Bill Text: MN HF2028 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Fairmont Police Relief Association consolidated with the Public Employees Police and Fire Retirement Plan and Fund.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2012-01-30 - Introduction and first reading, referred to Government Operations and Elections [HF2028 Detail]
Download: Minnesota-2011-HF2028-Introduced.html
1.2relating to retirement; Fairmont Police Relief Association; consolidating the
1.3relief association with the Public Employees Police and Fire Retirement Plan
1.4and Fund; amending Minnesota Statutes 2011 Supplement, sections 69.77,
1.5subdivisions 1a, 4; 356.215, subdivision 8; Laws 2002, chapter 392, article 1,
1.6section 8; proposing coding for new law in Minnesota Statutes, chapter 353;
1.7repealing Minnesota Statutes 2010, section 423A.06; Laws 1947, chapter 624,
1.8sections 1; 2; 3; 4; 5; 6; 8; 9; 10; 11; 12; 13; 14; 15; 16; 17; 18; 19; 21; 22, as
1.9amended; Laws 1963, chapter 423; Laws 1999, chapter 222, article 3, sections
1.103; 4; 5.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 Section 1. [353.669] CONSOLIDATION OF THE FAIRMONT POLICE RELIEF
1.15ASSOCIATION.
1.16 Subdivision 1. Membership transfer. On the effective date of consolidation, the
1.17retired members, including surviving spouses, of the Fairmont Police Relief Association
1.18are transferred to the public employees police and fire retirement plan, are no longer
1.19members of the former Fairmont Police Relief Association, and are members of the public
1.20employees police and fire retirement plan.
1.21 Subd. 2. Benefit liability transfer. The liability for the payment of retirement
1.22annuities, service pensions, and survivor benefits of the retired members, service
1.23pensioners, surviving spouses, and any other retirement benefit recipients of the former
1.24Fairmont Police Relief Association, as contained in the transferred records of the former
1.25relief association, is transferred to the public employees police and fire retirement plan on
1.26the effective date of consolidation.
2.1 Subd. 3. Transfer of records. On the effective date of consolidation, the
2.2chief administrative officer of the Fairmont Police Relief Association shall transfer all
2.3records and documents relating to the special fund of the former Fairmont Police Relief
2.4Association to the executive director of the Public Employees Retirement Association. To
2.5the extent possible, original copies of all records and documents must be transferred.
2.6 Subd. 4. Transfer of assets; transfer of title to assets. (a) On the effective date of
2.7consolidation, the chief administrative officer of the Fairmont Police Relief Association
2.8shall transfer the entire assets of the special fund of the Fairmont Police Relief Association
2.9to the public employees police and fire retirement fund at market value. Unless ineligible
2.10or inappropriate as determined by the State Board of Investment, the transfer must be
2.11in the form of investment securities and must include any accounts receivable that are
2.12determined by the State Board of Investment as being capable of being collected. The city
2.13of Fairmont must transfer, in cash, an amount equal to the market value, as recognized by
2.14the relief association of any investment securities that are determined by the executive
2.15director of the State Board of Investment to be not in compliance with the requirements
2.16and limitations set forth in sections 11A.09, 11A.14, 11A.23, and 11A.24, or to be
2.17inappropriate for retention in light of the established investment objectives of the State
2.18Board of Investment, or of any accounts receivable that are determined by the executive
2.19director as being incapable of being collected. The legal and beneficial title to assets that
2.20are determined to be noncompliant or inappropriate securities or that are determined to be
2.21uncollectable accounts receivable are transferred from the relief association special fund
2.22to the city of Fairmont as of the effective date of consolidation. Any accounts payable
2.23of the special fund of the Fairmont Police Relief Association on the effective date of
2.24consolidation, are an obligation of the public employees police and fire retirement fund
2.25and reduce the value of the transferred relief association special fund assets for purposes
2.26of subdivision 6. Assets transferred from the special fund of the Fairmont Police Relief
2.27Association must be deposited in the public employees police and fire retirement fund
2.28and must be managed by the State Board of Investment through the Minnesota combined
2.29investment funds under section 11A.14.
