Bill Text: MN SF106 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Virginia fire department relief association consolidation with public employees retirement association (PERA)
Spectrum: Partisan Bill (Independent 2-0)
Status: (Introduced - Dead) 2011-01-24 - Referred to State Government Innovation and Veterans [SF106 Detail]
Download: Minnesota-2011-SF106-Introduced.html
1.2relating to retirement; public employees retirement association; Virginia Fire
1.3Department Relief Association; authorizing an administrative consolidation
1.4of the relief association; amending Minnesota Statutes 2010, sections 69.77,
1.5subdivisions 1a, 4; 353.01, subdivision 2a; 353.05; 353.06; 353.15, subdivision
1.61; 353.37, subdivision 1; 353.65, subdivision 1, by adding a subdivision;
1.7353.68, subdivision 1; 356.20, subdivision 2; 356.214, subdivision 1; 356.215,
1.8subdivisions 8, 11; 356.401, subdivision 3; 356.407, subdivision 2; 356.465,
1.9subdivision 3; 423A.02, subdivision 1b; proposing coding for new law in
1.10Minnesota Statutes, chapter 353.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.12 Section 1. Minnesota Statutes 2010, section 69.77, subdivision 1a, is amended to read:
1.13 Subd. 1a. Covered retirement plans. The provisions of this section apply to the
1.14following local retirement plans:
1.15(1) the Bloomington Firefighters Relief Association;
1.16(2) the Fairmont Police Relief Association;
1.17(3) the Minneapolis Firefighters Relief Association; and
1.18(4) the Minneapolis Police Relief Association; and.
1.19(5) the Virginia Fire Department Relief Association.
1.20 Sec. 2. Minnesota Statutes 2010, section 69.77, subdivision 4, is amended to read:
1.21 Subd. 4. Relief association financial requirements; minimum municipal
1.22obligation. (a) The officers of the relief association shall determine the financial
1.23requirements of the relief association and minimum obligation of the municipality for
1.24the following calendar year in accordance with the requirements of this subdivision.
1.25The financial requirements of the relief association and the minimum obligation of the
2.1municipality must be determined on or before the submission date established by the
2.2municipality under subdivision 5.
2.3(b) The financial requirements of the relief association for the following calendar
2.4year must be based on the most recent actuarial valuation or survey of the special fund of
2.5the association if more than one fund is maintained by the association, or of the association,
2.6if only one fund is maintained, prepared in accordance with sections356.215, subdivisions
2.74 to 15 , and
356.216 , as required under subdivision 10. If an actuarial estimate is prepared
2.8by the actuary of the relief association as part of obtaining a modification of the benefit
2.9plan of the relief association and the modification is implemented, the actuarial estimate
2.10must be used in calculating the subsequent financial requirements of the relief association.
2.11(c) If the relief association has an unfunded actuarial accrued liability as reported in
2.12the most recent actuarial valuation or survey, the total of the amounts calculated under
2.13clauses (1), (2), and (3), constitute the financial requirements of the relief association for
2.14the following year. If the relief association does not have an unfunded actuarial accrued
2.15liability as reported in the most recent actuarial valuation or survey, the amount calculated
2.16under clauses (1) and (2) constitute the financial requirements of the relief association for
2.17the following year. The financial requirement elements are:
2.18(1) the normal level cost requirement for the following year, expressed as a dollar
2.19amount, which must be determined by applying the normal level cost of the relief
2.20association as reported in the actuarial valuation or survey and expressed as a percentage
2.21of covered payroll to the estimated covered payroll of the active membership of the relief
2.22association, including any projected change in the active membership, for the following
2.23year;
2.24(2) for the Bloomington Fire Department Relief Association, and the Fairmont Police
2.25Relief Association,and the Virginia Fire Department Relief Association, to the dollar
2.26amount of normal cost determined under clause (1) must be added an amount equal to the
2.27dollar amount of the administrative expenses of the special fund of the association if more
2.28than one fund is maintained by the association, or of the association if only one fund is
2.29maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
2.30expenses are those authorized under section69.80 . No amount of administrative expenses
2.31under this clause are to be included in the financial requirements of the Minneapolis
2.32Firefighters Relief Association or the Minneapolis Police Relief Association; and
2.33(3) to the dollar amount of normal cost and expenses determined under clauses
2.34(1) and (2) must be added an amount equal to the level annual dollar amount which
2.35is sufficient to amortize the unfunded actuarial accrued liability as determined from
2.36the actuarial valuation or survey of the fund, using an interest assumption set at the
3.1applicable rate specified in section356.215, subdivision 8 , by that fund's amortization
3.2date as specified in paragraph (d).
3.3(d) The Minneapolis Firefighters Relief Association special fund amortization date
3.4is determined under section423C.15, subdivisions 3 and 4. The Virginia Fire Department
3.5Relief Association special fund amortization date is December 31, 2010. The Minneapolis
3.6Police Relief Association special fund and the Fairmont Police Relief Association
3.7special fund amortization date is December 31, 2020. The Bloomington Fire Department
3.8Relief Association special fund amortization date is determined under section356.216 ,
3.9paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any
3.10amortization date specified in any applicable special law.
3.11(e) The minimum obligation of the municipality is an amount equal to the financial
3.12requirements of the relief association reduced by the estimated amount of member
3.13contributions from covered salary anticipated for the following calendar year and the
3.14estimated amounts anticipated for the following calendar year from the applicable state aid
3.15program established under sections69.011 to
69.051 receivable by the relief association
3.16after any allocation made under section69.031, subdivision 5 , paragraph (b), clause (2),
3.17or423A.01, subdivision 2 , paragraph (a), clause (6), from the local police and salaried
3.18firefighters' relief association amortization aid program established under section423A.02,
3.19subdivision 1 , from the supplementary amortization state-aid program established under
3.20section423A.02, subdivision 1a , and from the additional amortization state aid under
3.21section423A.02, subdivision 1b .
3.22 Sec. 3. Minnesota Statutes 2010, section 353.01, subdivision 2a, is amended to read:
3.23 Subd. 2a. Included employees; mandatory membership. (a) Public employees
3.24whose salary exceeds $425 in any month and who are not specifically excluded under
3.25subdivision 2b or who have not been provided an option to participate under subdivision
3.262d, whether individually or by action of the governmental subdivision, must participate as
3.27members of the association with retirement coverage by the general employees retirement
3.28plan under this chapter, the public employees police and fire retirement plan under this
3.29chapter, or the local government correctional employees retirement plan under chapter
3.30353E, whichever applies. Membership commences as a condition of their employment on
3.31the first day of their employment or on the first day that the eligibility criteria are met,
3.32whichever is later. Public employees include but are not limited to:
3.33(1) persons whose salary meets the threshold in this paragraph from employment in
3.34one or more positions within one governmental subdivision;
3.35(2) elected county sheriffs;
4.1(3) persons who are appointed, employed, or contracted to perform governmental
4.2functions that by law or local ordinance are required of a public officer, including, but
4.3not limited to:
4.4(i) town and city clerk or treasurer;
4.5(ii) county auditor, treasurer, or recorder;
4.6(iii) city manager as defined in section353.028 who does not exercise the option
4.7provided under subdivision 2d; or
4.8(iv) emergency management director, as provided under section12.25 ;
4.9(4) physicians under section353D.01, subdivision 2 , who do not elect public
4.10employees defined contribution plan coverage under section353D.02, subdivision 2 ;
4.11(5) full-time employees of the Dakota County Agricultural Society; and
4.12(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis
4.13Police Relief Association who are not excluded employees under subdivision 2b due
4.14to coverage by the relief association pension plan and who elected general employee
4.15retirement plan coverage before August 20, 2009.
4.16 (b) A public employee or elected official who was a member of the association on
4.17June 30, 2002, based on employment that qualified for membership coverage by the public
4.18employees retirement plan or the public employees police and fire plan under this chapter,
4.19or the local government correctional employees retirement plan under chapter 353E as of
4.20June 30, 2002, retains that membership for the duration of the person's employment in that
4.21position or incumbency in elected office. Except as provided in subdivision 28, the person
4.22shall participate as a member until the employee or elected official terminates public
4.23employment under subdivision 11a or terminates membership under subdivision 11b.
4.24(c) If the salary of an included public employee is less than $425 in any subsequent
4.25month, the member retains membership eligibility.
4.26(d) For the purpose of participation in the MERF division of the general employees
4.27retirement plan,public employees include employees "public employee" includes an
4.28employee whowere members was a member of the former Minneapolis Employees
4.29Retirement Fund on June 29, 2010, and whoparticipate participates as members a member
4.30of the MERF division of the association.
4.31(e) For the purpose of participation in the Virginia fire division of the public
4.32employees police and fire retirement plan, "public employee" includes a person who
4.33was a member of the Virginia Fire Department Relief Association on the day before
4.34the effective date of this section.
5.1 Sec. 4. Minnesota Statutes 2010, section 353.05, is amended to read:
5.2353.05 CUSTODIAN OF FUNDS.
5.3The commissioner of management and budget shall be ex officio treasurer of the
5.4retirement funds of the association, including the MERF division and the Virginia fire
5.5division, and the general bond of the commissioner of management and budget to the
5.6state must be so conditioned as to cover all liability for acts as treasurer of these funds.
5.7All money of the association received by the commissioner of management and budget
5.8must be set aside in the state treasury to the credit of the proper fund or account. The
5.9commissioner of management and budget shall transmit monthly to the executive director
5.10a detailed statement of all amounts so received and credited to the funds, including the
5.11MERF division and the Virginia fire division. Payments out of the funds, including the
5.12MERF division and the Virginia fire division, may only be made on warrants issued by
5.13the commissioner of management and budget, upon abstracts signed by the executive
5.14director; provided that abstracts for investment may be signed by the executive director of
5.15the State Board of Investment.
5.16 Sec. 5. Minnesota Statutes 2010, section 353.06, is amended to read:
5.17353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
5.18(a) The executive director shall from time to time certify to the State Board of
5.19Investment for investment such portions of the funds of the association, including the
5.20MERF division and the Virginia fire division, as in the director's judgment may not be
5.21required for immediate use. The State Board of Investment shall thereupon invest and
5.22reinvest the sum so certified, or transferred, in such securities as are duly authorized as
5.23legal investments under section11A.24 and. Except for the voluntary statewide lump-sum
5.24volunteer firefighter retirement fund and the Virginia fire division account, the retirement
5.25funds of the retirement plans administered by the board of trustees of the Public Employees
5.26Retirement Association, including the MERF division, must be invested under section
5.2711A.14. The voluntary statewide lump-sum volunteer firefighter retirement fund and
5.28the Virginia fire division account must be invested in the statewide lump-sum volunteer
5.29firefighter account of the Minnesota supplemental investment fund under section 11A.17.
5.30(b) The State Board of Investment has authority to sell, convey, and exchange such
5.31securities and invest and reinvest the securities when it deems it desirable to do so and
5.32shall sell securities upon request of the executive director when such funds are needed
5.33for its purposes.
5.34(c) All of the provisions regarding accounting procedures and restrictions and
5.35conditions for the purchase and sale of securities under chapter 11A must apply to
6.1the accounting, purchase and sale of securities for the funds of the Public Employees
6.2Retirement Association, including the MERF division and the Virginia fire division.
6.3 Sec. 6. Minnesota Statutes 2010, section 353.15, subdivision 1, is amended to read:
6.4 Subdivision 1. Exemption. The provisions of section356.401 apply to the general
6.5employees retirement plan, to the MERF division, to the public employees police and fire
6.6retirement plan, to the Virginia fire division, and to the local government correctional
6.7service retirement plan.
