of the survivor benefit, but not to exceed $2,000.
    (c) For purposes of this section, the term "regular lump-sum distribution" means the
pretax lump-sum distribution excluding any interest that may have been credited during a
volunteer firefighter's period of deferral.
    (d) An individual may receive a supplemental benefit under paragraph (a) or under
paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
firefighter benefit.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 18. Minnesota Statutes 2012, section 424B.12, is amended to read:
424B.12 MIXED CONSOLIDATING RELIEF ASSOCIATIONS; BENEFIT
PLAN; FUNDING.
    Subdivision 1. Applicability. This section applies where one or more of the
volunteer firefighters' relief associations involved in the consolidation are defined benefit
relief associations as defined in section 424A.001, subdivision 1b, and one or more of
the volunteer firefighters' relief associations involved in the consolidation are defined
contribution relief associations as defined in section 424A.001, subdivision 1c.
    Subd. 2. Benefit plan. The articles of incorporation or bylaws of the successor
relief association must specify whether the relief association is a defined benefit relief
association or whether the relief association is a defined contribution relief association. If
the successor relief association is a defined benefit relief association, the relief association
benefits must comply with sections 424A.02 and 424B.11, subdivision 1a 424B.10. If
the successor relief association is a defined contribution relief association, the relief
association must comply with sections 424A.016 and 424B.12 424B.11, subdivision 2.
    Subd. 3. Funding. If the successor relief association is a defined benefit relief
association, the relief association funding is governed by section 424B.11 424B.10,
subdivision 2. If the successor relief association is a defined contribution relief association,
the relief association funding is governed by section 424B.12 424B.11, subdivision 3.
EFFECTIVE DATE.This section is effective the day following final enactment.

ARTICLE 13

MISCELLANEOUS RETIREMENT PROVISIONS

    Section 1. Minnesota Statutes 2012, section 11A.17, subdivision 1, is amended to read:
    Subdivision 1. Purpose; accounts; continuation. (a) The purpose of the
supplemental investment fund is to provide an investment vehicle for the assets of various
public retirement plans and funds.
(b) The fund consists of eight investment accounts: an income share account, a
growth share account, an international share account, a money market account, a fixed
interest account, a bond market account, a common stock index account, and a volunteer
firefighter account. The state board shall determine and make available investment
accounts within the supplemental investment fund. These accounts shall include an
appropriate array of diversified investment options for participants of the public retirement
plans under subdivision 5.
(c) The assets of the supplemental investment fund is a continuation of the
supplemental retirement fund in existence on January 1, 1980 must be invested by the
state board in types of investments permitted under section 11A.24.
(d) The state board shall make available a volunteer firefighter account for the
voluntary statewide lump-sum volunteer firefighter retirement plan under section 353G.02.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 2. Minnesota Statutes 2012, section 11A.17, subdivision 9, is amended to read:
    Subd. 9. Valuation of investment shares. (a) The value of investment shares in
the income share account, the growth share account, the international share account,
the bond market account, and the common stock index for each investment account,
excluding a money market account, must be determined by dividing the total market
value of the securities constituting the respective account by the total number of shares
then outstanding in the investment account.
(b) The value of investment shares in the a money market account and the fixed
interest account is must be $1 a share. Terms as to withdrawal schedules will be agreed
upon by the public retirement fund and the state board.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 3. Minnesota Statutes 2012, section 352.115, subdivision 8, is amended to read:
    Subd. 8. Accrual of annuity. State employees shall apply for an annuity. The
application for an annuity must not be made more than 90 60 days before the time the state
employee is eligible to retire by reason of both age and service requirements or former
state employee elects to begin collecting a retirement annuity. If the director determines an
applicant for annuity has fulfilled the legal requirements for an annuity, the director shall
authorize the annuity payment in accordance with this chapter and payment must be made
as authorized. An annuity shall begin to accrue no earlier than 180 days before the date the
application is filed with the director, but not before the day following the termination of
state service or before the day the employee is eligible to retire by reason of both age and
service requirements. The retirement annuity shall cease with the last payment which had
accrued during the lifetime of the retired employee unless an optional annuity provided in
section 352.116, subdivision 3, had been selected and had become payable. The joint and
last survivor annuity shall cease with the last payment received by the survivor during
the lifetime of the survivor. If a retired employee had not selected an optional annuity, or
a survivor annuity is not payable under the option, and a spouse survives, the spouse is
entitled only to the annuity for the calendar month in which the retired employee died.
If an optional annuity is payable after the death of the retired employee, the survivor is
entitled to the annuity for the calendar month in which the retired employee died.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 4. Minnesota Statutes 2012, section 352.115, subdivision 10, is amended to read:
    Subd. 10. Reemployment of annuitant. (a) Except for salary or wages received
as a temporary employee of the legislature during a legislative session, if any retired
employee again becomes entitled to receive salary or wages from any employer who
employs state employees as that term is defined in section 352.01, subdivision 2, in a
position covered by this chapter, the annuity or retirement allowance must cease when the
first of the month following the month that the retired employee has earned an amount
equal to the annual maximum earnings allowable for that age for the continued receipt of
full benefit amounts monthly under the federal old age, survivors, and disability insurance
program as set by the secretary of health and human services under United States Code,
title 42, section 403, in any calendar year. If the retired employee has not yet reached the
minimum age for the receipt of Social Security benefits, the maximum earnings for the
retired employee are equal to the annual maximum earnings allowable for the minimum
age for the receipt of Social Security benefits.
(b) The balance of the annual retirement annuity after cessation must be handled or
disposed of as provided in section 356.47.
(c) The annuity must be resumed when the first of the month following the month
that state service ends, or, if the retired employee is still employed at the beginning of the
next calendar year, at the beginning of that calendar year, and payment must again end
when the retired employee has earned the applicable reemployment earnings maximum
specified in this subdivision. If the retired employee is granted a sick leave without pay,
but not otherwise, the annuity or retirement allowance must be resumed during the period
of sick leave.
(d) No payroll deductions for the retirement fund may be made from the earnings of
a reemployed retired employee.
(e) No change may be made in the monthly amount of an annuity or retirement
allowance because of the reemployment of an annuitant.
