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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

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-Introduced.html

---

A bill for an act

relating to retirement; providing for the consolidation of the Duluth Teachers
Retirement Fund Association retirement plan and fund into the statewide Teachers
Retirement Association; amending Minnesota Statutes 2012, sections 13.632,
subdivision 1; 122A.18, subdivision 7a; 354.05, subdivisions 2, 13; 354.42,
subdivisions 2, 3; 354A.011, subdivisions 11, 15a, 27; 354A.021, subdivision
1; 354A.092; 354A.093, subdivision 1; 354A.096; 354A.12, subdivision 2;
354A.31, subdivision 1; 354A.32, subdivision 1; 354A.35, subdivision 1;
354A.37, subdivisions 3, 4; 354A.39; 354A.41; 354B.21, subdivision 3a;
355.01, subdivision 2c; 356.302, subdivision 7; 356.303, subdivision 4; 356.32,
subdivision 2; 356.42, subdivision 3; 356.465, subdivision 3; 356.47, subdivision
3; 356.99, subdivision 1; Minnesota Statutes 2013 Supplement, sections 353.01,
subdivision 2b; 354.436; 354.44, subdivision 6; 354A.12, subdivisions 1, 2a,
3a; 356.20, subdivision 2; 356.214, subdivision 1; 356.215, subdivision 8;
356.219, subdivision 8; 356.30, subdivision 3; 356.401, subdivision 3; 423A.02,
subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 354;
repealing Minnesota Statutes 2012, sections 354A.021, subdivision 5; 354A.108;
354A.24; 354A.27, subdivision 5; 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:

    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 $15,047,000 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 date when: (1) 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; and (2) 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 45.
    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. 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. 16. 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. 17. 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. 18. 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. 19. 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. 20. 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. 21. 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 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.

    Sec. 22. 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. 23. 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. 24. 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. 25. 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. 26. 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. 27. 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. 28. 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. 29. 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. 30. 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.

    Sec. 31. 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. 32. 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. 33. 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. 34. 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. 35. 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. 36. 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. 37. 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. 38. 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. 39. 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. 40. 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. 41. 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. 42. 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. 43. 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. 44. 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. 45. CONSOLIDATION OF THE 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 the entire assets of the special retirement fund of the
Duluth Teachers Retirement Fund Association. The transfer of the assets of the Duluth
Teachers Retirement Fund Association special retirement fund must include any accounts
receivable that are determined by the executive director of the State Board of Investment
as reasonably capable of being collected. Legal title to account receivables that are
determined by the executive director of the State Board of Investment as not reasonably
capable of being collected 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. If
the account receivables 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 (d), the amount of any untransferred assets
are a claim against the state aid otherwise payable to Independent School District No. 709,
Duluth, payable by the commissioner of management and budget upon request by the
executive director of the Teachers Retirement Association.
(b) As of June 30, 2015, assets of the special retirement fund 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 pursuant to the provisions of 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 board of trustees
of the Teachers Retirement Association shall contract with the legislative auditor for
necessary audit services associated with the Duluth Teachers Retirement Fund Association
financial activity during 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. The costs of the audit or examination must be paid by the
Teachers Retirement Association. 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. 46. DULUTH TEACHERS RETIREMENT FUND ASSOCIATION
EMPLOYEES.
Effective June 30, 2015, unless the employee elects otherwise, 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,
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 Minnesota Management and Budget.

    Sec. 47. 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. 48. EFFECTIVE DATE.
(a) Sections 1 to 47 are effective June 30, 2015, if the following approve the
consolidation provisions before January 1, 2015:
(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, and the legislative auditor 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.