6.8 Sec. 7. Minnesota Statutes 2010, section 353.37, subdivision 1, is amended to read:
6.9 Subdivision 1. Salary maximums. (a) The annuity of a person otherwise eligible
6.10for an annuity from the general employees retirement plan of the Public Employees
6.11Retirement Association, the public employees police and fire retirement plan, or the local
6.12government correctional employees retirement plan must be suspended under subdivision
6.132 or reduced under subdivision 3, whichever results in the higher annual annuity amount, if
6.14the person reenters public service as a nonelective employee of a governmental subdivision
6.15in a position covered by this chapter or returns to work as an employee of a labor
6.16organization that represents public employees who are association members under this
6.17chapter and salary for the reemployment service exceeds the annual maximum earnings
6.18allowable for that age for the continued receipt of full benefit amounts monthly under the
6.19federal Old Age, Survivors and Disability Insurance Program as set by the secretary of
6.20health and human services under United States Code, title 42, section 403, in any calendar
6.21year. If the person has not yet reached the minimum age for the receipt of Social Security
6.22benefits, the maximum salary for the person is equal to the annual maximum earnings
6.23allowable for the minimum age for the receipt of Social Security benefits.
6.24(b) The provisions of paragraph (a) do not apply to the members of the MERF
6.25division or members of the Virginia fire division.
6.26 Sec. 8. Minnesota Statutes 2010, section 353.65, subdivision 1, is amended to read:
6.27 Subdivision 1. Fund established. (a) The public employees police and fire fund
6.28is established for police officers and firefighters who meet the eligibility criteria under
6.29section353.64 .
6.30(b) Employee contributions, employer contributions, other than the excess
6.31contribution established by section69.031, subdivision 5 , paragraphs (2), clauses (b) and
6.32(c), and (3), and other amounts authorized by law, including all employee and employer
7.1contributions of members transferred must be deposited in the public employees police
7.2and fire fund.
7.3(c) From this fund there is appropriated the payments authorized by sections 353.63
7.4to 353.68 in the amounts and at such time provided by law, including the necessary and
7.5reasonable expenses of administering the public employees police and fire retirement
7.6plan and fund.
7.7 Sec. 9. Minnesota Statutes 2010, section 353.65, is amended by adding a subdivision
7.8to read:
7.9 Subd. 1a. Virginia fire division account established; revenue and disbursements.
7.10The Virginia fire division account is established as a special account within the public
7.11employees police and fire retirement fund. The Virginia fire division account includes
7.12all of the assets of the former Virginia Fire Department Relief Association that were
7.13transferred to the administration of the Public Employees Retirement Association under
7.14section 353.668. The special account must be credited with the contributions under section
7.15353.668, subdivision 7, any fire state aid under sections 69.011 to 69.051 payable to
7.16the division account by action of the Virginia city council, investment performance on
7.17the special account assets, and all other income of the division authorized by law. The
7.18payment of annuities and benefits authorized by Laws 1953, chapter 399; Laws 1961,
7.19chapter 420; Laws 1963, chapter 407; Laws 1965, chapter 546; Laws 1969, chapter 578;
7.20Laws 1974, chapter 183; Laws 1982, chapters 574, section 1, and 578, article 1, section
7.2114; Laws 1983, chapter 69, section 1; Laws 1984, chapter 547, section 27; Laws 1987,
7.22chapter 372, article 2, section 14; Laws 1988, chapter 709, article 8, sections 1 and 2; Laws
7.231991, chapter 62, sections 1 and 2; and Laws 1992, chapter 465, section 1, in the amounts
7.24and at the times provided in those laws, and the necessary and reasonable expenses of the
7.25Virginia fire division are appropriated from the special account.
7.26 Sec. 10. [353.668] VIRGINIA FIRE CONSOLIDATION ACCOUNT;
7.27ESTABLISHMENT AND OPERATION.
7.28 Subdivision 1. Administrative consolidation. Notwithstanding any provision
7.29of this chapter or of the governing laws of the former Virginia Fire Department Relief
7.30Association listed in section 353.65, subdivision 1a, to the contrary, the administration of
7.31the Virginia Fire Department Relief Association as the Virginia fire division is transferred
7.32to the Public Employees Retirement Association board of trustees and executive director.
7.33The assets, service credit, and benefit liabilities of the Virginia Fire Department Relief
7.34Association transfer to the Virginia fire division account within the public employees
8.1police and fire retirement fund of the Public Employees Retirement Association
8.2established by section 353.65, subdivision 1a, on the first day of the first month next
8.3following the effective date of this section.
8.4 Subd. 2. Membership transfer. Effective on the first day of the first month next
8.5following the effective date of this section, the members of the Virginia Fire Department
8.6Relief Association are transferred to the Virginia fire division administered by the Public
8.7Employees Retirement Association and are no longer members of the Virginia Fire
8.8Department Relief Association.
8.9 Subd. 3. Service credit and benefit liability transfer. (a) All allowable service
8.10credit and salary credit of the members of the Virginia Fire Department Relief Association
8.11as specified in the records of the Virginia Fire Department Relief Association through
8.12the day before the first day of the first month next following the effective date of this
8.13section are transferred to the Virginia fire division of the Public Employees Retirement
8.14Association and are credited by the Virginia fire division. Survivor benefits of members
8.15of the Virginia fire division entitled to survivor benefits under the governing laws of the
8.16former Virginia Fire Department Relief Association listed in section 353.65, subdivision
8.171a, must be calculated under those listed laws. Each benefit recipient of the Virginia fire
8.18division has the option to elect to have future postretirement adjustments calculated as the
8.19increase amount equal to the percentage increase in the salary of first-grade firefighters of
8.20the Virginia Fire Department for the preceding calendar year, but not to exceed 3.5 percent
8.21in any year, or to have future postretirement adjustments as the increase amount equal
8.22to one percent on January 1, 2012, and equal to the increase determined under section
8.23356.415, subdivision 1c, on January 1, 2013, and thereafter.
8.24(b) The liability for the payment of service pensions, disability pensions, and
8.25survivor benefits to retirees and benefit recipients of the Virginia Fire Department Relief
8.26Association as specified in the records of the Virginia Fire Department Relief Association
8.27on the last day of the month in which this section is effective is transferred to the Virginia
8.28fire division of the Public Employees Retirement Association as of the first day of the first
8.29month next following the effective date of this section.
8.30 Subd. 4. Records transfer. On the last day of the month in which this section is
8.31effective, the secretary of the Virginia Fire Department Relief Association shall transfer
8.32all records and documents relating to the Virginia Fire Department Relief Association and
8.33its benefit plan to the executive director of the Public Employees Retirement Association.
8.34To the extent possible, original copies of all records and documents must be transferred.
8.35 Subd. 5. Transfer of title to assets. (a) On the last of the month in which this
8.36section is effective, legal title to the assets of the special fund of the Virginia Fire
9.1Department Relief Association transfers to the State Board of Investment. The treasurer of
9.2the Virginia Fire Department Relief Association must transfer in cash the assets of the
9.3special fund of the Virginia Fire Department Relief Association on the legal title transfer
9.4date or as soon as is practicable thereafter.
9.5(b) The Virginia fire division is the successor in interest to all claims that the former
9.6Virginia Fire Department Relief Association may have or may assert against any person
9.7and is the successor in interest to all claims which could have been asserted against the
9.8former Virginia Fire Department Relief Association, but the Virginia fire division is not
9.9liable for any claim against the former Virginia Fire Department Relief Association, its
9.10former governing board, or its former officers acting in a fiduciary capacity under chapter
9.11356A or under common law, which is founded upon a claim of breach of fiduciary duty,
9.12but where the act or acts constituting the claimed breach were not undertaken in good
9.13faith. The Public Employees Retirement Association may assert any applicable defense
9.14to any claim in any judicial or administrative proceeding that the former Virginia Fire
9.15Department Relief Association, its former board, or its officers would otherwise have been
9.16entitled to assert. The Public Employees Retirement Association also may assert any
9.17applicable defense that it has in its capacity as a statewide agency.
9.18 Subd. 6. Benefit election. Except as modified with respect to future postretirement
9.19adjustments elected under subdivision 3, paragraph (a), and this subdivision, the benefits
9.20in effect on the first of the month preceding the effective date of this section continue after
9.21the effective date of this section. Before December 31 of the calendar year in which this
9.22section becomes effective, on a date set by the executive director of the Public Employees
9.23Retirement Association, all service pensioners, disabled pensioners, and survivors of the
9.24Virginia fire division shall elect between the alternative postretirement adjustment options
9.25set forth in subdivision 3, paragraph (a). In advance of the benefit election, the executive
9.26director of the Public Employees Retirement Association shall make all reasonable efforts
9.27to provide any necessary benefit counseling to persons who are entitled to make or who
9.28are affected by the election, if benefit counseling is requested by the person. If no election
9.29is made in a timely fashion, the adjustment based on the rate of increase in the salary
9.30of first-grade Virginia Fire Department firefighters must apply to the applicable person
9.31and the person's survivor, if any.
9.32 Subd. 7. Virginia fire division contributions. (a) After December 31 of the
9.33calendar year in which this section is effective, the contributions by the city of Virginia to
9.34the Virginia fire division are governed by this subdivision.
9.35(b) For the initial year after the administrative consolidation is effective, the financial
9.36requirements of the Virginia fire division is an amount equal to the most recent financial
10.1requirements of the executive director of the Public Employees Retirement Association
10.2under section 69.77.
10.3(c) For the second and each succeeding year after the administrative consolidation
10.4is effective, the financial requirements of the Virginia fire division is the total actuarial
10.5required contribution determined under section 356.215 by the approved actuary retained
10.6by the Public Employees Retirement Association in the most recent actuarial valuation
10.7prepared under section 356.215 and the standards for actuarial work adopted by the
10.8Legislative Commission on Pensions and Retirement for the Virginia fire division and the
10.9employer contribution for the Virginia fire division annually is equal to the most recently
10.10reported total actuarial required contribution, reduced by any additional amortization state
10.11aid under section 423A.02, subdivision 1b, paragraph (c), clause (3), but is not less than
10.12the amount by which the amount of the service pensions, disability pensions, and survivor
10.13benefits paid during the preceding calendar year, multiplied by the factor of 1.035,
10.14exceeds the market value of the assets of the Virginia fire division account during the
10.15preceding calendar year, multiplied by the factor of 1.035, and reduced by any additional
10.16amortization state aid under section 423A.02, subdivision 1b, paragraph (c), clause (3).
10.17The employer contributions under this paragraph must be paid as provided in section
10.18353.28 and are subject to the provisions of section 353.27, subdivisions 7, 7a, 7b, and 13.
10.19 Subd. 8. Disposition of Virginia fire division account assets after final benefit
10.20payment. On the first of the month next following the date of the death of the last eligible
10.21beneficiary of the Virginia fire division, the assets of the Virginia fire division account
10.22become assets of the city of Virginia and are either payable in a lump sum to the city of
10.23Virginia or, with any accumulated investment performance, are credits against future
10.24employer contributions of the city of Virginia to the general employees retirement plan of
10.25the Public Employees Retirement Association and the public employees police and fire
10.26retirement plan of the Public Employees Retirement Association, as the city council of
10.27the city of Virginia directs by resolution.