(f) If a reemployed annuitant whose annuity is suspended under paragraph (a)
is having insurance premium amounts withheld under section 356.87, subdivision 2,
insurance premium amounts must continue to be withheld and transferred from the
suspended portion of the annuity. The balance of the annual retirement annuity after
cessation, after deduction of the insurance premium amounts, must be treated as specified
in paragraph (b).
(g) If a reemployed annuitant whose annuity is suspended under paragraph (a)
has a former spouse receiving a portion of the annuity allowable under section 518.58,
subdivision 1, the portion payable to the former spouse must continue to be paid.
EFFECTIVE DATE.This section is effective retroactively from January 1, 2014.

    Sec. 5. Minnesota Statutes 2012, section 352.965, subdivision 4, is amended to read:
    Subd. 4. Plan investments. (a) Available investments under the plan may include:
are those investments chosen by the State Board of Investment under section 356.645 for
the plan.
    (1) shares in the Minnesota supplemental investment fund established in section
11A.17 that are selected to be offered under the plan by the State Board of Investment;
    (2) saving accounts in federally insured financial institutions;
    (3) life insurance contracts, fixed annuity, and variable annuity contracts from
companies that are subject to regulation by the commissioner of commerce;
    (4) investment options from open-end investment companies registered under the
federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
to 80a-64;
    (5) investment options from a firm that is a registered investment advisor under the
Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21;
    (6) investment options of a bank as defined in United States Code, title 15, section
80b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
(a), paragraph (1); or
    (7) a combination of clause (1), (2), (3), (4), (5), or (6), as provided by the plan as
specified by the participant.
    (b) All amounts contributed to the deferred compensation plan and all earnings
on those amounts must be held for the exclusive benefit of the plan participants and
beneficiaries. These amounts must be held in trust, in custodial accounts, or in qualifying
annuity contracts as required by federal law in accordance with section 356A.06,
subdivision 1. This subdivision does not authorize an employer contribution, except as
authorized in section 356.24, subdivision 1, paragraph (a), clause (5). The state, political
subdivision, or other employing unit is not responsible for any loss that may result from
investment of the deferred compensation.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 6. Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
to read:
    Subd. 4a. Exclusive benefit. All amounts contributed to the deferred compensation
plan and all earnings on those amounts must be held for the exclusive benefit of the plan
participants and beneficiaries. These amounts must be held in trust, in custodial accounts,
or in qualifying annuity contracts as required by federal law in accordance with section
356A.06, subdivision 1.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 7. Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
to read:
    Subd. 4b. Employer contribution prohibition. Except as authorized in section
356.24, subdivision 1, clause (5), employer contributions are prohibited.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 8. Minnesota Statutes 2012, section 352.98, subdivision 2, is amended to read:
    Subd. 2. Contracting authorized. (a) The executive director shall administer
the plan and contract with public and private entities to provide investment services,
record keeping, benefit payments, and other functions necessary for the administration of
the plan. If allowed by
    (b) As specified in section 356.645, the Minnesota State Board of Investment, the
Minnesota State Board of Investment supplemental investment funds may be offered as
shall determine an appropriate selection of investment options under that shall be offered
by the health care savings plan or plans.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 9. Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
to read:
    Subd. 1a. State Board of Investment selection of investment products. As
specified in section 356.645, the State Board of Investment shall select investment
products to be available to participants in the retirement program provided by this chapter.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 10. Minnesota Statutes 2012, section 352D.04, is amended by adding a
subdivision to read:
    Subd. 1b. Participant selection of investments. (a) A program participant may
elect to participate in one or more of the investment products made available under the
program by specifying the percentage of the participant's contributions under subdivision
2 to be used to purchase shares in the applicable products.
(b) Before making an allocation election, or if the participant fails to specify an
allocation, the executive director shall, on behalf of that participant, purchase shares
in a default investment alternative. The investment alternative must be specified by
the Minnesota State Retirement System Board from the available investment options
authorized under subdivision 1a.
(c) A participant may revise the investment allocation for subsequent purchase of
shares, and a participant or former participant may also change the investment options
selected for all or a portion of shares previously purchased.
(d) Any investment allocation selection authorized under this subdivision, whether
relating to subsequent purchases of new shares or reallocating the existing portfolio,
must be conducted at times and under procedures prescribed by the executive director.
Any allocation or allocation revisions are effective at the end of the most recent United
States investment market day, unless subject to trading restrictions imposed on certain
investment options.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 11. Minnesota Statutes 2012, section 353.27, subdivision 4, is amended to read:
    Subd. 4. Employer reporting requirements; contributions; member status.
(a) A representative authorized by the head of each department shall deduct employee
contributions from the salary of each public employee who qualifies for membership in
the general employees retirement plan of the Public Employees Retirement Association
or in the public employees police and fire retirement plan under this chapter or chapter
353D or 353E at the rate under section 353.27, 353.65, 353D.03, or 353E.03, whichever is
applicable, that is in effect on the date the salary is paid. The employer representative must
also remit payment in a manner prescribed by the executive director for the aggregate
amount of the employee contributions and the required employer contributions to be
received by the association within 14 calendar days after each pay date. If the payment is
less than the amount required, the employer must pay the shortage amount to the association
and collect reimbursement of any employee contribution shortage paid on behalf of a
member through subsequent payroll withholdings from the wages of the employee.
Payment of shortages in employee contributions and associated employer contributions, if
applicable, must include interest at the rate specified in section 353.28, subdivision 5, if not
received within 30 days following the date the amount was initially due under this section.
(b) The head of each department or the person's designee shall submit for each
pay period to the association a salary deduction report in the format prescribed by the
executive director. The report must be received by the association within 14 calendar
days after each pay date or the employer may be assessed a fine of $5 per calendar day
until the association receives the required data. Data required as part of salary deduction
reporting must include, but are not limited to:
(1) the legal names and Social Security numbers of employees who are members;
(2) the amount of each employee's salary deduction;
(3) the amount of salary defined in section 353.01, subdivision 10, earned in the pay
period from which each deduction was made, including a breakdown of the portion of the
salary that represents overtime pay that the employee was paid for additional hours worked
beyond the regularly scheduled hours, pay for unused compensatory time, and the salary
amount earned by a reemployed annuitant under section 353.37, subdivision 1, or 353.371,
subdivision 1 , or by a disabled member under section 353.33, subdivision 7 or 7a;
(4) the beginning and ending dates of the payroll period covered and the date of
actual payment; and
(5) adjustments or corrections covering past pay periods as authorized by the
executive director.