2.30(b) Upon the transfer of the assets to the management of the State Board of
2.31Investment under paragraph (a), legal title to those transferred assets vests with the State
2.32Board of Investment on behalf of the public employees police and fire retirement plan,
2.33and beneficial title to the transferred assets remains with the former membership of the
2.34former Fairmont Police Relief Association.
2.35(c) The public employees police and fire retirement plan and fund is the successor in
2.36interest to all claims for and against the Fairmont Police Relief Association. The public
3.1employees police and fire retirement plan and fund is not liable for any claim against the
3.2Fairmont Police Relief Association or its governing board acting in a fiduciary capacity
3.3under chapter 356A or under common law which is founded upon a claim of a breach of
3.4fiduciary duty if the act or acts constituting the claimed breach were not undertaken in
3.5good faith. The public employees police and fire retirement plan may assert any applicable
3.6defense to any claim in any judicial or administrative proceeding that the former Fairmont
3.7Police Relief Association or its former governing board would otherwise have been
3.8entitled to assert and the public employees police and fire retirement plan may assert any
3.9applicable defense that it has in its capacity as a statewide agency.
3.10(d) The Public Employees Retirement Association shall indemnify any former
3.11fiduciary of the Fairmont Police Relief Association consistent with the provisions of
3.12section 356A.11. The indemnification may be effected by the purchase by the Public
3.13Employees Retirement Association of reasonable fiduciary liability tail insurance for the
3.14officers and directors of the former Fairmont Police Relief Association.
3.15 Subd. 5. Benefits. (a) The annuities, service pensions, and other retirement benefits
3.16of or attributable to retired members and surviving spouses of the Fairmont Police Relief
3.17Association who had that status as of the effective date of consolidation, continue after
3.18consolidation in the same amount and under the same terms as provided under Minnesota
3.19Statutes 2000, sections 423.41 to 423.46, 423.48 to 423.59, 423.61, and 423.62; Laws
3.201963, chapter 423; Laws 1977, chapter 100; and Laws 1999, chapter 222, article 3, section
3.214, except as provided in paragraph (b).
3.22(b) The annual base salary figure for pension and benefit determinations upon
3.23consolidation and for the balance of calendar year 2012 is $106,666.67 and for calendar
3.24years after 2012 is the prior calendar year's annual base pay plus an increase equal to the
3.25adjustment percentage under section 356.415, subdivision 1c, effective as of January
3.261 of that calendar year. After December 31, 2012, annual postretirement adjustments
3.27of pensions and benefits in force must be calculated solely under section 356.415,
3.28subdivision 1c.
3.29 Subd. 6. Employer contributions. (a) As of the effective date of consolidation, the
3.30approved actuary retained by the Public Employees Retirement Association shall calculate
3.31the present value of future benefits of the former Fairmont Police Relief Association
3.32special fund and, by subtracting the market value of the transferred assets of the Fairmont
3.33Police Relief Association as of the effective date of consolidation, the remainder present
3.34value of future benefits amount, if any. Annually, on or before December 31, if there is a
3.35remainder present value of future benefits account, the city of Fairmont shall pay to the
3.36public employees police and fire retirement fund an amount sufficient, on a level annual
4.1dollar basis, to amortize the calculated remainder present value of future benefits amount
4.2by December 31, 2020.
4.3(b) If, after the effective date of consolidation, the postretirement or preretirement
4.4interest rate actuarial assumption applicable to the public employees police and fire
4.5retirement plan under section 356.215, subdivision 8, is modified from the rates specified
4.6in Minnesota Statutes 2010, section 356.215, subdivision 8, the remainder present value of
4.7future benefits amount calculation under paragraph (a), updated for the passage of time,
4.8must be revised and the amortization contribution by the city of Fairmont for the balance
4.9of the amortization period must be redetermined and certified to the city of Fairmont.
4.10 Sec. 2. TERMINATION OF THE FAIRMONT POLICE RELIEF
4.11ASSOCIATION.
4.12On the effective date of consolidation, the Fairmont Police Relief Association
4.13ceases to exist.