10.28 Sec. 11. Minnesota Statutes 2010, section 353.68, subdivision 1, is amended to read:
10.29 Subdivision 1. Application. The general provisions of this chapter apply to all
10.30police officers and firefighters who are members of the police and fire fundand also, to all
10.31governmental subdivisions employing such members, and to the Virginia fire division,
10.32except where otherwise specifically provided in sections353.63 to
353.68 .
10.33 Sec. 12. Minnesota Statutes 2010, section 356.20, subdivision 2, is amended to read:
11.1 Subd. 2. Covered public pension plans and funds. This section applies to the
11.2following public pension plans:
11.3 (1) the general state employees retirement plan of the Minnesota State Retirement
11.4System;
11.5 (2) the general employees retirement plan of the Public Employees Retirement
11.6Association, including the Minneapolis Employees Retirement Fund division;
11.7 (3) the Teachers Retirement Association;
11.8 (4) the State Patrol retirement plan;
11.9 (5) the St. Paul Teachers Retirement Fund Association;
11.10 (6) the Duluth Teachers Retirement Fund Association;
11.11 (7) the University of Minnesota faculty retirement plan;
11.12 (8) the University of Minnesota faculty supplemental retirement plan;
11.13 (9) the judges retirement fund;
11.14 (10) a police or firefighter's relief association specified or described in section69.77,
11.15subdivision 1a ;
11.16 (11) a volunteer firefighter relief association governed by section69.771, subdivision
11.171 ;
11.18 (12) the public employees police and fire plan of the Public Employees Retirement
11.19Association, including the Virginia fire division;
11.20 (13) the correctional state employees retirement plan of the Minnesota State
11.21Retirement System;
11.22 (14) the local government correctional service retirement plan of the Public
11.23Employees Retirement Association; and
11.24(15) the voluntary statewide lump-sum volunteer firefighter retirement plan.
11.25 Sec. 13. Minnesota Statutes 2010, section 356.214, subdivision 1, is amended to read:
11.26 Subdivision 1. Actuary retention. (a) The governing board or managing or
11.27administrative official of each public pension plan and retirement fund or plan enumerated
11.28in paragraph (b) shall contract with an established actuarial consulting firm to conduct
11.29annual actuarial valuations and related services. The principal from the actuarial
11.30consulting firm on the contract must be an approved actuary under section356.215,
11.31subdivision 1 , paragraph (c).
11.32 (b) Actuarial services must include the preparation of actuarial valuations and
11.33related actuarial work for the following retirement plans:
11.34 (1) the teachers retirement plan, Teachers Retirement Association;
11.35 (2) the general state employees retirement plan, Minnesota State Retirement System;
12.1 (3) the correctional employees retirement plan, Minnesota State Retirement System;
12.2 (4) the State Patrol retirement plan, Minnesota State Retirement System;
12.3 (5) the judges retirement plan, Minnesota State Retirement System;
12.4 (6) the general employees retirement plan, Public Employees Retirement
12.5Association, including the MERF division;
12.6 (7) the public employees police and fire plan, Public Employees Retirement
12.7Association, including the Virginia fire division;
12.8 (8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
12.9Association;
12.10 (9) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
12.11Association;
12.12 (10) the legislators retirement plan, Minnesota State Retirement System;
12.13 (11) the elective state officers retirement plan, Minnesota State Retirement System;
12.14and
12.15 (12) local government correctional service retirement plan, Public Employees
12.16Retirement Association.
12.17 (c) The contracts must require completion of the annual actuarial valuation
12.18calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
12.19as specified in section356.215 , and in conformity with the standards for actuarial work
12.20adopted by the Legislative Commission on Pensions and Retirement.
12.21 The contracts must require completion of annual experience data collection and
12.22processing and a quadrennial published experience study for the plans listed in paragraph
12.23(b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by
12.24the commission. The experience data collection, processing, and analysis must evaluate
12.25the following:
12.26 (1) individual salary progression;
12.27 (2) the rate of return on investments based on the current asset value;
12.28 (3) payroll growth;
12.29 (4) mortality;
12.30 (5) retirement age;
12.31 (6) withdrawal; and
12.32 (7) disablement.
12.33 (d) The actuary shall annually prepare a report to the governing or managing board
12.34or administrative official and the legislature, summarizing the results of the actuarial
12.35valuation calculations. The actuary shall include with the report any recommendations
12.36concerning the appropriateness of the support rates to achieve proper funding of
13.1the retirement plans by the required funding dates. The actuary shall, as part of the
13.2quadrennial experience study, include recommendations on the appropriateness of the
13.3actuarial valuation assumptions required for evaluation in the study.
13.4 (e) If the actuarial gain and loss analysis in the actuarial valuation calculations
13.5indicates a persistent pattern of sizable gains or losses, the governing or managing board
13.6or administrative official shall direct the actuary to prepare a special experience study for
13.7a plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), (10), (11), or (12), in the
13.8manner provided for in the standards for actuarial work adopted by the commission.
13.9 Sec. 14. Minnesota Statutes 2010, section 356.215, subdivision 8, is amended to read:
13.10 Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
13.11the applicable following preretirement interest assumption and the applicable following
13.12postretirement interest assumption:
14.1 (b) Before July 1, 2010, the actuarial valuation must use the applicable following
14.2single rate future salary increase assumption, the applicable following modified single
14.3rate future salary increase assumption, or the applicable following graded rate future
14.4salary increase assumption:
14.5 (1) single rate future salary increase assumption
14.19 (2) age-related select and ultimate future salary increase assumption or graded rate
14.20future salary increase assumption
14.32The select calculation is: during the
14.33designated select period, a designated
14.34percentage rate is multiplied by the result
14.35of the designated integer minus T, where
14.36T is the number of completed years of
14.37service, and is added to the applicable
14.38future salary increase assumption. The
14.39designated select period is five years and the
14.40designated integer is five for the general state
14.41employees retirement plan. The designated
15.1select period is ten years and the designated
15.2integer is ten for all other retirement plans
15.3covered by this clause. The designated
15.4percentage rate is: (1) 0.2 percent for the
15.5correctional state employees retirement plan,
15.6the State Patrol retirement plan, the public
15.7employees police and fire plan, and the local
15.8government correctional service plan; (2)
15.90.6 percent for the general state employees
15.10retirement plan; and (3) 0.3 percent for the
15.11teachers retirement plan, the Duluth Teachers
15.12Retirement Fund Association, and the St.
15.13Paul Teachers Retirement Fund Association.
15.14The select calculation for the Duluth Teachers
15.15Retirement Fund Association is 8.00 percent
15.16per year for service years one through seven,
15.177.25 percent per year for service years seven
15.18and eight, and 6.50 percent per year for
15.19service years eight and nine.
15.20 The ultimate future salary increase assumption is:
16.39(3) service-related ultimate future salary increase assumption
17.29 (c) Before July 2, 2010, the actuarial valuation must use the applicable following
17.30payroll growth assumption for calculating the amortization requirement for the unfunded
17.31actuarial accrued liability where the amortization retirement is calculated as a level
17.32percentage of an increasing payroll:
18.8 (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
18.9apply, unless a different salary assumption or a different payroll increase assumption:
18.10 (1) has been proposed by the governing board of the applicable retirement plan;
18.11 (2) is accompanied by the concurring recommendation of the actuary retained under
18.12section356.214, subdivision 1 , if applicable, or by the approved actuary preparing the
18.13most recent actuarial valuation report if section356.214 does not apply; and
18.14 (3) has been approved or deemed approved under subdivision 18.
18.15 Sec. 15. Minnesota Statutes 2010, section 356.215, subdivision 11, is amended to read:
18.16 Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
18.17the level normal cost, the actuarial valuation of the retirement plan must contain an
18.18exhibit for financial reporting purposes indicating the additional annual contribution
18.19sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
18.20for contribution determination purposes indicating the additional contribution sufficient
18.21to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
18.22subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
18.23Retirement Association and the Virginia fire division of the public employees police and
18.24fire retirement plan, the additional contribution must be calculated on a level percentage of
18.25covered payroll basis by the established date for full funding in effect when the valuation
18.26is prepared, assuming annual payroll growth at the applicable percentage rate set forth in
18.27subdivision 8, paragraph (c). For all other retirement plans, for the Virginia fire division of
18.28the public employees police and fire retirement plan, and for the MERF division of the
18.29Public Employees Retirement Association, the additional annual contribution must be
18.30calculated on a level annual dollar amount basis.
18.31 (b) For any retirement plan other than the general state employees retirement plan
18.32of the Minnesota State Retirement System or a retirement plan governed by paragraph
18.33(d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
18.34used for calculating the actuarial accrued liability of the fund, a change in the benefit
18.35plan governing annuities and benefits payable from the fund, a change in the actuarial
18.36cost method used in calculating the actuarial accrued liability of all or a portion of the
19.1fund, or a combination of the three, which change or changes by itself or by themselves
19.2without inclusion of any other items of increase or decrease produce a net increase in the
19.3unfunded actuarial accrued liability of the fund, the established date for full funding is the
19.4first actuarial valuation date occurring after June 1, 2020.
19.5 (c) For any retirement plan other than the general employees retirement plan of the
19.6Public Employees Retirement Association, if there has been a change in any or all of the
19.7actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
19.8change in the benefit plan governing annuities and benefits payable from the fund, a
19.9change in the actuarial cost method used in calculating the actuarial accrued liability of all
19.10or a portion of the fund, or a combination of the three, and the change or changes, by itself
19.11or by themselves and without inclusion of any other items of increase or decrease, produce
19.12a net increase in the unfunded actuarial accrued liability in the fund, the established date
19.13for full funding must be determined using the following procedure:
19.14 (i) the unfunded actuarial accrued liability of the fund must be determined in
19.15accordance with the plan provisions governing annuities and retirement benefits and the
19.16actuarial assumptions in effect before an applicable change;
19.17 (ii) the level annual dollar contribution or level percentage, whichever is applicable,
19.18needed to amortize the unfunded actuarial accrued liability amount determined under item
19.19(i) by the established date for full funding in effect before the change must be calculated
19.20using the interest assumption specified in subdivision 8 in effect before the change;
19.21 (iii) the unfunded actuarial accrued liability of the fund must be determined in
19.22accordance with any new plan provisions governing annuities and benefits payable from
19.23the fund and any new actuarial assumptions and the remaining plan provisions governing
19.24annuities and benefits payable from the fund and actuarial assumptions in effect before
19.25the change;
19.26 (iv) the level annual dollar contribution or level percentage, whichever is applicable,
19.27needed to amortize the difference between the unfunded actuarial accrued liability amount
19.28calculated under item (i) and the unfunded actuarial accrued liability amount calculated
19.29under item (iii) over a period of 30 years from the end of the plan year in which the
19.30applicable change is effective must be calculated using the applicable interest assumption
19.31specified in subdivision 8 in effect after any applicable change;
19.32 (v) the level annual dollar or level percentage amortization contribution under item
19.33(iv) must be added to the level annual dollar amortization contribution or level percentage
19.34calculated under item (ii);
19.35 (vi) the period in which the unfunded actuarial accrued liability amount determined
19.36in item (iii) is amortized by the total level annual dollar or level percentage amortization
20.1contribution computed under item (v) must be calculated using the interest assumption
20.2specified in subdivision 8 in effect after any applicable change, rounded to the nearest
20.3integral number of years, but not to exceed 30 years from the end of the plan year in
20.4which the determination of the established date for full funding using the procedure set
20.5forth in this clause is made and not to be less than the period of years beginning in the
20.6plan year in which the determination of the established date for full funding using the
20.7procedure set forth in this clause is made and ending by the date for full funding in effect
20.8before the change; and
20.9 (vii) the period determined under item (vi) must be added to the date as of which
20.10the actuarial valuation was prepared and the date obtained is the new established date
20.11for full funding.
