1.1 A bill for an act
1.2 relating to retirement; making technical changes, clarifications, and corrections to
1.3 the statutes governing the Legislative Commission on Pensions and Retirement,
1.4 the statewide volunteer firefighter plan, IRAP to TRA transfers, fire state aid and
1.5 police and firefighter retirement supplemental state aid, and the public employees
1.6 defined contribution plan; modifying practices for expenses and reporting and
1.7 repealing certain reporting requirements for the State Board of Investment;
1.8 eliminating obsolete provisions; amending Minnesota Statutes 2024, sections 3.85,
1.9 subdivisions 2, 3, 10; 11A.07, subdivisions 4, 4b; 124E.12, subdivisions 4, 6;
1.10 181.101; 353D.01, subdivision 2; 353D.02, subdivision 4; 353G.08, subdivision
1.11 1a; 353G.11, subdivisions 2, 2a, by adding a subdivision; 353G.17, subdivisions
1.12 4, 5; 353G.19, subdivisions 1, 2, 3, 4, 5; 354B.215, subdivisions 3, 4; 356.633,
1.13 subdivisions 1, 2, by adding a subdivision; 423A.022, subdivisions 2, 3; 424A.014,
1.14 subdivision 5; 424A.08; 424B.22, subdivisions 1, 2, 3, by adding a subdivision;
1.15 477B.02, subdivisions 3, 8; 477B.03, subdivisions 5, 7; 477B.04, subdivisions 3,
1.16 4; proposing coding for new law in Minnesota Statutes, chapter 356; repealing
1.17 Minnesota Statutes 2024, sections 11A.27; 356.635, subdivision 9.
1.18BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.19 ARTICLE 1
1.20 LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT
1.21 Section 1. Minnesota Statutes 2024, section 3.85, subdivision 2, is amended to read:
1.22 Subd. 2.Powers.The commission shall make a continuing study and investigation of
1.23retirement benefit plans applicable to nonfederal government employees in this state. The
1.24powers and duties of the commission include, but are not limited to the following:
1.25 (a) studying retirement benefit plans applicable to nonfederal government employees
1.26in Minnesota, including federal plans available to the employees;
1.27 (b) making recommendations within the scope of its study, including attention to financing
1.28of the various pension funds and financing of accrued liabilities;
1Article 1 Section 1.
25-05537 as introduced04/24/25 REVISOR VH/AC
SENATE
STATE OF MINNESOTA
S.F. No. 3467NINETY-FOURTH SESSION
(SENATE AUTHORS: RASMUSSON and Frentz)
OFFICIAL STATUSD-PGDATE
Introduction and first reading04/30/2025
Referred to State and Local Government 2.1 (c) considering all aspects of pension planning and operation and making
2.2recommendations designed to establish and maintain sound pension policy for all funds;
2.3 (d) analyzing each item of proposed pension and retirement legislation, including
2.4amendments to each, with particular reference to analysis of their the legislation's cost,
2.5actuarial soundness, and adherence to sound pension policy, and reporting its findings to
2.6the legislature;
2.7 (e) creating and maintaining a library for reference concerning pension and retirement
2.8matters, including information about laws and systems in other states; and
2.9 (f) studying, analyzing, and preparing reports in regard to subjects certified to the
2.10commission for study.
2.11 Sec. 2. Minnesota Statutes 2024, section 3.85, subdivision 3, is amended to read:
2.12 Subd. 3.Membership.The commission consists of seven members of the senate
2.13appointed by the Subcommittee on Committees of the Committee on Rules and
2.14Administration and seven members of the house of representatives appointed by the speaker.
2.15No more than five members from each chamber may be from the majority caucus in that
2.16chamber. Members shall be appointed at the commencement of each regular session of the
2.17legislature for a two-year term beginning January 16 of the first year of the regular session.
2.18Members continue A member continues to serve until their successors are appointed the
2.19earlier of the appointment of the member's successor or the end of the member's legislative
2.20term or office. Vacancies that occur while the legislature is in session shall be filled like
2.21regular appointments. If the legislature is not in session, senate vacancies shall be filled by
2.22the last Subcommittee on Committees of the senate Committee on Rules and Administration
2.23or other appointing authority designated by the senate rules, and house of representatives
2.24vacancies shall be filled by the last speaker of the house, or if the speaker is not available,
2.25by the last chair of the house of representatives Rules Committee.