4.14 Sec. 3. REPEALER.
4.15Laws 1963, chapter 423; and Laws 1999, chapter 222, article 3, sections 3; 4; and
4.165, are repealed.
4.17 Sec. 4. EFFECTIVE DATE.
4.18Sections 1 to 3 are effective as of the last day of the month in which final enactment
4.19occurs.
4.22 Section 1. Minnesota Statutes 2011 Supplement, section 69.77, subdivision 1a, is
4.23amended to read:
4.24 Subd. 1a. Covered retirement plans. The provisions of this section apply to the
4.25following local retirement plans:
4.26(1) the Bloomington Firefighters Relief Association; and
4.27(2) the Fairmont Police Relief Association; and
4.28(3) (2) the Virginia Fire Department Relief Association.
4.29 Sec. 2. Minnesota Statutes 2011 Supplement, section 69.77, subdivision 4, is amended
4.30to read:
5.1 Subd. 4. Relief association financial requirements; minimum municipal
5.2obligation. (a) The officers of the relief association shall determine the financial
5.3requirements of the relief association and minimum obligation of the municipality for
5.4the following calendar year in accordance with the requirements of this subdivision.
5.5The financial requirements of the relief association and the minimum obligation of the
5.6municipality must be determined on or before the submission date established by the
5.7municipality under subdivision 5.
5.8(b) The financial requirements of the relief association for the following calendar
5.9year must be based on the most recent actuarial valuation or survey of the special fund of
5.10the association if more than one fund is maintained by the association, or of the association,
5.11if only one fund is maintained, prepared in accordance with sections356.215, subdivisions
5.124 to 15 , and
356.216 , as required under subdivision 10. If an actuarial estimate is prepared
5.13by the actuary of the relief association as part of obtaining a modification of the benefit
5.14plan of the relief association and the modification is implemented, the actuarial estimate
5.15must be used in calculating the subsequent financial requirements of the relief association.
5.16(c) If the relief association has an unfunded actuarial accrued liability as reported in
5.17the most recent actuarial valuation or survey, the total of the amounts calculated under
5.18clauses (1), (2), and (3), constitute the financial requirements of the relief association for
5.19the following year. If the relief association does not have an unfunded actuarial accrued
5.20liability as reported in the most recent actuarial valuation or survey, the amount calculated
5.21under clauses (1) and (2) constitute the financial requirements of the relief association for
5.22the following year. The financial requirement elements are:
5.23(1) the normal level cost requirement for the following year, expressed as a dollar
5.24amount, which must be determined by applying the normal level cost of the relief
5.25association as reported in the actuarial valuation or survey and expressed as a percentage
5.26of covered payroll to the estimated covered payroll of the active membership of the relief
5.27association, including any projected change in the active membership, for the following
5.28year;
5.29(2) for the Bloomington Fire Department Relief Association, the Fairmont Police
5.30Relief Association, and the Virginia Fire Department Relief Association, to the dollar
5.31amount of normal cost determined under clause (1) must be added an amount equal to the
5.32dollar amount of the administrative expenses of the special fund of the association if more
5.33than one fund is maintained by the association, or of the association if only one fund is
5.34maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
5.35expenses are those authorized under section69.80 ; and
6.1(3) to the dollar amount of normal cost and expenses determined under clauses
6.2(1) and (2) must be added an amount equal to the level annual dollar amount which
6.3is sufficient to amortize the unfunded actuarial accrued liability as determined from
6.4the actuarial valuation or survey of the fund, using an interest assumption set at the
6.5applicable rate specified in section356.215, subdivision 8 , by that fund's amortization
6.6date as specified in paragraph (d).
6.7(d) The Virginia Fire Department Relief Association special fund amortization date
6.8is December 31, 2010.The Fairmont Police Relief Association special fund amortization
6.9date is December 31, 2020. The Bloomington Fire Department Relief Association
6.10special fund amortization date is determined under section356.216 , clause (2). The
6.11amortization date specified in this paragraph supersedes any amortization date specified in
6.12any applicable special law.