20.12 (d) For the MERF division of the Public Employees Retirement Association, the
20.13established date for full funding is June 30, 2031.
20.14 (e) For the general employees retirement plan of the Public Employees Retirement
20.15Association, the established date for full funding is June 30, 2031.
20.16 (f) For the Teachers Retirement Association, the established date for full funding is
20.17June 30, 2037.
20.18 (g) For the correctional state employees retirement plan of the Minnesota State
20.19Retirement System, the established date for full funding is June 30, 2038.
20.20 (h) For the judges retirement plan, the established date for full funding is June
20.2130, 2038.
20.22 (i) For the public employees police and fire retirement plan, the established date
20.23for full funding is June 30, 2038.
20.24 (j) For the St. Paul Teachers Retirement Fund Association, the established date for
20.25full funding is June 30 of the 25th year from the valuation date. In addition to other
20.26requirements of this chapter, the annual actuarial valuation must contain an exhibit
20.27indicating the funded ratio and the deficiency or sufficiency in annual contributions when
20.28comparing liabilities to the market value of the assets of the fund as of the close of the
20.29most recent fiscal year.
20.30(k) For the general state employees retirement plan of the Minnesota State
20.31Retirement System, the established date for full funding is June 30, 2040.
20.32 (l) For the Virginia fire division of the public employees police and fire retirement
20.33plan, the established date for full funding is December 31, 2016.
20.34(m) For the retirement plans for which the annual actuarial valuation indicates
20.35an excess of valuation assets over the actuarial accrued liability, the valuation assets in
20.36excess of the actuarial accrued liability must be recognized as a reduction in the current
21.1contribution requirements by an amount equal to the amortization of the excess expressed
21.2as a level percentage of pay over a 30-year period beginning anew with each annual
21.3actuarial valuation of the plan.
21.4 Sec. 16. Minnesota Statutes 2010, section 356.401, subdivision 3, is amended to read:
21.5 Subd. 3. Covered retirement plans. The provisions of this section apply to the
21.6following retirement plans:
21.7(1) the legislators retirement plan, established by chapter 3A;
21.8(2) the general state employees retirement plan of the Minnesota State Retirement
21.9System, established by chapter 352;
21.10(3) the correctional state employees retirement plan of the Minnesota State
21.11Retirement System, established by chapter 352;
21.12(4) the State Patrol retirement plan, established by chapter 352B;
21.13(5) the elective state officers retirement plan, established by chapter 352C;
21.14(6) the unclassified state employees retirement program, established by chapter
21.15352D;
21.16(7) the general employees retirement plan of the Public Employees Retirement
21.17Association, established by chapter 353, including the MERF division of the Public
21.18Employees Retirement Association;
21.19(8) the public employees police and fire plan of the Public Employees Retirement
21.20Association, established by chapter 353, including the Virginia fire division of the public
21.21employees police and fire plan;
21.22(9) the public employees defined contribution plan, established by chapter 353D;
21.23(10) the local government correctional service retirement plan of the Public
21.24Employees Retirement Association, established by chapter 353E;
21.25(11) the voluntary statewide lump-sum volunteer firefighter retirement plan,
21.26established by chapter 353G;
21.27(12) the Teachers Retirement Association, established by chapter 354;
21.28(13) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
21.29(14) the St. Paul Teachers Retirement Fund Association, established by chapter
21.30354A;
21.31(15) the individual retirement account plan, established by chapter 354B;
21.32(16) the higher education supplemental retirement plan, established by chapter 354C;
21.33(17) the Minneapolis Police Relief Association, established by chapter 423B;
21.34(18) the Minneapolis Firefighters Relief Association, established by chapter 423C;
21.35and
22.1(19) the judges retirement fund, established by chapter 490.
22.2 Sec. 17. Minnesota Statutes 2010, section 356.407, subdivision 2, is amended to read:
22.3 Subd. 2. Covered funds. The provisions of this section apply to the following
22.4retirement funds:
22.5(1) the general employees retirement plan of the Public Employees Retirement
22.6Association established under chapter 353, including the MERF division of the Public
22.7Employees Retirement Association;
22.8(2) the public employees police and fire plan of the Public Employees Retirement
22.9Association established under chapter 353, including the Virginia fire division of the
22.10public employees police and fire plan;
22.11(3) the State Patrol retirement plan established under chapter 352B;
22.12(4) the legislators retirement plan established under chapter 3A;
22.13(5) the elective state officers retirement plan established under chapter 352C; and
22.14(6) the Teachers Retirement Association established under chapter 354.
22.15 Sec. 18. Minnesota Statutes 2010, section 356.465, subdivision 3, is amended to read:
22.16 Subd. 3. Covered retirement plans. The provisions of this section apply to the
22.17following retirement plans:
22.18(1) the general state employees retirement plan of the Minnesota State Retirement
22.19System established under chapter 352;
22.20(2) the correctional state employees retirement plan of the Minnesota State
22.21Retirement System established under chapter 352;
22.22(3) the State Patrol retirement plan established under chapter 352B;
22.23(4) the legislators retirement plan established under chapter 3A;
22.24(5) the judges retirement plan established under chapter 490;
22.25(6) the general employees retirement plan of the Public Employees Retirement
22.26Association established under chapter 353, including the MERF division of the Public
22.27Employees Retirement Association;
22.28(7) the public employees police and fire plan of the Public Employees Retirement
22.29Association established under chapter 353, including the Virginia fire division of the
22.30public employees police and fire plan;
22.31(8) the teachers retirement plan established under chapter 354;
22.32(9) the Duluth Teachers Retirement Fund Association established under chapter
22.33354A;
23.1(10) the St. Paul Teachers Retirement Fund Association established under chapter
23.2354A;
23.3(11) the Minneapolis Firefighters Relief Association established under chapter 423C;
23.4(12) the Minneapolis Police Relief Association established under chapter 423B; and
23.5(13) the local government correctional service retirement plan of the Public
23.6Employees Retirement Association established under chapter 353E.
23.7 Sec. 19. Minnesota Statutes 2010, section 423A.02, subdivision 1b, is amended to read:
23.8 Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the
23.9commissioner of revenue shall allocate the additional amortization state aid transferred
23.10under section69.021, subdivision 11 , to:
23.11 (1) all police or salaried firefighters relief associations governed by and in full
23.12compliance with the requirements of section69.77 , that had an unfunded actuarial accrued
23.13liability in the actuarial valuation prepared under sections356.215 and
356.216 as of the
23.14preceding December 31;
23.15 (2) all local police or salaried firefighter consolidation accounts governed by chapter
23.16353A that are certified by the executive director of the public employees retirement
23.17association as having for the current fiscal year an additional municipal contribution
23.18amount under section353A.09, subdivision 5 , paragraph (b), and that have implemented
23.19section353A.083, subdivision 1 , if the effective date of the consolidation preceded May
23.2024, 1993, and that have implemented section353A.083, subdivision 2 , if the effective date
23.21of the consolidation preceded June 1, 1995; and
23.22 (3) the municipalities that are required to make an additional municipal contribution
23.23under section353.665, subdivision 8 , for the duration of the required additional
23.24contribution.
23.25 (b) The commissioner shall allocate the state aid on the basis of the proportional share
23.26of the relief association or consolidation account of the total unfunded actuarial accrued
23.27liability of all recipient relief associations and consolidation accounts as of December 31,
23.281993, for relief associations, and as of June 30, 1994, for consolidation accounts.
23.29 (c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
23.30allocate the state aid, including any state aid in excess of the limitation in subdivision
23.314, on the following basis:
23.32 (1) 64.5 percent to the municipalities to which section353.665, subdivision
23.338 , paragraph (b), or
353A.09, subdivision 5 , paragraph (b), apply for distribution in
23.34accordance with paragraph (b) and subject to the limitation in subdivision 4;
24.1 (2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
24.2liability in the actuarial valuation prepared under sections356.215 and
356.216 as of the
24.3preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
24.4Fire Department Relief Association; and
24.5 (3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
24.6in the actuarial valuation prepared under sections356.215 and
356.216 as of the preceding
24.7December 31 for the Virginia fireDepartment Relief Association division of the public
24.8employees police and fire retirement plan.
24.9 If there is no unfunded actuarial accrued liability in both the Minneapolis Police
24.10Relief Association and the Minneapolis Fire Department Relief Association as disclosed
24.11in the most recent actuarial valuations for the relief associations prepared under sections
24.12356.215
and
356.216 , the commissioner shall allocate that 34.2 percent of the aid as
24.13follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
24.14Teachers Retirement Fund Association, and 30 percent as additional funding to support
24.15minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
24.16actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
24.17in the most recent actuarial valuation for the relief association prepared under sections
24.18356.215
and
356.216 , the commissioner shall allocate that
1.3 percent of the aid as
24.19follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
24.20Teachers Retirement Fund Association, and 30 percent as additional funding to support
24.21minimum fire state aid for volunteer firefighters relief associations. Upon the final
24.22payment to municipalities required by section353.665, subdivision 8 , paragraph (b),
24.23or353A.09, subdivision 5 , paragraph (b), the commissioner shall allocate that 64.5
24.24percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
24.25Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
24.26liability in the actuarial valuation proposed under sections356.215 and
356.216 as of the
24.27preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
24.28Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
24.29associated with the police and firefighters pensions, and 40 percent as additional funding to
24.30support minimum fire state aid for volunteer firefighters relief associations. The allocation
24.31must be made by the commissioner at the same time and under the same procedures
24.32as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
24.33Association, annually, beginning on July 1, 2005, if the applicable teacher's association
24.34five-year average time-weighted rate of investment return does not equal or exceed the
24.35performance of a composite portfolio assumed passively managed (indexed) invested ten
24.36percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
25.1in domestic stock calculated using the formula under section11A.04 , clause (11), the aid
25.2allocation to that retirement fund under this section ceases until the five-year annual rate
25.3of investment return equals or exceeds the performance of that composite portfolio.
25.4 (d) The amounts required under this subdivision are the amounts annually
25.5appropriated to the commissioner of revenue under section69.021, subdivision 11 ,
25.6paragraph (e).
25.7 Sec. 20. TERMINATION OF VIRGINIA RELIEF ASSOCIATION
25.8SPECIAL FUND; CONTINUATION OF GENERAL FUND AS FRATERNAL
25.9ORGANIZATION.
25.10 Subdivision 1. Special fund termination. Upon the transfer of the assets of the
25.11Virginia Fire Department Relief Association special fund to the Public Employees
25.12Retirement Association and the public employees police and fire retirement fund under
25.13Minnesota Statutes, section 353.668, the special fund of the Virginia Fire Department
25.14Relief Association ceases to exist as a Minnesota public pension fund and the Virginia
25.15Fire Department Relief Association ceases to exist as a Minnesota public pension plan,
25.16succeeded by the Virginia fire division of the public employees police and fire retirement
25.17plan.
25.18 Subd. 2. General fund status. If the board of trustees of the Virginia Fire
25.19Department Relief Association so elects, the general fund of the Virginia Fire Department
25.20Relief Association may continue as the sole fund of the corporation and the relief
25.21association may continue solely as a fraternal organization. The board of trustees of the
25.22relief association functioning solely as a fraternal organization must be composed solely
25.23of former Virginia city firefighters or their survivors. The articles of incorporation and
25.24bylaw provisions of the preconsolidation Virginia Fire Department Relief Association
25.25relating to annual meetings, board of trustee functions, officer functions, and general
25.26fund operations continue to govern.