2.26 Sec. 3. Minnesota Statutes 2024, section 3.85, subdivision 10, is amended to read:
2.27 Subd. 10.Standards for pension valuations and cost estimates.The commission shall
2.28adopt standards prescribing specific detailed methods to calculate, evaluate, and display
2.29current and proposed law projected liabilities, costs, and actuarial equivalents of all covered
2.30public employee pension plans in Minnesota under section 356.20, subdivision 2, that are
2.31defined benefit plans. These standards shall must be consistent with chapter 356 and be
2.32updated annually periodically. At a minimum, the standards shall must contain requirements
2.33that comply with generally accepted accounting principles actuarial standards of practice
2Article 1 Sec. 3.
25-05537 as introduced04/24/25 REVISOR VH/AC 3.1applicable to government pension plans. The standards may include additional financial,
3.2funding, or valuation requirements that are not required under generally accepted accounting
3.3principles applicable to government pension plans.
3.4 Sec. 4. EFFECTIVE DATE.
3.5 Sections 1 to 3 are effective the day following final enactment.
3.6 ARTICLE 2
3.7 STATEWIDE VOLUNTEER FIREFIGHTER PLAN
3.8 Section 1. Minnesota Statutes 2024, section 353G.08, subdivision 1a, is amended to read:
3.9 Subd. 1a.Annual funding requirements; monthly division.(a) Annually, the executive
3.10director shall determine the funding requirements of each monthly benefit fire department
3.11account in the statewide volunteer firefighter monthly division of the defined benefit plan
3.12on or before August 1.
3.13 (b) The executive director must determine the funding requirements of a monthly benefit
3.14fire department account under this subdivision from:
3.15 (1) the most recent actuarial valuation normal cost, administrative expense, including
3.16the cost of a regular actuarial valuation, and amortization results for the account determined
3.17by the approved actuary retained by the retirement association under sections 356.215 and
3.18356.216; and
3.19 (2) the standards for actuarial work, utilizing a six percent investment return actuarial
3.20assumption and other actuarial assumptions approved under section 356.215, subdivision
3.2118:
3.22 (i) with that portion of any unfunded actuarial accrued liability attributable to a benefit
3.23increase to be amortized over a period of 20 years from the date of the benefit change;
3.24 (ii) with that portion of any unfunded actuarial accrued liability attributable to an
3.25assumption change or an actuarial method change to be amortized over a period of 20 years
3.26from the date of the assumption or method change;
3.27 (iii) with that portion of any unfunded actuarial accrued liability attributable to an
3.28investment loss to be amortized over a period of ten years from the date of investment loss;
3.29and
3.30 (iv) with the balance of any net unfunded actuarial accrued liability to be amortized over
3.31a period of five years from the date of the actuarial valuation.
3Article 2 Section 1.
25-05537 as introduced04/24/25 REVISOR VH/AC 4.1 (c) The required contributions of the entity or entities associated with the fire department
4.2whose active firefighters are covered by the monthly division are the annual financial
4.3requirements of the monthly benefit fire department account of the plan under paragraph
4.4(b) reduced by the amount of any fire state aid payable under chapter 477B, or any police
4.5and firefighter retirement supplemental state aid payable under section 423A.022, that is
4.6reasonably anticipated to be received by the plan attributable to the entity or entities during
4.7the following calendar year. The required contribution must be allocated between the entities
4.8if more than one entity is involved. A reasonable amount of anticipated fire state aid is an
4.9amount that does not exceed the fire state aid actually received in the prior year multiplied
4.10by the factor 1.035.
4.11 (d) The required contribution calculated in paragraph (c) must be paid to the plan on or
4.12before December 31 of the year for which it was calculated. If the contribution is not received
4.13by the plan by December 31, it is payable with interest at an annual compound rate of six
4.14percent from the date due until the date payment is received by the plan. If the entity does
4.15not pay the full amount of the required contribution, the executive director shall collect the
4.16unpaid amount under section 353.28, subdivision 6.