(c) Employers must furnish the data required for enrollment for each new or
reinstated employee who qualifies for membership in the general employees retirement
plan of the Public Employees Retirement Association or in the public employees police
and fire retirement plan in the format prescribed by the executive director. The required
enrollment data on new members must be submitted to the association prior to or
concurrent with the submission of the initial employee salary deduction. Also, the
employer shall report to the association all member employment status changes, such as
leaves of absence, terminations, and death, and shall report the effective dates of those
changes, on an ongoing basis for the payroll cycle in which they occur. If an employer
fails to comply with the reporting requirements under this paragraph, the executive
director may assess a fine of $25 for each failure if the association staff has notified the
employer of the noncompliance and attempted to obtain the missing data or form from the
employer for a period of more than three months.
(d) The employer shall furnish data, forms, and reports as may be required by
the executive director for proper administration of the retirement system. Before
implementing new or different computerized reporting requirements, the executive
director shall give appropriate advance notice to governmental subdivisions to allow time
for system modifications.
(e) Notwithstanding paragraph (a), the executive director may provide for less
frequent reporting and payments for small employers.
(f) The executive director may establish reporting procedures and methods as
required to review compliance by employers with the salary and contribution reporting
requirements in this chapter. A review of the payroll records of a participating employer
may be conducted by the association on a periodic basis or as a result of concerns known
to exist within a governmental subdivision. An employer under review must extract
requested data and provide records to the association after receiving reasonable advanced
notice. Failure to provide requested information or materials will result in the employer
being liable to the association for any expenses associated with a field audit, which may
include staff salaries, administrative expenses, and travel expenses.
EFFECTIVE DATE.This section is effective January 1, 2015.

    Sec. 12. Minnesota Statutes 2012, section 353.37, is amended by adding a subdivision
to read:
    Subd. 6. Treatment in certain divorce situations. Notwithstanding other
subdivisions of this section, if a reemployed annuitant whose annuity is suspended or
reduced under this section has a former spouse receiving a portion of the annuity under
section 518.58, subdivision 1, the portion payable to the former spouse must not be
suspended or deferred.
EFFECTIVE DATE.This section is effective retroactively from January 1, 2014.

    Sec. 13. Minnesota Statutes 2012, section 353.371, is amended by adding a subdivision
to read:
    Subd. 8. Program expiration. (a) Initial postretirement option employment
agreements must not be entered into after June 30, 2019.
(b) This section expires on June 30, 2024.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 14. Minnesota Statutes 2013 Supplement, section 353.651, subdivision 4, is
amended to read:
    Subd. 4. Early retirement. (a) A person who becomes a public employees police
and fire retirement plan member after June 30, 2007, or a former member who is reinstated
as a member of the plan after that date, who is at least 50 years of age and is at least
partially vested under section 353.01, subdivision 47, upon the termination of public
service employees police and fire retirement plan membership before July 1, 2014, if the
person is other than a county sheriff or after January 4, 2015, if the person is a county
sheriff is entitled upon application to a retirement annuity equal to the normal annuity
calculated under subdivision 3, reduced by two-tenths of one percent for each month that
the member is under age 55 at the time of retirement.
    (b) Upon the termination of public service employees police and fire retirement
plan membership before July 1, 2014, if the person is other than a county sheriff or
upon the termination of public service before January 5, 2015, if the person is a county
sheriff, any public employees police and fire retirement plan member who first became
a member of the plan before July 1, 2007, and who is not specified in paragraph (a),
upon attaining at least 50 years of age with at least three years of allowable service is
entitled upon application to a retirement annuity equal to the normal annuity calculated
under subdivision 3, reduced by one-tenth of one percent for each month that the member
is under age 55 at the time of retirement.
(c) A person other than a county sheriff who is a member of the public employees
police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a
member of the public employees police and fire retirement plan on or after January 5,
2015, and who is at least 50 years old and is at least partially vested under section 353.01,
subdivision 47, and whose benefit effective date is after July 1, 2014, if other than a
county sheriff or after January 4, 2015, if a county sheriff and on or before July 1, 2019, is
entitled upon application to a retirement annuity equal to the normal annuity calculated
under subdivision 3, reduced for each month the member is under age 55 at the time of
retirement by applying a blended monthly rate that is equivalent to the sum of:
(1) one-sixtieth of the annual rate of five percent, prorated for each month the
person's benefit effective date is after July 1, 2014, or after December 31, 2014, whichever
applies; and
(2) one-sixtieth of the annual rate provided under paragraph (a) or (b), whichever
applies, for each month the person's benefit effective date is before July 1, 2019.
(d) A person other than a county sheriff who is a member of the public employees
police and fire retirement plan on or after July 1, 2014, or a county sheriff who is a member
of the public employees police and fire retirement plan on or after January 5, 2015, and
who is at least 50 years old and is at least partially vested under section 353.01, subdivision
47 , whose benefit effective date is after July 1, 2019, is entitled, upon application, to a
retirement annuity equal to the normal annuity calculated under subdivision 3, reduced by
five percent annually, prorated for each month that the member is under age 55.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 15. Minnesota Statutes 2012, section 353D.05, subdivision 1, is amended to read:
    Subdivision 1. Investment. As further specified under this section, employing unit
contributions, after the deduction of an amount for administrative expenses, and individual
participant contributions must be remitted to invested in the participant's account or
accounts in investment products authorized by the association that are made available
for this purpose by the State Board of Investment for investment in the Minnesota
supplemental investment fund established by under section 11A.17 356.645.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 16. Minnesota Statutes 2012, section 353D.05, is amended by adding a
subdivision to read:
    Subd. 1a. Participant selection of investments. (a) A plan participant may elect
to allocate contributions, made by and on behalf of the participant, in one or more of the
investment products authorized by the association to be made available under the plan,
by specifying the percentage of the participant's contributions to be used to purchase
shares in the authorized products.