6.13(e) The minimum obligation of the municipality is an amount equal to the financial
6.14requirements of the relief association reduced by the estimated amount of member
6.15contributions from covered salary anticipated for the following calendar year and the
6.16estimated amounts anticipated for the following calendar year from the applicable state aid
6.17program established under sections69.011 to
69.051 receivable by the relief association
6.18after any allocation made under section69.031, subdivision 5 , paragraph (b), clause (2),
6.19or423A.01, subdivision 2 , paragraph (a), clause (6), from the local police and salaried
6.20firefighters' relief association amortization aid program established under section423A.02,
6.21subdivision 1 , from the supplementary amortization state-aid program established under
6.22section423A.02, subdivision 1a , and from the additional amortization state aid under
6.23section423A.02, subdivision 1b .
6.24 Sec. 3. Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, is
6.25amended to read:
6.26 Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
6.27the applicable following preretirement interest assumption and the applicable following
6.28postretirement interest assumption:
7.14 (b) Before July 1, 2010, the actuarial valuation must use the applicable following
7.15single rate future salary increase assumption, the applicable following modified single
7.16rate future salary increase assumption, or the applicable following graded rate future
7.17salary increase assumption:
7.18 (1) single rate future salary increase assumption
7.26 (2) age-related select and ultimate future salary increase assumption or graded rate
7.27future salary increase assumption
7.34The select calculation is: during the
7.35designated select period, a designated
7.36percentage rate is multiplied by the result of
7.37the designated integer minus T, where T is
7.38the number of completed years of service,
7.39and is added to the applicable future salary
7.40increase assumption. The designated select
8.1period is five years and the designated
8.2integer is five for the general state employees
8.3retirement plan. The designated select period
8.4is ten years and the designated integer is ten
8.5for all other retirement plans covered by
8.6this clause. The designated percentage rate
8.7is: (1) 0.2 percent for the correctional state
8.8employees retirement plan, the State Patrol
8.9retirement plan, and the local government
8.10correctional service retirement plan; (2)
8.110.6 percent for the general state employees
8.12retirement plan; and (3) 0.3 percent for the
8.13teachers retirement plan, the Duluth Teachers
8.14Retirement Fund Association, and the St.
8.15Paul Teachers Retirement Fund Association.
8.16The select calculation for the Duluth Teachers
8.17Retirement Fund Association is 8.00 percent
8.18per year for service years one through seven,
8.197.25 percent per year for service years seven
8.20and eight, and 6.50 percent per year for
8.21service years eight and nine.
8.22 The ultimate future salary increase assumption is:
9.40(3) service-related ultimate future salary increase assumption
10.39 (c) Before July 2, 2010, the actuarial valuation must use the applicable following
10.40payroll growth assumption for calculating the amortization requirement for the unfunded
10.41actuarial accrued liability where the amortization retirement is calculated as a level
10.42percentage of an increasing payroll:
11.15 (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
11.16apply, unless a different salary assumption or a different payroll increase assumption:
11.17 (1) has been proposed by the governing board of the applicable retirement plan;
11.18 (2) is accompanied by the concurring recommendation of the actuary retained under
11.19section356.214, subdivision 1 , if applicable, or by the approved actuary preparing the
11.20most recent actuarial valuation report if section356.214 does not apply; and
11.21 (3) has been approved or deemed approved under subdivision 18.
11.22 Sec. 4. Laws 2002, chapter 392, article 1, section 8, is amended to read:
11.23 Sec. 8. REVISOR INSTRUCTIONS.
11.24(a) In the next and subsequent editions of Minnesota Statutes, the revisor of statutes
11.25shall not print Minnesota Statutes, sections
423.41 to
423.62, but shall denote those
11.26sections as "[LOCAL, CITY OF FAIRMONT, POLICE PENSIONS.]."
11.27(b) In the next and subsequent editions of Minnesota Statutes, the revisor of statutes
11.28shall, in each section indicated in column A, replace the cross-reference specified in
11.29column B with the cross-reference set forth in column C:
12.11 Sec. 5. REPEALER.
12.12(a) Minnesota Statutes 2010, section 423A.06, is repealed.