25.27 Sec. 21. EFFECTIVE DATE; LOCAL APPROVAL.
25.28Sections 1 to 20 are effective the day after the governing body of the city of Virginia
25.29and its chief clerical officer timely complete their compliance with Minnesota Statutes,
25.30section 645.021, subdivisions 2 and 3.
1.3Department Relief Association; authorizing an administrative consolidation
1.4of the relief association; amending Minnesota Statutes 2010, sections 69.77,
1.5subdivisions 1a, 4; 353.01, subdivision 2a; 353.05; 353.06; 353.15, subdivision
1.61; 353.37, subdivision 1; 353.65, subdivision 1, by adding a subdivision;
1.7353.68, subdivision 1; 356.20, subdivision 2; 356.214, subdivision 1; 356.215,
1.8subdivisions 8, 11; 356.401, subdivision 3; 356.407, subdivision 2; 356.465,
1.9subdivision 3; 423A.02, subdivision 1b; proposing coding for new law in
1.10Minnesota Statutes, chapter 353.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.12 Section 1. Minnesota Statutes 2010, section 69.77, subdivision 1a, is amended to read:
1.13 Subd. 1a. Covered retirement plans. The provisions of this section apply to the
1.14following local retirement plans:
1.15(1) the Bloomington Firefighters Relief Association;
1.16(2) the Fairmont Police Relief Association;
1.17(3) the Minneapolis Firefighters Relief Association; and
1.18(4) the Minneapolis Police Relief Association
1.19
1.20 Sec. 2. Minnesota Statutes 2010, section 69.77, subdivision 4, is amended to read:
1.21 Subd. 4. Relief association financial requirements; minimum municipal
1.22obligation. (a) The officers of the relief association shall determine the financial
1.23requirements of the relief association and minimum obligation of the municipality for
1.24the following calendar year in accordance with the requirements of this subdivision.
1.25The financial requirements of the relief association and the minimum obligation of the
2.1municipality must be determined on or before the submission date established by the
2.2municipality under subdivision 5.
2.3(b) The financial requirements of the relief association for the following calendar
2.4year must be based on the most recent actuarial valuation or survey of the special fund of
2.5the association if more than one fund is maintained by the association, or of the association,
2.6if only one fund is maintained, prepared in accordance with sections
2.74 to 15
2.8by the actuary of the relief association as part of obtaining a modification of the benefit
2.9plan of the relief association and the modification is implemented, the actuarial estimate
2.10must be used in calculating the subsequent financial requirements of the relief association.
2.11(c) If the relief association has an unfunded actuarial accrued liability as reported in
2.12the most recent actuarial valuation or survey, the total of the amounts calculated under
2.13clauses (1), (2), and (3), constitute the financial requirements of the relief association for
2.14the following year. If the relief association does not have an unfunded actuarial accrued
2.15liability as reported in the most recent actuarial valuation or survey, the amount calculated
2.16under clauses (1) and (2) constitute the financial requirements of the relief association for
2.17the following year. The financial requirement elements are:
2.18(1) the normal level cost requirement for the following year, expressed as a dollar
2.19amount, which must be determined by applying the normal level cost of the relief
2.20association as reported in the actuarial valuation or survey and expressed as a percentage
2.21of covered payroll to the estimated covered payroll of the active membership of the relief
2.22association, including any projected change in the active membership, for the following
2.23year;
2.24(2) for the Bloomington Fire Department Relief Association
2.25Relief Association,
2.26amount of normal cost determined under clause (1) must be added an amount equal to the
2.27dollar amount of the administrative expenses of the special fund of the association if more
2.28than one fund is maintained by the association, or of the association if only one fund is
2.29maintained, for the most recent year, multiplied by the factor of 1.035. The administrative
2.30expenses are those authorized under section
2.31under this clause are to be included in the financial requirements of the Minneapolis
2.32Firefighters Relief Association or the Minneapolis Police Relief Association; and
2.33(3) to the dollar amount of normal cost and expenses determined under clauses
2.34(1) and (2) must be added an amount equal to the level annual dollar amount which
2.35is sufficient to amortize the unfunded actuarial accrued liability as determined from
2.36the actuarial valuation or survey of the fund, using an interest assumption set at the
3.1applicable rate specified in section
3.2date as specified in paragraph (d).
3.3(d) The Minneapolis Firefighters Relief Association special fund amortization date
3.4is determined under section
3.5
3.6Police Relief Association special fund and the Fairmont Police Relief Association
3.7special fund amortization date is December 31, 2020. The Bloomington Fire Department
3.8Relief Association special fund amortization date is determined under section
3.9paragraph (a), clause (2). The amortization date specified in this paragraph supersedes any
3.10amortization date specified in any applicable special law.
3.11(e) The minimum obligation of the municipality is an amount equal to the financial
3.12requirements of the relief association reduced by the estimated amount of member
3.13contributions from covered salary anticipated for the following calendar year and the
3.14estimated amounts anticipated for the following calendar year from the applicable state aid
3.15program established under sections
3.16after any allocation made under section
3.17or
3.18firefighters' relief association amortization aid program established under section
3.19subdivision 1
3.20section
3.21section
3.22 Sec. 3. Minnesota Statutes 2010, section 353.01, subdivision 2a, is amended to read:
3.23 Subd. 2a. Included employees; mandatory membership. (a) Public employees
3.24whose salary exceeds $425 in any month and who are not specifically excluded under
3.25subdivision 2b or who have not been provided an option to participate under subdivision
3.262d, whether individually or by action of the governmental subdivision, must participate as
3.27members of the association with retirement coverage by the general employees retirement
3.28plan under this chapter, the public employees police and fire retirement plan under this
3.29chapter, or the local government correctional employees retirement plan under chapter
3.30353E, whichever applies. Membership commences as a condition of their employment on
3.31the first day of their employment or on the first day that the eligibility criteria are met,
3.32whichever is later. Public employees include but are not limited to:
3.33(1) persons whose salary meets the threshold in this paragraph from employment in
3.34one or more positions within one governmental subdivision;
3.35(2) elected county sheriffs;
4.1(3) persons who are appointed, employed, or contracted to perform governmental
4.2functions that by law or local ordinance are required of a public officer, including, but
4.3not limited to:
4.4(i) town and city clerk or treasurer;
4.5(ii) county auditor, treasurer, or recorder;
4.6(iii) city manager as defined in section
4.7provided under subdivision 2d; or
4.8(iv) emergency management director, as provided under section
4.9(4) physicians under section
4.10employees defined contribution plan coverage under section
4.11(5) full-time employees of the Dakota County Agricultural Society; and
4.12(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis
4.13Police Relief Association who are not excluded employees under subdivision 2b due
4.14to coverage by the relief association pension plan and who elected general employee
4.15retirement plan coverage before August 20, 2009.
4.16 (b) A public employee or elected official who was a member of the association on
4.17June 30, 2002, based on employment that qualified for membership coverage by the public
4.18employees retirement plan or the public employees police and fire plan under this chapter,
4.19or the local government correctional employees retirement plan under chapter 353E as of
4.20June 30, 2002, retains that membership for the duration of the person's employment in that
4.21position or incumbency in elected office. Except as provided in subdivision 28, the person
4.22shall participate as a member until the employee or elected official terminates public
4.23employment under subdivision 11a or terminates membership under subdivision 11b.
4.24(c) If the salary of an included public employee is less than $425 in any subsequent
4.25month, the member retains membership eligibility.
4.26(d) For the purpose of participation in the MERF division of the general employees
4.27retirement plan,
4.28employee who
4.29Retirement Fund on June 29, 2010, and who
4.30of the MERF division of the association.
4.31(e) For the purpose of participation in the Virginia fire division of the public
4.32employees police and fire retirement plan, "public employee" includes a person who
4.33was a member of the Virginia Fire Department Relief Association on the day before
4.34the effective date of this section.
5.1 Sec. 4. Minnesota Statutes 2010, section 353.05, is amended to read:
5.2353.05 CUSTODIAN OF FUNDS.
5.3The commissioner of management and budget shall be ex officio treasurer of the
5.4retirement funds of the association, including the MERF division and the Virginia fire
5.5division, and the general bond of the commissioner of management and budget to the
5.6state must be so conditioned as to cover all liability for acts as treasurer of these funds.
5.7All money of the association received by the commissioner of management and budget
5.8must be set aside in the state treasury to the credit of the proper fund or account. The
5.9commissioner of management and budget shall transmit monthly to the executive director
5.10a detailed statement of all amounts so received and credited to the funds, including the
5.11MERF division and the Virginia fire division. Payments out of the funds, including the
5.12MERF division and the Virginia fire division, may only be made on warrants issued by
5.13the commissioner of management and budget, upon abstracts signed by the executive
5.14director; provided that abstracts for investment may be signed by the executive director of
5.15the State Board of Investment.
5.16 Sec. 5. Minnesota Statutes 2010, section 353.06, is amended to read:
5.17353.06 STATE BOARD OF INVESTMENT TO INVEST FUNDS.
5.18(a) The executive director shall from time to time certify to the State Board of
5.19Investment for investment such portions of the funds of the association, including the
5.20MERF division and the Virginia fire division, as in the director's judgment may not be
5.21required for immediate use. The State Board of Investment shall thereupon invest and
5.22reinvest the sum so certified, or transferred, in such securities as are duly authorized as
5.23legal investments under section
5.24volunteer firefighter retirement fund and the Virginia fire division account, the retirement
5.25funds of the retirement plans administered by the board of trustees of the Public Employees
5.26Retirement Association, including the MERF division, must be invested under section
5.2711A.14. The voluntary statewide lump-sum volunteer firefighter retirement fund and
5.28the Virginia fire division account must be invested in the statewide lump-sum volunteer
5.29firefighter account of the Minnesota supplemental investment fund under section 11A.17.
5.30(b) The State Board of Investment has authority to sell, convey, and exchange such
5.31securities and invest and reinvest the securities when it deems it desirable to do so and
5.32shall sell securities upon request of the executive director when such funds are needed
5.33for its purposes.
5.34(c) All of the provisions regarding accounting procedures and restrictions and
5.35conditions for the purchase and sale of securities under chapter 11A must apply to
6.1the accounting, purchase and sale of securities for the funds of the Public Employees
6.2Retirement Association, including the MERF division and the Virginia fire division.
6.3 Sec. 6. Minnesota Statutes 2010, section 353.15, subdivision 1, is amended to read:
6.4 Subdivision 1. Exemption. The provisions of section
6.5employees retirement plan, to the MERF division, to the public employees police and fire
6.6retirement plan, to the Virginia fire division, and to the local government correctional
6.7service retirement plan.