(b) If contributions are received before the participant has made an allocation
election, or if the participant fails to specify an allocation, the executive director shall,
on behalf of that participant, purchase shares in a default investment alternative. The
investment option must be specified by the Public Employees Retirement Association board
of trustees from the designated available investment options authorized under this section.
(c) A participant may revise the investment allocation for subsequent purchase of
shares, and a participant or former participant may also change the investment options
selected for all or a portion of shares previously purchased.
(d) Any investment allocation selection authorized under this subdivision, whether
relating to subsequent purchases of new shares or reallocating the existing portfolio, must
be conducted at times and under procedures prescribed by the executive director.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 17. Minnesota Statutes 2012, section 354.44, subdivision 5, is amended to read:
    Subd. 5. Resumption of teaching service after retirement. (a) Any person who
retired under the provisions of this chapter and has thereafter resumed teaching in any
employer unit to which this chapter applies is eligible to continue to receive payments
in accordance with the annuity except that all or a portion of the annuity payments must
be deferred during the calendar year immediately following the fiscal year in which the
person's salary from the teaching service is in an amount greater than $46,000. The
amount of the annuity deferral is one-half of the salary amount in excess of $46,000 and
must be deducted from the annuity payable for the calendar year immediately following
the fiscal year in which the excess amount was earned.
    (b) If the person is retired for only a fractional part of the fiscal year during the initial
year of retirement, the maximum reemployment salary exempt from triggering a deferral
as specified in this subdivision must be prorated for that fiscal year.
    (c) After a person has reached the Social Security normal retirement age, no deferral
requirement is applicable regardless of the amount of salary.
    (d) The amount of the retirement annuity deferral must be handled or disposed
of as provided in section 356.47.
    (e) For the purpose of this subdivision, salary from teaching service includes all
salary or income earned as a teacher as defined in section 354.05, subdivision 2, paragraph
(a), clause (1). Salary from teaching service also includes, but is not limited to:
    (1) all income for services performed as a consultant or an, independent contractor
for, or third-party supplier, or as a employee of a consultant, independent contractor, or
third-party supplier, to an employer unit covered by the provisions of this chapter; and
    (2) the greater of either the income received or an amount based on the rate paid with
respect to an administrative position, consultant, or independent contractor, or third-party
supplier, or as an employee of a consultant, independent contractor, or third-party supplier,
in an employer unit with approximately the same number of pupils and at the same level
as the position occupied by the person who resumes teaching service.
(f) Notwithstanding other paragraphs of this subdivision, if the reemployed annuitant
has a former spouse receiving a portion of the annuity under section 518.58, subdivision 1,
the portion payable to the former spouse must not be deferred.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 18. Minnesota Statutes 2012, section 354.48, subdivision 6a, is amended to read:
    Subd. 6a. Medical adviser; duties. The state commissioner of health or a
licensed physician on the staff of the Department of Health who is designated by the
commissioner is the medical adviser of The executive director may contract with an
accredited independent organization specializing in disability determinations, licensed
physicians, or physicians on the staff of the commissioner of health as designated by the
commissioner, to be the medical advisor to the executive director. The medical adviser
shall designate licensed physicians, licensed chiropractors, or licensed psychologists with
respect to a mental impairment, who shall examine applicants for disability benefits. The
medical adviser shall pass upon all expert reports based on any examinations performed
in order to determine whether a teacher is totally and permanently disabled as defined in
section 354.05, subdivision 14. The medical adviser shall also investigate all health and
medical statements and certificates by or on behalf of a teacher in connection with a
disability benefit, and shall report in writing to the director setting forth any conclusions
and recommendations on all matters referred to the medical adviser.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 19. Minnesota Statutes 2013 Supplement, section 356.415, subdivision 1c,
is amended to read:
    Subd. 1c. Annual postretirement adjustments; PERA-police and fire. (a)
Retirement annuity, disability benefit, or survivor benefit recipients of the public
employees police and fire retirement plan are entitled to a postretirement adjustment
annually on January 1, until funding stability is restored, as follows:
(1) for each annuitant or benefit recipient whose annuity or benefit effective date is
on or before June 1, 2014, who has been receiving the annuity or benefit for at least 12
full months as of the immediate preceding June 30, an amount equal to one percent in
each year; or
(2) for each annuitant or benefit recipient whose annuity or benefit effective date is
on or before June 1, 2014, who has been receiving the annuity or benefit for at least one
full month, but not less than 11 months, as of the immediate preceding June 30, an amount
equal to 1/12 of one percent for each month of annuity or benefit receipt; and
(3) for each annuitant or benefit recipient whose annuity or benefit effective date is
after June 1, 2014, unless section 27 applies, who will have been receiving an annuity
or benefit for at least 36 full months as of the immediate preceding June 30, an amount
equal to one percent; or
(4) for each annuitant or benefit recipient whose annuity or benefit effective date is
after June 1, 2014, unless section 27 applies, who has been receiving the annuity or benefit
for at least 25 full months, but less than 36 months as of the immediate preceding June 30,
an amount equal to 1/12 of one percent for each full month of annuity or benefit receipt
during the fiscal year in which the annuity or benefit was effective.
(b) Retirement annuity, disability benefit, or survivor benefit recipients of the public
employees police and fire retirement plan are entitled to a postretirement adjustment
annually on each January 1 following the restoration of funding stability as defined under
paragraph (c) and during the continuation of funding stability as defined under paragraph
(c), as follows:
(1) for each annuitant or benefit recipient who has been receiving the annuity or
benefit for at least 36 full months as of the immediate preceding June 30, an amount
equal to the percentage increase in the Consumer Price Index for urban wage earners and
clerical workers all items index published by the Bureau of Labor Statistics of the United
States Department of Labor between the immediate preceding June 30 and the June 30
occurring 12 months previous, but not to exceed 2.5 percent; and
(2) for each annuitant or benefit recipient who has been receiving the annuity
or benefit for at least 25 full months, but less than 36 full months, as of the immediate
preceding June 30, an amount equal to 1/12 of the percentage increase in the Consumer
Price Index for urban wage earners and clerical workers all items index published by
the Bureau of Labor Statistics of the United States Department of Labor between the
immediate preceding June 30 and the June 30 occurring 12 months previous for each full
month of annuity or benefit receipt during the fiscal year in which the annuity or benefit
was effective, but not to exceed 1/12 of 2.5 percent for each full month of annuity or
benefit receipt during the fiscal year in which the annuity or benefit was effective.