12.13(b) Laws 1947, chapter 624, sections 1; 2; 3; 4; 5; 6; 8; 9; 10; 11; 12; 13; 14; 15;
12.1416; 17; 18; 19; 21; and 22, as amended, are repealed. The revisor shall show Minnesota
12.15Statutes, sections 423.41, 423.42, 423.43, 423.44, 423.45, 423.46, 423.48, 423.49, 423,50,
12.16423.51, 423.52, 423.53, 423.54, 423.55, 423.56, 423.57, 423.58, 423.59, 423.61, and
12.17423.62, as repealed.
12.18 Sec. 6. EFFECTIVE DATE.
12.19Sections 1 to 5 are effective on the effective date of article 1, section 3.
1.3relief association with the Public Employees Police and Fire Retirement Plan
1.4and Fund; amending Minnesota Statutes 2011 Supplement, sections 69.77,
1.5subdivisions 1a, 4; 356.215, subdivision 8; Laws 2002, chapter 392, article 1,
1.6section 8; proposing coding for new law in Minnesota Statutes, chapter 353;
1.7repealing Minnesota Statutes 2010, section 423A.06; Laws 1947, chapter 624,
1.8sections 1; 2; 3; 4; 5; 6; 8; 9; 10; 11; 12; 13; 14; 15; 16; 17; 18; 19; 21; 22, as
1.9amended; Laws 1963, chapter 423; Laws 1999, chapter 222, article 3, sections
1.103; 4; 5.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 Section 1. [353.669] CONSOLIDATION OF THE FAIRMONT POLICE RELIEF
1.15ASSOCIATION.
1.16 Subdivision 1. Membership transfer. On the effective date of consolidation, the
1.17retired members, including surviving spouses, of the Fairmont Police Relief Association
1.18are transferred to the public employees police and fire retirement plan, are no longer
1.19members of the former Fairmont Police Relief Association, and are members of the public
1.20employees police and fire retirement plan.
1.21 Subd. 2. Benefit liability transfer. The liability for the payment of retirement
1.22annuities, service pensions, and survivor benefits of the retired members, service
1.23pensioners, surviving spouses, and any other retirement benefit recipients of the former
1.24Fairmont Police Relief Association, as contained in the transferred records of the former
1.25relief association, is transferred to the public employees police and fire retirement plan on
1.26the effective date of consolidation.
2.1 Subd. 3. Transfer of records. On the effective date of consolidation, the
2.2chief administrative officer of the Fairmont Police Relief Association shall transfer all
2.3records and documents relating to the special fund of the former Fairmont Police Relief
2.4Association to the executive director of the Public Employees Retirement Association. To
2.5the extent possible, original copies of all records and documents must be transferred.
2.6 Subd. 4. Transfer of assets; transfer of title to assets. (a) On the effective date of
2.7consolidation, the chief administrative officer of the Fairmont Police Relief Association
2.8shall transfer the entire assets of the special fund of the Fairmont Police Relief Association
2.9to the public employees police and fire retirement fund at market value. Unless ineligible
2.10or inappropriate as determined by the State Board of Investment, the transfer must be
2.11in the form of investment securities and must include any accounts receivable that are
2.12determined by the State Board of Investment as being capable of being collected. The city
2.13of Fairmont must transfer, in cash, an amount equal to the market value, as recognized by
2.14the relief association of any investment securities that are determined by the executive
2.15director of the State Board of Investment to be not in compliance with the requirements
2.16and limitations set forth in sections 11A.09, 11A.14, 11A.23, and 11A.24, or to be
2.17inappropriate for retention in light of the established investment objectives of the State
2.18Board of Investment, or of any accounts receivable that are determined by the executive
2.19director as being incapable of being collected. The legal and beneficial title to assets that
2.20are determined to be noncompliant or inappropriate securities or that are determined to be
2.21uncollectable accounts receivable are transferred from the relief association special fund
2.22to the city of Fairmont as of the effective date of consolidation. Any accounts payable
2.23of the special fund of the Fairmont Police Relief Association on the effective date of
2.24consolidation, are an obligation of the public employees police and fire retirement fund
2.25and reduce the value of the transferred relief association special fund assets for purposes
2.26of subdivision 6. Assets transferred from the special fund of the Fairmont Police Relief
2.27Association must be deposited in the public employees police and fire retirement fund
2.28and must be managed by the State Board of Investment through the Minnesota combined
2.29investment funds under section 11A.14.