6.8 Sec. 7. Minnesota Statutes 2010, section 353.37, subdivision 1, is amended to read:
6.9 Subdivision 1. Salary maximums. (a) The annuity of a person otherwise eligible
6.10for an annuity from the general employees retirement plan of the Public Employees
6.11Retirement Association, the public employees police and fire retirement plan, or the local
6.12government correctional employees retirement plan must be suspended under subdivision
6.132 or reduced under subdivision 3, whichever results in the higher annual annuity amount, if
6.14the person reenters public service as a nonelective employee of a governmental subdivision
6.15in a position covered by this chapter or returns to work as an employee of a labor
6.16organization that represents public employees who are association members under this
6.17chapter and salary for the reemployment service exceeds the annual maximum earnings
6.18allowable for that age for the continued receipt of full benefit amounts monthly under the
6.19federal Old Age, Survivors and Disability Insurance Program as set by the secretary of
6.20health and human services under United States Code, title 42, section 403, in any calendar
6.21year. If the person has not yet reached the minimum age for the receipt of Social Security
6.22benefits, the maximum salary for the person is equal to the annual maximum earnings
6.23allowable for the minimum age for the receipt of Social Security benefits.
6.24(b) The provisions of paragraph (a) do not apply to the members of the MERF
6.25division or members of the Virginia fire division.
6.26 Sec. 8. Minnesota Statutes 2010, section 353.65, subdivision 1, is amended to read:
6.27 Subdivision 1. Fund established. (a) The public employees police and fire fund
6.28is established for police officers and firefighters who meet the eligibility criteria under
6.29section
6.30(b) Employee contributions, employer contributions, other than the excess
6.31contribution established by section
6.32(c), and (3), and other amounts authorized by law, including all employee and employer
7.1contributions of members transferred must be deposited in the public employees police
7.2and fire fund.
7.3(c) From this fund there is appropriated the payments authorized by sections 353.63
7.4to 353.68 in the amounts and at such time provided by law, including the necessary and
7.5reasonable expenses of administering the public employees police and fire retirement
7.6plan and fund.
7.7 Sec. 9. Minnesota Statutes 2010, section 353.65, is amended by adding a subdivision
7.8to read:
7.9 Subd. 1a. Virginia fire division account established; revenue and disbursements.
7.10The Virginia fire division account is established as a special account within the public
7.11employees police and fire retirement fund. The Virginia fire division account includes
7.12all of the assets of the former Virginia Fire Department Relief Association that were
7.13transferred to the administration of the Public Employees Retirement Association under
7.14section 353.668. The special account must be credited with the contributions under section
7.15353.668, subdivision 7, any fire state aid under sections 69.011 to 69.051 payable to
7.16the division account by action of the Virginia city council, investment performance on
7.17the special account assets, and all other income of the division authorized by law. The
7.18payment of annuities and benefits authorized by Laws 1953, chapter 399; Laws 1961,
7.19chapter 420; Laws 1963, chapter 407; Laws 1965, chapter 546; Laws 1969, chapter 578;
7.20Laws 1974, chapter 183; Laws 1982, chapters 574, section 1, and 578, article 1, section
7.2114; Laws 1983, chapter 69, section 1; Laws 1984, chapter 547, section 27; Laws 1987,
7.22chapter 372, article 2, section 14; Laws 1988, chapter 709, article 8, sections 1 and 2; Laws
7.231991, chapter 62, sections 1 and 2; and Laws 1992, chapter 465, section 1, in the amounts
7.24and at the times provided in those laws, and the necessary and reasonable expenses of the
7.25Virginia fire division are appropriated from the special account.
7.26 Sec. 10. [353.668] VIRGINIA FIRE CONSOLIDATION ACCOUNT;
7.27ESTABLISHMENT AND OPERATION.
7.28 Subdivision 1. Administrative consolidation. Notwithstanding any provision
7.29of this chapter or of the governing laws of the former Virginia Fire Department Relief
7.30Association listed in section 353.65, subdivision 1a, to the contrary, the administration of
7.31the Virginia Fire Department Relief Association as the Virginia fire division is transferred
7.32to the Public Employees Retirement Association board of trustees and executive director.
7.33The assets, service credit, and benefit liabilities of the Virginia Fire Department Relief
7.34Association transfer to the Virginia fire division account within the public employees
8.1police and fire retirement fund of the Public Employees Retirement Association
8.2established by section 353.65, subdivision 1a, on the first day of the first month next
8.3following the effective date of this section.
8.4 Subd. 2. Membership transfer. Effective on the first day of the first month next
8.5following the effective date of this section, the members of the Virginia Fire Department
8.6Relief Association are transferred to the Virginia fire division administered by the Public
8.7Employees Retirement Association and are no longer members of the Virginia Fire
8.8Department Relief Association.
8.9 Subd. 3. Service credit and benefit liability transfer. (a) All allowable service
8.10credit and salary credit of the members of the Virginia Fire Department Relief Association
8.11as specified in the records of the Virginia Fire Department Relief Association through
8.12the day before the first day of the first month next following the effective date of this
8.13section are transferred to the Virginia fire division of the Public Employees Retirement
8.14Association and are credited by the Virginia fire division. Survivor benefits of members
8.15of the Virginia fire division entitled to survivor benefits under the governing laws of the
8.16former Virginia Fire Department Relief Association listed in section 353.65, subdivision
8.171a, must be calculated under those listed laws. Each benefit recipient of the Virginia fire
8.18division has the option to elect to have future postretirement adjustments calculated as the
8.19increase amount equal to the percentage increase in the salary of first-grade firefighters of
8.20the Virginia Fire Department for the preceding calendar year, but not to exceed 3.5 percent
8.21in any year, or to have future postretirement adjustments as the increase amount equal
8.22to one percent on January 1, 2012, and equal to the increase determined under section
8.23356.415, subdivision 1c, on January 1, 2013, and thereafter.
8.24(b) The liability for the payment of service pensions, disability pensions, and
8.25survivor benefits to retirees and benefit recipients of the Virginia Fire Department Relief
8.26Association as specified in the records of the Virginia Fire Department Relief Association
8.27on the last day of the month in which this section is effective is transferred to the Virginia
8.28fire division of the Public Employees Retirement Association as of the first day of the first
8.29month next following the effective date of this section.
8.30 Subd. 4. Records transfer. On the last day of the month in which this section is
8.31effective, the secretary of the Virginia Fire Department Relief Association shall transfer
8.32all records and documents relating to the Virginia Fire Department Relief Association and
8.33its benefit plan to the executive director of the Public Employees Retirement Association.
8.34To the extent possible, original copies of all records and documents must be transferred.
8.35 Subd. 5. Transfer of title to assets. (a) On the last of the month in which this
8.36section is effective, legal title to the assets of the special fund of the Virginia Fire
9.1Department Relief Association transfers to the State Board of Investment. The treasurer of
9.2the Virginia Fire Department Relief Association must transfer in cash the assets of the
9.3special fund of the Virginia Fire Department Relief Association on the legal title transfer
9.4date or as soon as is practicable thereafter.
9.5(b) The Virginia fire division is the successor in interest to all claims that the former
9.6Virginia Fire Department Relief Association may have or may assert against any person
9.7and is the successor in interest to all claims which could have been asserted against the
9.8former Virginia Fire Department Relief Association, but the Virginia fire division is not
9.9liable for any claim against the former Virginia Fire Department Relief Association, its
9.10former governing board, or its former officers acting in a fiduciary capacity under chapter
9.11356A or under common law, which is founded upon a claim of breach of fiduciary duty,
9.12but where the act or acts constituting the claimed breach were not undertaken in good
9.13faith. The Public Employees Retirement Association may assert any applicable defense
9.14to any claim in any judicial or administrative proceeding that the former Virginia Fire
9.15Department Relief Association, its former board, or its officers would otherwise have been
9.16entitled to assert. The Public Employees Retirement Association also may assert any
9.17applicable defense that it has in its capacity as a statewide agency.
9.18 Subd. 6. Benefit election. Except as modified with respect to future postretirement
9.19adjustments elected under subdivision 3, paragraph (a), and this subdivision, the benefits
9.20in effect on the first of the month preceding the effective date of this section continue after
9.21the effective date of this section. Before December 31 of the calendar year in which this
9.22section becomes effective, on a date set by the executive director of the Public Employees
9.23Retirement Association, all service pensioners, disabled pensioners, and survivors of the
9.24Virginia fire division shall elect between the alternative postretirement adjustment options
9.25set forth in subdivision 3, paragraph (a). In advance of the benefit election, the executive
9.26director of the Public Employees Retirement Association shall make all reasonable efforts
9.27to provide any necessary benefit counseling to persons who are entitled to make or who
9.28are affected by the election, if benefit counseling is requested by the person. If no election
9.29is made in a timely fashion, the adjustment based on the rate of increase in the salary
9.30of first-grade Virginia Fire Department firefighters must apply to the applicable person
9.31and the person's survivor, if any.
9.32 Subd. 7. Virginia fire division contributions. (a) After December 31 of the
9.33calendar year in which this section is effective, the contributions by the city of Virginia to
9.34the Virginia fire division are governed by this subdivision.
9.35(b) For the initial year after the administrative consolidation is effective, the financial
9.36requirements of the Virginia fire division is an amount equal to the most recent financial
10.1requirements of the executive director of the Public Employees Retirement Association
10.2under section 69.77.
10.3(c) For the second and each succeeding year after the administrative consolidation
10.4is effective, the financial requirements of the Virginia fire division is the total actuarial
10.5required contribution determined under section 356.215 by the approved actuary retained
10.6by the Public Employees Retirement Association in the most recent actuarial valuation
10.7prepared under section 356.215 and the standards for actuarial work adopted by the
10.8Legislative Commission on Pensions and Retirement for the Virginia fire division and the
10.9employer contribution for the Virginia fire division annually is equal to the most recently
10.10reported total actuarial required contribution, reduced by any additional amortization state
10.11aid under section 423A.02, subdivision 1b, paragraph (c), clause (3), but is not less than
10.12the amount by which the amount of the service pensions, disability pensions, and survivor
10.13benefits paid during the preceding calendar year, multiplied by the factor of 1.035,
10.14exceeds the market value of the assets of the Virginia fire division account during the
10.15preceding calendar year, multiplied by the factor of 1.035, and reduced by any additional
10.16amortization state aid under section 423A.02, subdivision 1b, paragraph (c), clause (3).
10.17The employer contributions under this paragraph must be paid as provided in section
10.18353.28 and are subject to the provisions of section 353.27, subdivisions 7, 7a, 7b, and 13.
10.19 Subd. 8. Disposition of Virginia fire division account assets after final benefit
10.20payment. On the first of the month next following the date of the death of the last eligible
10.21beneficiary of the Virginia fire division, the assets of the Virginia fire division account
10.22become assets of the city of Virginia and are either payable in a lump sum to the city of
10.23Virginia or, with any accumulated investment performance, are credits against future
10.24employer contributions of the city of Virginia to the general employees retirement plan of
10.25the Public Employees Retirement Association and the public employees police and fire
10.26retirement plan of the Public Employees Retirement Association, as the city council of
10.27the city of Virginia directs by resolution.