(c) Funding stability is restored when the market value of assets of the public
employees police and fire retirement plan equals or exceeds 90 percent of the actuarial
accrued liabilities of the applicable plan in the two most recent consecutive actuarial
valuations prepared under section 356.215 and under the standards for actuarial work of
the Legislative Commission on Pensions and Retirement by the approved actuary retained
by the Public Employees Retirement Association under section 356.214.
(d) After having met the definition of funding stability under paragraph (c), a full
or prorated increase, as provided in paragraph (a), clause (1), (2), (3), or (4), whichever
applies, rather than adjustments under paragraph (b), is again applied in a subsequent year
or years if the market value of assets of the public employees police and fire retirement
plan equals or is less than:
(1) 85 percent of the actuarial accrued liabilities of the applicable plan for two
consecutive actuarial valuations; or
(2) 80 percent of the actuarial accrued liabilities of the applicable plan for the most
recent actuarial valuation.
(e) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Public Employees Retirement Association requesting that the
increase not be made.
EFFECTIVE DATE.This section is effective the day following final enactment
and the amendments to this section expire on February 2, 2015.

    Sec. 20. Minnesota Statutes 2012, section 356.635, subdivision 6, is amended to read:
    Subd. 6. Eligible retirement plan. (a) An "eligible retirement plan" is:
(1) an individual retirement account under section 408(a) or 408A of the federal
Internal Revenue Code;
(2) an individual retirement annuity plan under section 408(b) of the federal Internal
Revenue Code;
(3) an annuity plan under section 403(a) of the federal Internal Revenue Code;
(4) a qualified trust plan under section 401(a) of the federal Internal Revenue Code
that accepts the distributee's eligible rollover distribution;
(5) an annuity contract under section 403(b) of the federal Internal Revenue Code;
(6) an eligible deferred compensation plan under section 457(b) of the federal
Internal Revenue Code, which is maintained by a state or local government and which
agrees to separately account for the amounts transferred into the plan; or
(7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an
individual account or annuity treated as an inherited individual retirement account under
section 402(c)(11) of the federal Internal Revenue Code.
(b) For distributions of after-tax contributions which are not includable in gross
income, the after-tax portion may be transferred only to an individual retirement account
or annuity described in section 408(a) or (b) of the federal Internal Revenue Code, to a
Roth individual retirement account described in section 408A of the federal Internal
Revenue Code, or to a qualified plan described in either section 401(a) of the federal
Internal Revenue Code or 403(a) to an annuity contract described in section 403(b) of
the federal Internal Revenue Code, that agrees to separately account for the amounts
transferred, including separately accounting for the portion of the distribution which is
includable in gross income and the portion of the distribution which is not includable.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 21. [356.645] INVESTMENT OF VARIOUS DEFINED CONTRIBUTION
PLAN ASSETS.
The State Board of Investment shall determine the investments to be made available
to plan participants in plans defined in sections 352.965 and 352.98 and chapters 352D
and 353D. Investments made available to plan participants must include at least one
or more of the following:
(1) shares in the Minnesota supplemental investment fund established in section
11A.17;
(2) saving accounts in federally insured financial institutions;
(3) life insurance contracts, fixed annuity contracts, and variable annuity contracts
from companies that are subject to regulation by the commissioner of commerce;
(4) investment options from open-end investment companies registered under the
federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
to 80a-64;
(5) investment options from a firm that is a registered investment adviser under
the Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to
80b-21; and
(6) investment options of a bank as defined in United States Code, title 15, section
80b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
(a), paragraph (1).
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 22. [356.646] PLAN PARTICIPANT INVESTMENT RESPONSIBILITY.
    Subdivision 1. Member investment responsibility. The state, State Board of
Investment and its executive director and staff, plan administrators and their staff, and
participating public employers are not liable and are not responsible for any investment
losses due to choices made by participants or due to qualified default investment
alternatives.
    Subd. 2. Application. This section applies to the:
    (1) Minnesota state deferred compensation plan, established under section 352.965;
    (2) health care savings plan, established under section 352.98;
    (3) unclassified employees retirement program, established under chapter 352D;
    (4) public employees defined contribution plan, established under chapter 353D;
    (5) individual retirement account plan, established under chapter 354B;
    (6) higher education supplemental retirement plan, established under chapter 354C;
and
    (7) Arts Board and Humanities Commission individual retirement account plan,
established under chapter 354D.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 23. Minnesota Statutes 2013 Supplement, section 356.91, is amended to read:
356.91 VOLUNTARY MEMBERSHIP DUES DEDUCTION.
    (a) Upon written authorization of a person receiving an annuity from a public pension
fund administered by the Minnesota State Retirement System or, the Public Employees
Retirement Association, or the Teachers Retirement Association, the executive director of
the public pension fund shall deduct from the retirement annuity an amount requested by
the annuitant to be paid as membership dues or other payments to any labor organization
that is an exclusive bargaining agent representing public employees or an organization
representing retired public employees of which the annuitant is a member and shall, on a
monthly basis, pay the amount to the organization so designated by the annuitant.
    (b) A pension fund and the plan fiduciaries which authorize or administer deductions
of dues payments under paragraph (a) are not liable for failure to properly deduct or transmit
the dues amounts, provided that the fund and the fiduciaries have acted in good faith.
    (c) Any labor organization that is an exclusive bargaining agent representing public
employees or an organization representing retired public employees may conduct blind
mailings to the annuitants of a retirement system specified in paragraph (a) by requesting
that the retirement system mail voluntary membership information and dues deduction
cards to annuitants. Such mailings shall not be for the purpose of supporting or opposing
any candidate, political party, or ballot measure. The organization requesting the blind
mailing shall pay all costs associated with these mailings, including but not limited to
copying, labeling, mailing, postage, and record keeping. In lieu of administering a blind
mailing in-house, a retirement system may transmit annuitant data necessary for conducting
a blind mailing to a mail center pursuant to a secure data share agreement with the mail
center which provides that neither the organization nor any other entity shall have direct
access to the data transmitted by the retirement system. The retirement system shall have
no obligation to approve or disapprove, or otherwise be responsible for, the content of the
mailings. No organization shall conduct more than two blind mailings per calendar year.