4.17 Sec. 2. Minnesota Statutes 2024, section 353G.11, is amended by adding a subdivision to
4.18read:
4.19 Subd. 1b.Applicable benefit level.(a) In determining a member's retirement benefit
4.20under section 353G.09, subdivision 1a, the benefit level applicable to the member is the
4.21benefit level in effect as of the date the member terminated firefighting services for the fire
4.22department of a participating employer.
4.23 (b) Except as provided under section 353G.09, subdivision 4:
4.24 (1) the benefit level for a member of the lump-sum division is the benefit level selected
4.25under section 353G.05, subdivision 1d, by the member's relief association or, if applicable,
4.26the municipality or firefighting corporation that employs the member or the benefit level
4.27as modified under subdivision 2, whichever is in effect as of the date the member terminated
4.28firefighting services; or
4.29 (2) the benefit level for a member of the monthly division is the benefit level under the
4.30retirement benefit plan document applicable to the member's former relief association or
4.31the benefit level under the retirement benefit plan document as modified under subdivision
4.322a, whichever is in effect as of the date the member terminated firefighting services.
4Article 2 Sec. 2.
25-05537 as introduced04/24/25 REVISOR VH/AC 5.1 Sec. 3. Minnesota Statutes 2024, section 353G.11, subdivision 2, is amended to read:
5.2 Subd. 2.Benefit level changes in the lump-sum division of defined benefit plan.(a)
5.3A fire department's fire chief or the governing body operating a fire department may request
5.4an increase in the benefit level as provided in this subdivision.
5.5 (b) The fire chief or governing body must request a cost estimate from the executive
5.6director of an increase in the service pension benefit level applicable to the active firefighters
5.7of the fire department.
5.8 (c) The executive director must prepare the cost estimate using a procedure certified as
5.9accurate by the approved actuary retained by the association.
5.10 (d) Within 120 days after receiving the cost estimate from the executive director, the
5.11governing body may approve the benefit level change, effective for January 1 of the following
5.12calendar year unless the governing body specifies in the approval document an effective
5.13date that is January 1 of the second year following the approval date. If the approval occurs
5.14after April 30, the required municipal contribution for the following calendar year must be
5.15recalculated and the results reported to the governing body. If not approved within 120 days
5.16of the receipt of the cost estimate, the benefit level change is considered to have been
5.17disapproved.
5.18 Sec. 4. Minnesota Statutes 2024, section 353G.11, subdivision 2a, is amended to read:
5.19 Subd. 2a.Procedure for changing Benefit level changes in the monthly division.(a)
5.20The A fire department's fire chief of a fire department or the governing body operating a
5.21fire department that has an active membership that is covered by the monthly benefit
5.22retirement division of the plan may initiate the process of modifying request an increase in
5.23the benefit level provided in the retirement benefit plan document under this section
5.24subdivision.
5.25 (b) The modification procedure is initiated when the applicable fire chief or governing
5.26body files with the executive director of the association a written summary of the desired
5.27benefit plan document modification, the proposed benefit plan document modification
5.28language, a written request for the preparation of an actuarial cost estimate for the proposed
5.29benefit plan document modification, and payment of the estimated cost of the actuarial cost
5.30estimate.
5.31 (c) Upon receipt of the modification request and related documents, the executive director
5.32shall must review the language of the proposed benefit plan document modification and, if
5.33a clarification is needed in the submitted language, shall inform the fire chief or governing
5Article 2 Sec. 4.
25-05537 as introduced04/24/25 REVISOR VH/AC 6.1body of the necessary clarification. Once After the proposed benefit plan document
6.2modification language fire chief or governing body has been clarified by the fire chief and
6.3resubmitted submitted the clarified language to the executive director, the executive director
6.4shall arrange for the approved actuary retained by the association to prepare a benefit plan
6.5document modification cost estimate under the applicable provisions of section 356.215
6.6and of the standards for actuarial work adopted by the Legislative Commission on Pensions
6.7and Retirement must prepare the cost estimate using a procedure certified as accurate by
6.8the approved actuary retained by the association. Upon completion of the benefit plan
6.9document modification cost estimate, the executive director shall must forward the estimate
6.10to the fire chief who requested it and to the chief financial officer of the municipality or
6.11entity with which the fire department is primarily associated.