10.28 Sec. 11. Minnesota Statutes 2010, section 353.68, subdivision 1, is amended to read:
10.29 Subdivision 1. Application. The general provisions of this chapter apply to all
10.30police officers and firefighters who are members of the police and fire fund
10.31governmental subdivisions employing such members, and to the Virginia fire division,
10.32except where otherwise specifically provided in sections
10.33 Sec. 12. Minnesota Statutes 2010, section 356.20, subdivision 2, is amended to read:
11.1 Subd. 2. Covered public pension plans and funds. This section applies to the
11.2following public pension plans:
11.3 (1) the general state employees retirement plan of the Minnesota State Retirement
11.4System;
11.5 (2) the general employees retirement plan of the Public Employees Retirement
11.6Association, including the Minneapolis Employees Retirement Fund division;
11.7 (3) the Teachers Retirement Association;
11.8 (4) the State Patrol retirement plan;
11.9 (5) the St. Paul Teachers Retirement Fund Association;
11.10 (6) the Duluth Teachers Retirement Fund Association;
11.11 (7) the University of Minnesota faculty retirement plan;
11.12 (8) the University of Minnesota faculty supplemental retirement plan;
11.13 (9) the judges retirement fund;
11.14 (10) a police or firefighter's relief association specified or described in section
11.15subdivision 1a
11.16 (11) a volunteer firefighter relief association governed by section
11.171
11.18 (12) the public employees police and fire plan of the Public Employees Retirement
11.19Association, including the Virginia fire division;
11.20 (13) the correctional state employees retirement plan of the Minnesota State
11.21Retirement System;
11.22 (14) the local government correctional service retirement plan of the Public
11.23Employees Retirement Association; and
11.24(15) the voluntary statewide lump-sum volunteer firefighter retirement plan.
11.25 Sec. 13. Minnesota Statutes 2010, section 356.214, subdivision 1, is amended to read:
11.26 Subdivision 1. Actuary retention. (a) The governing board or managing or
11.27administrative official of each public pension plan and retirement fund or plan enumerated
11.28in paragraph (b) shall contract with an established actuarial consulting firm to conduct
11.29annual actuarial valuations and related services. The principal from the actuarial
11.30consulting firm on the contract must be an approved actuary under section
11.31subdivision 1
11.32 (b) Actuarial services must include the preparation of actuarial valuations and
11.33related actuarial work for the following retirement plans:
11.34 (1) the teachers retirement plan, Teachers Retirement Association;
11.35 (2) the general state employees retirement plan, Minnesota State Retirement System;
12.1 (3) the correctional employees retirement plan, Minnesota State Retirement System;
12.2 (4) the State Patrol retirement plan, Minnesota State Retirement System;
12.3 (5) the judges retirement plan, Minnesota State Retirement System;
12.4 (6) the general employees retirement plan, Public Employees Retirement
12.5Association, including the MERF division;
12.6 (7) the public employees police and fire plan, Public Employees Retirement
12.7Association, including the Virginia fire division;
12.8 (8) the Duluth teachers retirement plan, Duluth Teachers Retirement Fund
12.9Association;
12.10 (9) the St. Paul teachers retirement plan, St. Paul Teachers Retirement Fund
12.11Association;
12.12 (10) the legislators retirement plan, Minnesota State Retirement System;
12.13 (11) the elective state officers retirement plan, Minnesota State Retirement System;
12.14and
12.15 (12) local government correctional service retirement plan, Public Employees
12.16Retirement Association.
12.17 (c) The contracts must require completion of the annual actuarial valuation
12.18calculations on a fiscal year basis, with the contents of the actuarial valuation calculations
12.19as specified in section
12.20adopted by the Legislative Commission on Pensions and Retirement.
12.21 The contracts must require completion of annual experience data collection and
12.22processing and a quadrennial published experience study for the plans listed in paragraph
12.23(b), clauses (1), (2), and (6), as provided for in the standards for actuarial work adopted by
12.24the commission. The experience data collection, processing, and analysis must evaluate
12.25the following:
12.26 (1) individual salary progression;
12.27 (2) the rate of return on investments based on the current asset value;
12.28 (3) payroll growth;
12.29 (4) mortality;
12.30 (5) retirement age;
12.31 (6) withdrawal; and
12.32 (7) disablement.
12.33 (d) The actuary shall annually prepare a report to the governing or managing board
12.34or administrative official and the legislature, summarizing the results of the actuarial
12.35valuation calculations. The actuary shall include with the report any recommendations
12.36concerning the appropriateness of the support rates to achieve proper funding of
13.1the retirement plans by the required funding dates. The actuary shall, as part of the
13.2quadrennial experience study, include recommendations on the appropriateness of the
13.3actuarial valuation assumptions required for evaluation in the study.
13.4 (e) If the actuarial gain and loss analysis in the actuarial valuation calculations
13.5indicates a persistent pattern of sizable gains or losses, the governing or managing board
13.6or administrative official shall direct the actuary to prepare a special experience study for
13.7a plan listed in paragraph (b), clause (3), (4), (5), (7), (8), (9), (10), (11), or (12), in the
13.8manner provided for in the standards for actuarial work adopted by the commission.
13.9 Sec. 14. Minnesota Statutes 2010, section 356.215, subdivision 8, is amended to read:
13.10 Subd. 8. Interest and salary assumptions. (a) The actuarial valuation must use
13.11the applicable following preretirement interest assumption and the applicable following
13.12postretirement interest assumption:
14.1 (b) Before July 1, 2010, the actuarial valuation must use the applicable following
14.2single rate future salary increase assumption, the applicable following modified single
14.3rate future salary increase assumption, or the applicable following graded rate future
14.4salary increase assumption:
14.5 (1) single rate future salary increase assumption
14.19 (2) age-related select and ultimate future salary increase assumption or graded rate
14.20future salary increase assumption
14.32The select calculation is: during the
14.33designated select period, a designated
14.34percentage rate is multiplied by the result
14.35of the designated integer minus T, where
14.36T is the number of completed years of
14.37service, and is added to the applicable
14.38future salary increase assumption. The
14.39designated select period is five years and the
14.40designated integer is five for the general state
14.41employees retirement plan. The designated
15.1select period is ten years and the designated
15.2integer is ten for all other retirement plans
15.3covered by this clause. The designated
15.4percentage rate is: (1) 0.2 percent for the
15.5correctional state employees retirement plan,
15.6the State Patrol retirement plan, the public
15.7employees police and fire plan, and the local
15.8government correctional service plan; (2)
15.90.6 percent for the general state employees
15.10retirement plan; and (3) 0.3 percent for the
15.11teachers retirement plan, the Duluth Teachers
15.12Retirement Fund Association, and the St.
15.13Paul Teachers Retirement Fund Association.
15.14The select calculation for the Duluth Teachers
15.15Retirement Fund Association is 8.00 percent
15.16per year for service years one through seven,
15.177.25 percent per year for service years seven
15.18and eight, and 6.50 percent per year for
15.19service years eight and nine.
15.20 The ultimate future salary increase assumption is:
16.39(3) service-related ultimate future salary increase assumption
17.29 (c) Before July 2, 2010, the actuarial valuation must use the applicable following
17.30payroll growth assumption for calculating the amortization requirement for the unfunded
17.31actuarial accrued liability where the amortization retirement is calculated as a level
17.32percentage of an increasing payroll:
18.8 (d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
18.9apply, unless a different salary assumption or a different payroll increase assumption:
18.10 (1) has been proposed by the governing board of the applicable retirement plan;
18.11 (2) is accompanied by the concurring recommendation of the actuary retained under
18.12section
18.13most recent actuarial valuation report if section
18.14 (3) has been approved or deemed approved under subdivision 18.
18.15 Sec. 15. Minnesota Statutes 2010, section 356.215, subdivision 11, is amended to read:
18.16 Subd. 11. Amortization contributions. (a) In addition to the exhibit indicating
18.17the level normal cost, the actuarial valuation of the retirement plan must contain an
18.18exhibit for financial reporting purposes indicating the additional annual contribution
18.19sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
18.20for contribution determination purposes indicating the additional contribution sufficient
18.21to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
18.22subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
18.23Retirement Association and the Virginia fire division of the public employees police and
18.24fire retirement plan, the additional contribution must be calculated on a level percentage of
18.25covered payroll basis by the established date for full funding in effect when the valuation
18.26is prepared, assuming annual payroll growth at the applicable percentage rate set forth in
18.27subdivision 8, paragraph (c). For all other retirement plans, for the Virginia fire division of
18.28the public employees police and fire retirement plan, and for the MERF division of the
18.29Public Employees Retirement Association, the additional annual contribution must be
18.30calculated on a level annual dollar amount basis.
18.31 (b) For any retirement plan other than the general state employees retirement plan
18.32of the Minnesota State Retirement System or a retirement plan governed by paragraph
18.33(d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
18.34used for calculating the actuarial accrued liability of the fund, a change in the benefit
18.35plan governing annuities and benefits payable from the fund, a change in the actuarial
18.36cost method used in calculating the actuarial accrued liability of all or a portion of the
19.1fund, or a combination of the three, which change or changes by itself or by themselves
19.2without inclusion of any other items of increase or decrease produce a net increase in the
19.3unfunded actuarial accrued liability of the fund, the established date for full funding is the
19.4first actuarial valuation date occurring after June 1, 2020.
19.5 (c) For any retirement plan other than the general employees retirement plan of the
19.6Public Employees Retirement Association, if there has been a change in any or all of the
19.7actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
19.8change in the benefit plan governing annuities and benefits payable from the fund, a
19.9change in the actuarial cost method used in calculating the actuarial accrued liability of all
19.10or a portion of the fund, or a combination of the three, and the change or changes, by itself
19.11or by themselves and without inclusion of any other items of increase or decrease, produce
19.12a net increase in the unfunded actuarial accrued liability in the fund, the established date
19.13for full funding must be determined using the following procedure:
19.14 (i) the unfunded actuarial accrued liability of the fund must be determined in
19.15accordance with the plan provisions governing annuities and retirement benefits and the
19.16actuarial assumptions in effect before an applicable change;
19.17 (ii) the level annual dollar contribution or level percentage, whichever is applicable,
19.18needed to amortize the unfunded actuarial accrued liability amount determined under item
19.19(i) by the established date for full funding in effect before the change must be calculated
19.20using the interest assumption specified in subdivision 8 in effect before the change;
19.21 (iii) the unfunded actuarial accrued liability of the fund must be determined in
19.22accordance with any new plan provisions governing annuities and benefits payable from
19.23the fund and any new actuarial assumptions and the remaining plan provisions governing
19.24annuities and benefits payable from the fund and actuarial assumptions in effect before
19.25the change;
19.26 (iv) the level annual dollar contribution or level percentage, whichever is applicable,
19.27needed to amortize the difference between the unfunded actuarial accrued liability amount
19.28calculated under item (i) and the unfunded actuarial accrued liability amount calculated
19.29under item (iii) over a period of 30 years from the end of the plan year in which the
19.30applicable change is effective must be calculated using the applicable interest assumption
19.31specified in subdivision 8 in effect after any applicable change;
19.32 (v) the level annual dollar or level percentage amortization contribution under item
19.33(iv) must be added to the level annual dollar amortization contribution or level percentage
19.34calculated under item (ii);
19.35 (vi) the period in which the unfunded actuarial accrued liability amount determined
19.36in item (iii) is amortized by the total level annual dollar or level percentage amortization
20.1contribution computed under item (v) must be calculated using the interest assumption
20.2specified in subdivision 8 in effect after any applicable change, rounded to the nearest
20.3integral number of years, but not to exceed 30 years from the end of the plan year in
20.4which the determination of the established date for full funding using the procedure set
20.5forth in this clause is made and not to be less than the period of years beginning in the
20.6plan year in which the determination of the established date for full funding using the
20.7procedure set forth in this clause is made and ending by the date for full funding in effect
20.8before the change; and
20.9 (vii) the period determined under item (vi) must be added to the date as of which
20.10the actuarial valuation was prepared and the date obtained is the new established date
20.11for full funding.
20.12 (d) For the MERF division of the Public Employees Retirement Association, the
20.13established date for full funding is June 30, 2031.
20.14 (e) For the general employees retirement plan of the Public Employees Retirement
20.15Association, the established date for full funding is June 30, 2031.