EFFECTIVE DATE.This section is effective July 2, 2015.

    Sec. 24. Minnesota Statutes 2013 Supplement, section 363A.36, subdivision 1, is
amended to read:
    Subdivision 1. Scope of application. (a) For all contracts for goods and services in
excess of $100,000, no department or agency of the state shall accept any bid or proposal
for a contract or agreement from any business having more than 40 full-time employees
within this state on a single working day during the previous 12 months, unless the
commissioner is in receipt of the business' affirmative action plan for the employment of
minority persons, women, and qualified disabled individuals. No department or agency of
the state shall execute any such contract or agreement until the affirmative action plan
has been approved by the commissioner. Receipt of a certificate of compliance issued by
the commissioner shall signify that a firm or business has an affirmative action plan that
has been approved by the commissioner. A certificate shall be valid for a period of four
years. A municipality as defined in section 466.01, subdivision 1, that receives state
money for any reason is encouraged to prepare and implement an affirmative action plan
for the employment of minority persons, women, and the qualified disabled and submit the
plan to the commissioner.
    (b) This paragraph applies to a contract for goods or services in excess of $100,000
to be entered into between a department or agency of the state and a business that is
not subject to paragraph (a), but that has more than 40 full-time employees on a single
working day during the previous 12 months in the state where the business has its primary
place of business. A department or agency of the state may not execute a contract or
agreement with a business covered by this paragraph unless the business has a certificate
of compliance issued by the commissioner under paragraph (a) or the business certifies
that it is in compliance with federal affirmative action requirements.
    (c) This section does not apply to contracts entered into by the State Board of
Investment for investment options under section 352.965, subdivision 4 356.645.
(d) The commissioner shall issue a certificate of compliance or notice of denial
within 15 days of the application submitted by the business or firm.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 25. Laws 2009, chapter 169, article 5, section 2, the effective date, as amended by
Laws 2010, chapter 359, article 5, section 27, is amended to read:
EFFECTIVE DATE.This section is effective the day following final enactment
and expires on June 30, 2014. Individuals must not be appointed to a postretirement
option position after that date.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 26. COUNTY SHERIFF TEMPORARY EARLY RETIREMENT
PROVISION.
    Subdivision 1. Application. (a) This section applies to a county sheriff who:
(1) terminates membership in the public employees police and fire retirement plan
after June 30, 2014, and by the final day in office in January 2015 as reported by the county;
(2) is at least age 50 but less than age 55 on the date of termination;
(3) is at least partially vested under Minnesota Statutes, section 353.01, subdivision
47, and meets all applicable requirements for receipt of an early retirement annuity from
the plan; and
(4) has as the benefit effective date the day following termination of public
employees police and fire retirement plan membership.
(b) Notwithstanding any provision of Minnesota Statutes, section 353.651,
subdivision 4, to the contrary, the early retirement annuity applicable to an eligible person
under paragraph (a) is the applicable benefit specified in subdivision 2.
    Subd. 2. Early retirement annuity. (a) If an eligible person became a public
employees police and fire retirement plan member after June 30, 2007, or was a former
member who was reinstated as a member after that date, the person is entitled, upon
application, to the normal annuity calculated under Minnesota Statutes, section 353.651,
subdivision 3, reduced by two-tenths of one percent for each month that the member
is under age 55 at the time of retirement.
(b) If an eligible person became a public employees police and fire retirement plan
member before July 1, 2007, and is covered under paragraph (a), the person is entitled,
upon application, to the normal annuity calculated under Minnesota Statutes, section
353.651, subdivision 3, reduced by one-tenth of one percent for each month that the
member is under age 55 at the time of retirement.
(c) If an eligible person is not fully vested, the annuity computed under this section
must be reduced accordingly.
    Subd. 3. Expiration. This section expires January 1, 2016.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 27. COUNTY SHERIFF TEMPORARY PROVISION; APPLICATION OF
POSTRETIREMENT ADJUSTMENT WAITING PERIOD.
    Subdivision 1. Application. Notwithstanding any provision of Minnesota Statutes,
section 356.415, subdivision 1c, paragraph (a), to the contrary, this section applies to a
county sheriff who:
(1) terminates membership in the public employees police and fire retirement plan
after June 30, 2014, and by the final day in office in January 2015 as reported by the county;
(2) is at least age 50 on the date of membership termination;
(3) is at least partially vested under Minnesota Statutes, section 353.01, subdivision
47, and meets all applicable requirements for receipt of a retirement annuity from the
public employees police and fire retirement plan; and
(4) has as the effective date for the commencement of the retirement annuity the day
following the date on which termination of public employees police and fire retirement
plan membership occurs.
    Subd. 2. Waiting period for initial postretirement adjustment eligibility. A
person to whom subdivision 1 applies is eligible to receive the initial postretirement
adjustment under Minnesota Statutes, section 356.415, subdivision 1c, paragraph (a),
clause (1) or (2), whichever applies, rather than under Minnesota Statutes, section
356.415, subdivision 1c, paragraph (a), clause (3) or (4).
    Subd. 3. Expiration. This section expires February 2, 2015.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 28. REPEALER.
Minnesota Statutes 2012, sections 11A.17, subdivision 4; 352.965, subdivision 5;
352D.04, subdivision 1; and 353D.05, subdivision 2, are repealed.
EFFECTIVE DATE.This section is effective July 1, 2014.

ARTICLE 14

ONE PERSON AND SMALL GROUP RETIREMENT PROVISIONS

    Section 1. PERA-POLICE AND FIRE; DISABILITY BENEFIT APPLICATION
DEADLINE EXTENSION FOR CERTAIN WADENA COUNTY SHERIFF'S
DEPUTIES.