2.30(b) Upon the transfer of the assets to the management of the State Board of
2.31Investment under paragraph (a), legal title to those transferred assets vests with the State
2.32Board of Investment on behalf of the public employees police and fire retirement plan,
2.33and beneficial title to the transferred assets remains with the former membership of the
2.34former Fairmont Police Relief Association.
2.35(c) The public employees police and fire retirement plan and fund is the successor in
2.36interest to all claims for and against the Fairmont Police Relief Association. The public
3.1employees police and fire retirement plan and fund is not liable for any claim against the
3.2Fairmont Police Relief Association or its governing board acting in a fiduciary capacity
3.3under chapter 356A or under common law which is founded upon a claim of a breach of
3.4fiduciary duty if the act or acts constituting the claimed breach were not undertaken in
3.5good faith. The public employees police and fire retirement plan may assert any applicable
3.6defense to any claim in any judicial or administrative proceeding that the former Fairmont
3.7Police Relief Association or its former governing board would otherwise have been
3.8entitled to assert and the public employees police and fire retirement plan may assert any
3.9applicable defense that it has in its capacity as a statewide agency.
3.10(d) The Public Employees Retirement Association shall indemnify any former
3.11fiduciary of the Fairmont Police Relief Association consistent with the provisions of
3.12section 356A.11. The indemnification may be effected by the purchase by the Public
3.13Employees Retirement Association of reasonable fiduciary liability tail insurance for the
3.14officers and directors of the former Fairmont Police Relief Association.
3.15 Subd. 5. Benefits. (a) The annuities, service pensions, and other retirement benefits
3.16of or attributable to retired members and surviving spouses of the Fairmont Police Relief
3.17Association who had that status as of the effective date of consolidation, continue after
3.18consolidation in the same amount and under the same terms as provided under Minnesota
3.19Statutes 2000, sections 423.41 to 423.46, 423.48 to 423.59, 423.61, and 423.62; Laws
3.201963, chapter 423; Laws 1977, chapter 100; and Laws 1999, chapter 222, article 3, section
3.214, except as provided in paragraph (b).
3.22(b) The annual base salary figure for pension and benefit determinations upon
3.23consolidation and for the balance of calendar year 2012 is $106,666.67 and for calendar
3.24years after 2012 is the prior calendar year's annual base pay plus an increase equal to the
3.25adjustment percentage under section 356.415, subdivision 1c, effective as of January
3.261 of that calendar year. After December 31, 2012, annual postretirement adjustments
3.27of pensions and benefits in force must be calculated solely under section 356.415,
3.28subdivision 1c.
3.29 Subd. 6. Employer contributions. (a) As of the effective date of consolidation, the
3.30approved actuary retained by the Public Employees Retirement Association shall calculate
3.31the present value of future benefits of the former Fairmont Police Relief Association
3.32special fund and, by subtracting the market value of the transferred assets of the Fairmont
3.33Police Relief Association as of the effective date of consolidation, the remainder present
3.34value of future benefits amount, if any. Annually, on or before December 31, if there is a
3.35remainder present value of future benefits account, the city of Fairmont shall pay to the
3.36public employees police and fire retirement fund an amount sufficient, on a level annual
4.1dollar basis, to amortize the calculated remainder present value of future benefits amount
4.2by December 31, 2020.
4.3(b) If, after the effective date of consolidation, the postretirement or preretirement
4.4interest rate actuarial assumption applicable to the public employees police and fire
4.5retirement plan under section 356.215, subdivision 8, is modified from the rates specified
4.6in Minnesota Statutes 2010, section 356.215, subdivision 8, the remainder present value of
4.7future benefits amount calculation under paragraph (a), updated for the passage of time,
4.8must be revised and the amortization contribution by the city of Fairmont for the balance
4.9of the amortization period must be redetermined and certified to the city of Fairmont.