6.12 (d) The fire chief, upon receipt of the cost estimate, shall circulate must distribute the
6.13cost estimate with to the active firefighters in the fire department and shall take reasonable
6.14steps to provide the cost estimate results to any affected retired members of the fire
6.15department and their beneficiaries. The chief financial officer of the municipality or entity
6.16associated with the fire department shall must present the proposed modification language
6.17and the cost estimate to the governing body of the municipality or entity for its consideration
6.18at a public hearing held for that purpose.
6.19 (e) If the governing body of the municipality or entity approves the modification language,
6.20the chief administrative officer of the municipality or entity shall must notify the executive
6.21director of the association of that approval. The benefit plan document modification is
6.22effective on the January 1 following the date of filing the approval with the association.
6.23 Sec. 5. Minnesota Statutes 2024, section 353G.17, subdivision 4, is amended to read:
6.24 Subd. 4.Transfer process.(a) Upon completion of the actions required under
6.25subdivisions 1 to 3, the plan shall transfer to the relief association as of the effective date
6.26identified in the notice under subdivision 1, the records, assets, and liabilities related to the
6.27former and current firefighters with benefits under the plan, along with any assets in excess
6.28of liabilities credited to the lump-sum account or the monthly benefit retirement account
6.29attributable to the firefighters and the municipality.
6.30 (b) The executive director:
6.31 (1) shall must transfer the assets in cash;
6.32 (2) shall must transfer any accounts receivable associated with the lump-sum account
6.33or monthly benefit retirement account;
6Article 2 Sec. 5.
25-05537 as introduced04/24/25 REVISOR VH/AC 7.1 (3) shall must settle any accounts payable from the account before the transfer; and
7.2 (4) may deduct from the assets to be transferred reasonable costs incurred by the plan
7.3to conduct the voting process and complete the transfer.
7.4 Sec. 6. Minnesota Statutes 2024, section 353G.17, subdivision 5, is amended to read:
7.5 Subd. 5.Relief association obligations and rights upon transfer from the plan.(a)
7.6Upon transfer of the assets of the lump-sum account or monthly benefit retirement fire
7.7department account, the pension liabilities attributable to the benefits for the former and
7.8current firefighters shall become the obligation of the special fund of the relief association.
7.9 (b) Upon the transfer of the assets of the lump-sum account or monthly benefit retirement
7.10fire department account, the board of trustees of the relief association has legal title to and
7.11management responsibility for the transferred assets as trustees for persons having a beneficial
7.12interest in those assets arising out of the benefit coverage provided by the account.
7.13 (c) The relief association is the successor in interest with respect to all claims against
7.14the plan relating to the transferred lump-sum account or monthly benefit retirement fire
7.15department account, except for claims alleging any act or acts by the plan or its fiduciaries
7.16that were not done in good faith or that constituted a breach of fiduciary responsibility under
7.17chapter 356A.
7.18 (d) The value of each volunteer firefighter's benefit in the plan on the day before the
7.19asset transfer shall be no less than the value of the volunteer firefighter's benefit on the day
7.20after the asset transfer. The relief association shall give credit, with respect to each firefighter
7.21whose benefit is being transferred, for all past service, including service credit with the plan
7.22and with any predecessor relief association, to the extent credit is given for such service in
7.23the records of the plan for that firefighter.
7.24 (e) Upon completion of the transfer of records, assets, and liabilities, the executive
7.25director shall provide written notice to the state auditor, the commissioner of revenue, and
7.26the secretary of state that the transfer is complete.
7.27 Sec. 7. Minnesota Statutes 2024, section 353G.19, subdivision 1, is amended to read:
7.28 Subdivision 1.Authority to initiate conversion.(a) A participating employer associated
7.29with a fire department covered by the defined benefit plan, including an entity previously
7.30affiliated with a defined benefit relief association when the entity made a request for coverage
7.31by the defined contribution plan under section 353G.05, subdivision 1b, paragraph (c), may
7.32convert to coverage by the defined contribution plan in accordance with this section.
7Article 2 Sec. 7.