(a) Notwithstanding any provision of Minnesota Statutes, section 353.031 or
353.656, to the contrary, an eligible person described in paragraph (b) is authorized to
file an application for a disability benefit from the public employees police and fire
retirement plan retroactively from the date of a shooting event in which the person was
involved on March 11, 2006.
(b) An eligible person is a person who:
(1) was born on August 11, 1971;
(2) was initially employed as a deputy sheriff by Wadena County on March 9, 2006;
(3) was, by virtue of law enforcement employment, a member of the public
employees police and fire retirement plan;
(4) was involved in the nonfatal shooting incident of a gun-wielding suspect near
Sebelia, Minnesota, on March 11, 2006, without being physically injured;
(5) resigned from the Wadena County sheriff's department in October 2010 after
being treated for mental health issues for the prior six months; and
(6) failed to apply for a mental health-related disability benefit by the November 11,
2007, deadline for applying for a disability benefit from the public employees police and
fire retirement plan based on the March 11, 2006, shooting incident.
(c) If the eligible person files a disability benefit application under paragraph (a)
on or before the expiration date specified in paragraph (d), and if the eligible person is
determined by the Public Employees Retirement Association as being disabled while in
the line of duty as a result of the March 11, 2006, shooting incident, the eligible person
is entitled to receive a duty disability benefit from the public employees police and fire
retirement plan under Minnesota Statutes, section 353.656, subdivision 1 or 1a, including
retroactive benefit payments from April 1, 2006.
(d) The authority for the eligible person to file a disability benefit application under
paragraph (a) expires on July 1, 2015.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. PERMITTING THE PURCHASE OF SALARY CREDIT BY CERTAIN
CURRENT AND FORMER CITY OF DULUTH OR DULUTH AIRPORT
AUTHORITY EMPLOYEES COVERED BY THE GENERAL EMPLOYEES
RETIREMENT PLAN OR THE PUBLIC EMPLOYEES POLICE AND FIRE
RETIREMENT PLAN.
    Subdivision 1. Authorization. Due to a Court of Appeals determination that certain
salary-supplement payments, provided to certain city of Duluth and Duluth Airport
Authority employees and deposited in the employee's deferred compensation account,
should have been considered salary for pension purposes, an eligible person is authorized
to receive the treatment specified in this section if the eligible person chooses to make the
employee contribution equivalent payment specified in this section.
    Subd. 2. Eligible person. (a) An eligible person:
(1) is a current or former employee of the city of Duluth or the Duluth Airport
Authority, employed by that governmental subdivision between August 1, 2007, and
December 31, 2011;
(2) was a participating member of the general employees retirement plan of the
Public Employees Retirement Association or the public employees police and fire
retirement plan for that employment; and
(3) had employer-paid amounts made to the person's deferred compensation account
for which contributions were not made to the applicable Public Employees Retirement
Association plan fund between August 1, 2007, and December 31, 2011, or the date of
the employee's termination of public service under Minnesota Statutes, section 353.01,
subdivision 11a, whichever is earlier, due to an erroneous application of law under which
the Public Employees Retirement Association executive director and board concluded
that these employer-paid amounts were not salary for pension purposes under Minnesota
Statutes, section 353.01, subdivision 10.
(b) A surviving spouse, as defined in this paragraph, is an eligible person for
purposes of this section. A surviving spouse means:
(1) the surviving spouse of an eligible person as defined in paragraph (a) who, at
the time of the eligible person's death, was a deferred annuitant of a Public Employees
Retirement Association plan specified in this section;
(2) the surviving spouse of an eligible person as defined in paragraph (a) receiving
benefits under a joint and survivor annuity from a Public Employees Retirement
Association plan specified in this section; or
(3) the surviving spouse of an eligible person as defined in paragraph (a) receiving a
survivor benefit under Minnesota Statutes, section 353.657.
    Subd. 3. Employee contributions. An eligible person may make payment of an
employee contribution equivalent amount to the fund of the general employees retirement
plan of the Public Employees Retirement Association or the public employees police
and fire retirement plan, whichever provided the coverage. The employee contribution
equivalent amount is the amount of employee contributions that would have been made
by the employee based on the employer-paid amounts made to the person's deferred
compensation account for the period specified in subdivision 2, and the employee
contribution rates to the applicable Public Employees Retirement Association plan during
that period. If an employee contribution equivalent amount is paid, it must be made in
full and in a lump sum.
    Subd. 4. Employer contributions. (a) If an eligible person makes the employee
equivalent contribution under subdivision 3, the city of Duluth or the Duluth Airport
Authority, whichever is the applicable employing unit, may make the corresponding
employer contributions, plus any employer supplemental and employer additional
contributions required by law during the applicable time period.
(b) Any contributions specified under this subdivision must be based on the
employer-paid amounts referred to in subdivision 2, and the contribution rates applicable
during the time period for regular employer contributions, and any employer supplemental
and employer additional contributions, if applicable.
(c) Within 30 days of receipt by the executive director of the Public Employees
Retirement Association of employee equivalent contributions under subdivision 3,
the executive director shall notify the city of Duluth or the Duluth Airport Authority,
whichever is the applicable employer, of amounts due under this subdivision. If the
employer chooses to make the payment specified in this subdivision, payment shall be
remitted by the applicable employer to the executive director for deposit in the applicable
fund within 30 days of notification. If payment is not made in full within that time period,
the executive director shall collect the necessary amounts by applying Minnesota Statutes,
section 353.28, subdivision 6.
    Subd. 5. Benefit adjustments. Upon receipt of the applicable employee equivalent
contribution under subdivision 3 from an eligible person, the executive director shall
revise the records of the Public Employees Retirement Association and grant the person
the additional salary credit. If a retirement, disability, or survivor annuity has commenced,
the executive director must adjust the benefit being paid to include in the calculation the
additional salary on which contributions were paid, and the adjusted benefit must be paid
retroactive from the effective date of the initial benefit payment under the annuity.
    Subd. 6. Restrictions. This section does not apply if service credit and other rights
under the plan were forfeited by taking a refund.