4.10 Sec. 2. TERMINATION OF THE FAIRMONT POLICE RELIEF
4.11ASSOCIATION.
4.12On the effective date of consolidation, the Fairmont Police Relief Association
4.13ceases to exist.
4.14 Sec. 3. REPEALER.
4.15Laws 1963, chapter 423; and Laws 1999, chapter 222, article 3, sections 3; 4; and
4.165, are repealed.
4.17 Sec. 4. EFFECTIVE DATE.
4.18Sections 1 to 3 are effective as of the last day of the month in which final enactment
4.19occurs.
4.22 Section 1. Minnesota Statutes 2011 Supplement, section 69.77, subdivision 1a, is
4.23amended to read:
4.24 Subd. 1a. Covered retirement plans. The provisions of this section apply to the
4.25following local retirement plans:
4.26(1) the Bloomington Firefighters Relief Association; and
4.27
4.28
4.29 Sec. 2. Minnesota Statutes 2011 Supplement, section 69.77, subdivision 4, is amended
4.30to read:
5.1 Subd. 4. Relief association financial requirements; minimum municipal
5.2obligation. (a) The officers of the relief association shall determine the financial
5.3requirements of the relief association and minimum obligation of the municipality for
5.4the following calendar year in accordance with the requirements of this subdivision.
5.5The financial requirements of the relief association and the minimum obligation of the
5.6municipality must be determined on or before the submission date established by the
5.7municipality under subdivision 5.
5.8(b) The financial requirements of the relief association for the following calendar
5.9year must be based on the most recent actuarial valuation or survey of the special fund of
5.10the association if more than one fund is maintained by the association, or of the association,
5.11if only one fund is maintained, prepared in accordance with sections
5.124 to 15
5.13by the actuary of the relief association as part of obtaining a modification of the benefit
5.14plan of the relief association and the modification is implemented, the actuarial estimate
5.15must be used in calculating the subsequent financial requirements of the relief association.
5.16(c) If the relief association has an unfunded actuarial accrued liability as reported in
5.17the most recent actuarial valuation or survey, the total of the amounts calculated under
5.18clauses (1), (2), and (3), constitute the financial requirements of the relief association for
5.19the following year. If the relief association does not have an unfunded actuarial accrued
5.20liability as reported in the most recent actuarial valuation or survey, the amount calculated
5.21under clauses (1) and (2) constitute the financial requirements of the relief association for
5.22the following year. The financial requirement elements are:
5.23(1) the normal level cost requirement for the following year, expressed as a dollar
5.24amount, which must be determined by applying the normal level cost of the relief
5.25association as reported in the actuarial valuation or survey and expressed as a percentage
5.26of covered payroll to the estimated covered payroll of the active membership of the relief
5.27association, including any projected change in the active membership, for the following
5.28year;
5.29(2) for the Bloomington Fire Department Relief Association
5.30
5.31amount of normal cost determined under clause (1) must be added an amount equal to the
5.32dollar amount of the administrative expenses of the special fund of the association if more
5.33than one fund is maintained by the association, or of the association if only one fund is
5.34maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
5.35expenses are those authorized under section
6.1(3) to the dollar amount of normal cost and expenses determined under clauses
6.2(1) and (2) must be added an amount equal to the level annual dollar amount which
6.3is sufficient to amortize the unfunded actuarial accrued liability as determined from
6.4the actuarial valuation or survey of the fund, using an interest assumption set at the
6.5applicable rate specified in section
6.6date as specified in paragraph (d).
6.7(d) The Virginia Fire Department Relief Association special fund amortization date
6.8is December 31, 2010.
6.9
6.10special fund amortization date is determined under section
6.11amortization date specified in this paragraph supersedes any amortization date specified in
6.12any applicable special law.