20.16 (f) For the Teachers Retirement Association, the established date for full funding is
20.17June 30, 2037.
20.18 (g) For the correctional state employees retirement plan of the Minnesota State
20.19Retirement System, the established date for full funding is June 30, 2038.
20.20 (h) For the judges retirement plan, the established date for full funding is June
20.2130, 2038.
20.22 (i) For the public employees police and fire retirement plan, the established date
20.23for full funding is June 30, 2038.
20.24 (j) For the St. Paul Teachers Retirement Fund Association, the established date for
20.25full funding is June 30 of the 25th year from the valuation date. In addition to other
20.26requirements of this chapter, the annual actuarial valuation must contain an exhibit
20.27indicating the funded ratio and the deficiency or sufficiency in annual contributions when
20.28comparing liabilities to the market value of the assets of the fund as of the close of the
20.29most recent fiscal year.
20.30(k) For the general state employees retirement plan of the Minnesota State
20.31Retirement System, the established date for full funding is June 30, 2040.
20.32 (l) For the Virginia fire division of the public employees police and fire retirement
20.33plan, the established date for full funding is December 31, 2016.
20.34(m) For the retirement plans for which the annual actuarial valuation indicates
20.35an excess of valuation assets over the actuarial accrued liability, the valuation assets in
20.36excess of the actuarial accrued liability must be recognized as a reduction in the current
21.1contribution requirements by an amount equal to the amortization of the excess expressed
21.2as a level percentage of pay over a 30-year period beginning anew with each annual
21.3actuarial valuation of the plan.
21.4 Sec. 16. Minnesota Statutes 2010, section 356.401, subdivision 3, is amended to read:
21.5 Subd. 3. Covered retirement plans. The provisions of this section apply to the
21.6following retirement plans:
21.7(1) the legislators retirement plan, established by chapter 3A;
21.8(2) the general state employees retirement plan of the Minnesota State Retirement
21.9System, established by chapter 352;
21.10(3) the correctional state employees retirement plan of the Minnesota State
21.11Retirement System, established by chapter 352;
21.12(4) the State Patrol retirement plan, established by chapter 352B;
21.13(5) the elective state officers retirement plan, established by chapter 352C;
21.14(6) the unclassified state employees retirement program, established by chapter
21.15352D;
21.16(7) the general employees retirement plan of the Public Employees Retirement
21.17Association, established by chapter 353, including the MERF division of the Public
21.18Employees Retirement Association;
21.19(8) the public employees police and fire plan of the Public Employees Retirement
21.20Association, established by chapter 353, including the Virginia fire division of the public
21.21employees police and fire plan;
21.22(9) the public employees defined contribution plan, established by chapter 353D;
21.23(10) the local government correctional service retirement plan of the Public
21.24Employees Retirement Association, established by chapter 353E;
21.25(11) the voluntary statewide lump-sum volunteer firefighter retirement plan,
21.26established by chapter 353G;
21.27(12) the Teachers Retirement Association, established by chapter 354;
21.28(13) the Duluth Teachers Retirement Fund Association, established by chapter 354A;
21.29(14) the St. Paul Teachers Retirement Fund Association, established by chapter
21.30354A;
21.31(15) the individual retirement account plan, established by chapter 354B;
21.32(16) the higher education supplemental retirement plan, established by chapter 354C;
21.33(17) the Minneapolis Police Relief Association, established by chapter 423B;
21.34(18) the Minneapolis Firefighters Relief Association, established by chapter 423C;
21.35and
22.1(19) the judges retirement fund, established by chapter 490.
22.2 Sec. 17. Minnesota Statutes 2010, section 356.407, subdivision 2, is amended to read:
22.3 Subd. 2. Covered funds. The provisions of this section apply to the following
22.4retirement funds:
22.5(1) the general employees retirement plan of the Public Employees Retirement
22.6Association established under chapter 353, including the MERF division of the Public
22.7Employees Retirement Association;
22.8(2) the public employees police and fire plan of the Public Employees Retirement
22.9Association established under chapter 353, including the Virginia fire division of the
22.10public employees police and fire plan;
22.11(3) the State Patrol retirement plan established under chapter 352B;
22.12(4) the legislators retirement plan established under chapter 3A;
22.13(5) the elective state officers retirement plan established under chapter 352C; and
22.14(6) the Teachers Retirement Association established under chapter 354.
22.15 Sec. 18. Minnesota Statutes 2010, section 356.465, subdivision 3, is amended to read:
22.16 Subd. 3. Covered retirement plans. The provisions of this section apply to the
22.17following retirement plans:
22.18(1) the general state employees retirement plan of the Minnesota State Retirement
22.19System established under chapter 352;
22.20(2) the correctional state employees retirement plan of the Minnesota State
22.21Retirement System established under chapter 352;
22.22(3) the State Patrol retirement plan established under chapter 352B;
22.23(4) the legislators retirement plan established under chapter 3A;
22.24(5) the judges retirement plan established under chapter 490;
22.25(6) the general employees retirement plan of the Public Employees Retirement
22.26Association established under chapter 353, including the MERF division of the Public
22.27Employees Retirement Association;
22.28(7) the public employees police and fire plan of the Public Employees Retirement
22.29Association established under chapter 353, including the Virginia fire division of the
22.30public employees police and fire plan;
22.31(8) the teachers retirement plan established under chapter 354;
22.32(9) the Duluth Teachers Retirement Fund Association established under chapter
22.33354A;
23.1(10) the St. Paul Teachers Retirement Fund Association established under chapter
23.2354A;
23.3(11) the Minneapolis Firefighters Relief Association established under chapter 423C;
23.4(12) the Minneapolis Police Relief Association established under chapter 423B; and
23.5(13) the local government correctional service retirement plan of the Public
23.6Employees Retirement Association established under chapter 353E.
23.7 Sec. 19. Minnesota Statutes 2010, section 423A.02, subdivision 1b, is amended to read:
23.8 Subd. 1b. Additional amortization state aid. (a) Annually, on October 1, the
23.9commissioner of revenue shall allocate the additional amortization state aid transferred
23.10under section
23.11 (1) all police or salaried firefighters relief associations governed by and in full
23.12compliance with the requirements of section
23.13liability in the actuarial valuation prepared under sections
23.14preceding December 31;
23.15 (2) all local police or salaried firefighter consolidation accounts governed by chapter
23.16353A that are certified by the executive director of the public employees retirement
23.17association as having for the current fiscal year an additional municipal contribution
23.18amount under section
23.19section
23.2024, 1993, and that have implemented section
23.21of the consolidation preceded June 1, 1995; and
23.22 (3) the municipalities that are required to make an additional municipal contribution
23.23under section
23.24contribution.
23.25 (b) The commissioner shall allocate the state aid on the basis of the proportional share
23.26of the relief association or consolidation account of the total unfunded actuarial accrued
23.27liability of all recipient relief associations and consolidation accounts as of December 31,
23.281993, for relief associations, and as of June 30, 1994, for consolidation accounts.
23.29 (c) Beginning October 1, 2000, and annually thereafter, the commissioner shall
23.30allocate the state aid, including any state aid in excess of the limitation in subdivision
23.314, on the following basis:
23.32 (1) 64.5 percent to the municipalities to which section
23.338
23.34accordance with paragraph (b) and subject to the limitation in subdivision 4;
24.1 (2) 34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
24.2liability in the actuarial valuation prepared under sections
24.3preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
24.4Fire Department Relief Association; and
24.5 (3) 1.3 percent to the city of Virginia to fund any unfunded actuarial accrued liability
24.6in the actuarial valuation prepared under sections
24.7December 31 for the Virginia fire
24.8employees police and fire retirement plan.
24.9 If there is no unfunded actuarial accrued liability in both the Minneapolis Police
24.10Relief Association and the Minneapolis Fire Department Relief Association as disclosed
24.11in the most recent actuarial valuations for the relief associations prepared under sections
24.13follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
24.14Teachers Retirement Fund Association, and 30 percent as additional funding to support
24.15minimum fire state aid for volunteer firefighters relief associations. If there is no unfunded
24.16actuarial accrued liability in the Virginia Fire Department Relief Association as disclosed
24.17in the most recent actuarial valuation for the relief association prepared under sections
24.19follows: 49 percent to the Teachers Retirement Association, 21 percent to the St. Paul
24.20Teachers Retirement Fund Association, and 30 percent as additional funding to support
24.21minimum fire state aid for volunteer firefighters relief associations. Upon the final
24.22payment to municipalities required by section
24.23or
24.24percent of the aid as follows: 20 percent to the St. Paul Teachers Retirement Fund
24.25Association, 20 percent to the city of Minneapolis to fund any unfunded actuarial accrued
24.26liability in the actuarial valuation proposed under sections
24.27preceding December 31 for the Minneapolis Police Relief Association or the Minneapolis
24.28Firefighters Relief Association, 20 percent for the city of Duluth to pay for any costs
24.29associated with the police and firefighters pensions, and 40 percent as additional funding to
24.30support minimum fire state aid for volunteer firefighters relief associations. The allocation
24.31must be made by the commissioner at the same time and under the same procedures
24.32as specified in subdivision 3. With respect to the St. Paul Teachers Retirement Fund
24.33Association, annually, beginning on July 1, 2005, if the applicable teacher's association
24.34five-year average time-weighted rate of investment return does not equal or exceed the
24.35performance of a composite portfolio assumed passively managed (indexed) invested ten
24.36percent in cash equivalents, 60 percent in bonds and similar debt securities, and 30 percent
25.1in domestic stock calculated using the formula under section
25.2allocation to that retirement fund under this section ceases until the five-year annual rate
25.3of investment return equals or exceeds the performance of that composite portfolio.
25.4 (d) The amounts required under this subdivision are the amounts annually
25.5appropriated to the commissioner of revenue under section
25.6paragraph (e).
25.7 Sec. 20. TERMINATION OF VIRGINIA RELIEF ASSOCIATION
25.8SPECIAL FUND; CONTINUATION OF GENERAL FUND AS FRATERNAL
25.9ORGANIZATION.
25.10 Subdivision 1. Special fund termination. Upon the transfer of the assets of the
25.11Virginia Fire Department Relief Association special fund to the Public Employees
25.12Retirement Association and the public employees police and fire retirement fund under
25.13Minnesota Statutes, section 353.668, the special fund of the Virginia Fire Department
25.14Relief Association ceases to exist as a Minnesota public pension fund and the Virginia
25.15Fire Department Relief Association ceases to exist as a Minnesota public pension plan,
25.16succeeded by the Virginia fire division of the public employees police and fire retirement
25.17plan.
25.18 Subd. 2. General fund status. If the board of trustees of the Virginia Fire
25.19Department Relief Association so elects, the general fund of the Virginia Fire Department
25.20Relief Association may continue as the sole fund of the corporation and the relief
25.21association may continue solely as a fraternal organization. The board of trustees of the
25.22relief association functioning solely as a fraternal organization must be composed solely
25.23of former Virginia city firefighters or their survivors. The articles of incorporation and
25.24bylaw provisions of the preconsolidation Virginia Fire Department Relief Association
25.25relating to annual meetings, board of trustee functions, officer functions, and general
25.26fund operations continue to govern.
25.27 Sec. 21. EFFECTIVE DATE; LOCAL APPROVAL.
25.28Sections 1 to 20 are effective the day after the governing body of the city of Virginia
25.29and its chief clerical officer timely complete their compliance with Minnesota Statutes,
25.30section 645.021, subdivisions 2 and 3.