    Subd. 7. Treatment of interest. Notwithstanding any provision in Minnesota
Statutes, chapter 353, to the contrary, all payments specified in this section made by an
eligible person to the executive director for deposit in the applicable Public Employees
Retirement Association fund are to be made without interest. Any payments required from
the employer under this section are also without interest, provided the employer makes
the payment to the executive director within 30 days of notification. Interest shall be
charged, as specified in Minnesota Statutes, section 353.28, on any employer obligations
not paid within the 30-day period.
    Subd. 8. Notification; counseling. The executive director shall notify all active
members, deferred members, retirees, and survivors to whom this section may apply and
shall provide counseling regarding the implications of this section, including payment
requirements and likely adjustments in current or future benefit amounts if employee
equivalent contributions as specified in this section are made.
    Subd. 9. Expiration of salary credit purchase authority. Payment of employee
contribution equivalent amounts, as authorized under this section, is prohibited after
October 31, 2014.
    Subd. 10. Ratification. Actions taken before the effective date of this section by
the executive director and board of the Public Employees Retirement Association, the
city of Duluth, the Duluth Airport Authority, and eligible persons which are otherwise
consistent with this section are ratified.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. PERA-P&F; MILLE LACS BAND PRIOR SERVICE CREDIT
PURCHASE AUTHORIZED.
(a) An eligible person described in paragraph (b) is entitled to purchase allowable
service credit in the public employees police and fire retirement plan for the period
specified in paragraph (c) by remitting the payment calculated under paragraph (d).
(b) An eligible person is a person who:
(1) was born on June 28, 1966;
(2) was initially employed as a full-time police officer by the Mille Lacs tribal
police department on October 29, 1998;
(3) was initially employed as a part-time police officer by the city of Onamia on
July 28, 2002;
(4) was initially employed as a part-time police officer by the city of Pierz on March
14, 2013; and
(5) is an active member of the public employees police and fire retirement plan.
(c) The period of Mille Lacs tribal police department employment available for
purchase is the two-year period of Mille Lacs tribal police department employment
immediately preceding initial active membership in the public employees police and fire
retirement plan in that capacity.
(d) The full actuarial value prior service credit purchase payment amount must be
calculated under Minnesota Statutes, section 356.551.
(e) The eligible person must provide the executive director of the Public Employees
Retirement Association with any relevant requested information pertaining to the service
credit purchase.
(f) Authority to make a service credit purchase under this section expires on June 30,
2015, or upon the eligible person's termination from public employment as defined under
Minnesota Statutes, section 353.01, subdivision 11a, whichever occurs earlier.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. TEACHERS RETIREMENT ASSOCIATION; PROSPECTIVE
TEACHERS RETIREMENT ASSOCIATION COVERAGE; PURCHASE OF
PAST SERVICE CREDIT.
    (a) An eligible person described in paragraph (b) is authorized to become a
coordinated member of the Teachers Retirement Association and to purchase service
and salary credit in the Teachers Retirement Association coordinated plan retroactively
from January 1, 1995, upon making an election under paragraph (c) and upon making all
required payments under paragraphs (d) and (e).
    (b) An eligible person is a person who:
    (1) was born on October 29, 1957;
    (2) has been employed at Mesabi Range Community and Technical College as
an instructor since 1993;
    (3) in 1994 was classified in the unlimited part-time category;
    (4) became eligible for and was covered by the higher education individual
retirement account plan in January 1994; and
    (5) was not offered an election of Teachers Retirement Association coverage, as
required under Laws 1994, chapter 508, article 1, section 10.
    (c) To be eligible for coverage by the Teachers Retirement Association, an eligible
person must submit a written application to the executive director of the Teachers
Retirement Association on a form provided by the Teachers Retirement Association. The
application must include all documentation of the applicability of this section and any
other relevant information that the executive director may require. Teachers Retirement
Association plan membership commences as of September 1, 2014, for an applicable
eligible person, and past salary and service credit is granted from January 1, 1995,
as specified in this section, following receipt by the executive director of the written
application specified in this paragraph and receipt of the payments specified in paragraphs
(d) and (e). The authority granted by this section is voided if the applicable eligible
individual terminates from Minnesota State Colleges and Universities system employment
prior to receipt by the executive director of the Teachers Retirement Association of the
application specified in this paragraph and amounts specified in paragraphs (d) and (e).
Coverage by the Teachers Retirement Association is in lieu of coverage by the individual
retirement account plan.
    (d) If an eligible person makes an election under paragraph (c), the eligible person
shall make, before September 1, 2014, a contribution equal to the excess, if any, of the
employee contributions that the individual would have made if the Teachers Retirement
Association had provided coverage from January 1, 1995, rather than the individual
retirement account plan. These additional contribution amounts shall include 8.5 percent
annual compound interest computed from the date the contribution would have been made
if deducted from salary until paid. The total amount to be paid under this paragraph shall
be determined by the executive director of the Teachers Retirement Association and
written notification of the amount required under this paragraph should be transmitted
to the eligible individual.
    (e) If payment is made under paragraph (d), the value of the applicable eligible
person's higher education individual retirement account plan account shall be determined
as of September 1, 2014, and that account value shall be transferred to the Teachers
Retirement Association on or before September 15, 2014.
    (f) The Teachers Retirement Association shall determine the full actuarial value
imposed upon the Teachers Retirement Association under this section due to the salary
and service credit purchase.
    (g) From the total amount computed under paragraph (f), the executive director of the
Teachers Retirement Association shall subtract the amounts received under paragraphs (d)
and (e). The Minnesota State Colleges and Universities system is authorized to transmit the
remaining amount, if any, to the executive director of the Teachers Retirement Association.
    (h) Any payment amount specified from the Minnesota State Colleges and
Universities system under paragraph (g) shall be transmitted to the Teachers Retirement
Association within one month following receipt of amounts transmitted under paragraphs
(d) and (e), and following notification from the executive director of the Teachers
Retirement Association. If a payment from the Minnesota State Colleges and Universities
system specified under paragraph (g) is not made, the executive director of the Teachers
Retirement Association must notify the commissioner of Minnesota Management and
Budget of this fact and that commissioner must order that amounts specified under
paragraph (g) shall be deducted from appropriations or state aid to the Minnesota
State Colleges and Universities system and be transmitted to the Teachers Retirement
Association.
EFFECTIVE DATE.This section is effective the day following final enactment.