6.13(e) The minimum obligation of the municipality is an amount equal to the financial
6.14requirements of the relief association reduced by the estimated amount of member
6.15contributions from covered salary anticipated for the following calendar year and the
6.16estimated amounts anticipated for the following calendar year from the applicable state aid
6.17program established under sections
6.18after any allocation made under section
6.19or
6.20firefighters' relief association amortization aid program established under section
6.21subdivision 1
6.22section
6.23section
6.24 Sec. 3. Minnesota Statutes 2011 Supplement, section 356.215, subdivision 8, is
6.25amended to read:
6.26 Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
6.27the applicable following preretirement interest assumption and the applicable following
6.28postretirement interest assumption:
7.14 (b) Before July 1, 2010, the actuarial valuation must use the applicable following
7.15single rate future salary increase assumption, the applicable following modified single
7.16rate future salary increase assumption, or the applicable following graded rate future
7.17salary increase assumption:
7.18 (1) single rate future salary increase assumption
7.26 (2) age-related select and ultimate future salary increase assumption or graded rate
7.27future salary increase assumption
7.34The select calculation is: during the
7.35designated select period, a designated
7.36percentage rate is multiplied by the result of
7.37the designated integer minus T, where T is
7.38the number of completed years of service,
7.39and is added to the applicable future salary
7.40increase assumption. The designated select
8.1period is five years and the designated
8.2integer is five for the general state employees
8.3retirement plan. The designated select period
8.4is ten years and the designated integer is ten
8.5for all other retirement plans covered by
8.6this clause. The designated percentage rate
8.7is: (1) 0.2 percent for the correctional state
8.8employees retirement plan, the State Patrol
8.9retirement plan, and the local government
8.10correctional service retirement plan; (2)
8.110.6 percent for the general state employees
8.12retirement plan; and (3) 0.3 percent for the
8.13teachers retirement plan, the Duluth Teachers
8.14Retirement Fund Association, and the St.
8.15Paul Teachers Retirement Fund Association.
8.16The select calculation for the Duluth Teachers
8.17Retirement Fund Association is 8.00 percent
8.18per year for service years one through seven,
8.197.25 percent per year for service years seven
8.20and eight, and 6.50 percent per year for
8.21service years eight and nine.
8.22 The ultimate future salary increase assumption is:
9.40(3) service-related ultimate future salary increase assumption
10.39 (c) Before July 2, 2010, the actuarial valuation must use the applicable following
10.40payroll growth assumption for calculating the amortization requirement for the unfunded
10.41actuarial accrued liability where the amortization retirement is calculated as a level
10.42percentage of an increasing payroll:
11.15 (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
11.16apply, unless a different salary assumption or a different payroll increase assumption:
11.17 (1) has been proposed by the governing board of the applicable retirement plan;
11.18 (2) is accompanied by the concurring recommendation of the actuary retained under
11.19section
11.20most recent actuarial valuation report if section
11.21 (3) has been approved or deemed approved under subdivision 18.
11.22 Sec. 4. Laws 2002, chapter 392, article 1, section 8, is amended to read:
11.23 Sec. 8. REVISOR INSTRUCTIONS.
11.24
11.25
11.26
11.27
11.28shall, in each section indicated in column A, replace the cross-reference specified in
11.29column B with the cross-reference set forth in column C:
12.11 Sec. 5. REPEALER.
12.12(a) Minnesota Statutes 2010, section 423A.06, is repealed.
12.13(b) Laws 1947, chapter 624, sections 1; 2; 3; 4; 5; 6; 8; 9; 10; 11; 12; 13; 14; 15;
12.1416; 17; 18; 19; 21; and 22, as amended, are repealed. The revisor shall show Minnesota
12.15Statutes, sections 423.41, 423.42, 423.43, 423.44, 423.45, 423.46, 423.48, 423.49, 423,50,
12.16423.51, 423.52, 423.53, 423.54, 423.55, 423.56, 423.57, 423.58, 423.59, 423.61, and
12.17423.62, as repealed.
12.18 Sec. 6. EFFECTIVE DATE.
12.19Sections 1 to 5 are effective on the effective date of article 1, section 3.