25-05537 as introduced04/24/25 REVISOR VH/AC 8.1 (b) Conversion from coverage by the defined benefit plan to coverage by the defined
8.2contribution plan consists of:
8.3 (1) a resolution by the governing body of the participating employer;
8.4 (2) notice to all former and active volunteer firefighters of the fire department;
8.5 (3) full vesting on the conversion effective date of all active and former volunteer
8.6firefighters with an accrued benefit in the defined benefit plan attributable to service with
8.7the fire department, to the extent funded as of the conversion effective date; and
8.8 (4) allocation of surplus over full funding, if any, to individual accounts in the fire
8.9department's new account in the defined contribution plan.
8.10 (c) For an entity previously affiliated with a defined benefit relief association when the
8.11entity made a request for coverage by the defined contribution plan under section 353G.05,
8.12subdivision 1b, paragraph (c), a conversion must occur under paragraph (b) immediately
8.13after coverage by the retirement plan of the entity's fire department and the entity's volunteer
8.14firefighters takes effect.
8.15 Sec. 8. Minnesota Statutes 2024, section 353G.19, subdivision 2, is amended to read:
8.16 Subd. 2.Resolutions by the governing body.To initiate a conversion, the governing
8.17body of the participating employer must file with the executive director at least 30 days
8.18before the end of a calendar year:
8.19 (1) a resolution that states that the fire department elects to participate in the defined
8.20contribution plan effective on the conversion effective date, which is the first day of the
8.21next calendar year; and
8.22 (2) if, as of the valuation immediately preceding the conversion effective date, the fire
8.23department account had a deficit from full funding as defined under section 353G.08,
8.24subdivision 1, paragraph (c), or the special fund of the defined benefit relief association had
8.25a deficit from full funding as defined in section 424A.092, subdivision 3, paragraph (b), a
8.26resolution approving a contribution to the retirement plan in the amount necessary to
8.27eliminate the deficit, which is to be paid within 30 days of the filing of the resolution or in
8.28installments over three years, with the first payment to be made within 30 days of the filing
8.29of the resolution.
8Article 2 Sec. 8.
25-05537 as introduced04/24/25 REVISOR VH/AC 9.1 Sec. 9. Minnesota Statutes 2024, section 353G.19, subdivision 3, is amended to read:
9.2 Subd. 3.Notice to participants.The participating employer must provide notice to all
9.3active and former volunteer firefighters in the fire department at least 30 days before the
9.4conversion effective date. The notice must include:
9.5 (1) an explanation that the plan is converting from a defined benefit plan to a defined
9.6contribution plan, including definitions of those terms, on the conversion effective date and
9.7that the active and former volunteer firefighters will become fully vested in their accrued
9.8benefit to the extent funded as of the conversion effective date;
9.9 (2) a summary of the terms of the defined contribution plan;
9.10 (3) a section tailored to each volunteer firefighter that provides an estimate of the present
9.11value of the participant's fully vested accrued benefit and the calculation that resulted in
9.12that value;
9.13 (4) an estimate of any anticipated surplus and an explanation of the allocation of the
9.14surplus; and
9.15 (5) contact information for the chief administrative officer or chief financial officer of
9.16the participating employer and the designated staff member of the retirement plan who will
9.17answer questions and directions to a website.
9.18 Sec. 10. Minnesota Statutes 2024, section 353G.19, subdivision 4, is amended to read:
9.19 Subd. 4.Full vesting and determination of accrued benefit.(a) On the conversion
9.20effective date, each active or former volunteer firefighter with a retirement benefit under
9.21the defined benefit plan, except any retiree in pay status who is receiving a monthly benefit,
9.22becomes 100 percent vested or, if the defined benefit plan does not have sufficient assets
9.23to fund 100 percent vesting, as close to 100 percent vested as the funding permits, as of the
9.24conversion effective date in the firefighter's retirement benefit, without regard to the number
9.25of years of vesting service credit.
9.26 (b) The executive director must determine the present value of each active or former
9.27firefighter's accrued benefit as of the conversion effective date, taking into account the full
9.28vesting requirement under paragraph (a).
9.29 Sec. 11. Minnesota Statutes 2024, section 353G.19, subdivision 5, is amended to read:
9.30 Subd. 5.Surplus over full funding.If the fire department account has a surplus over
9.31full funding, as defined under section 353G.08, subdivision 1, paragraph (c), the executive
9Article 2 Sec. 11.
25-05537 as introduced04/24/25 REVISOR VH/AC 10.1director must allocate the surplus over full funding to the individual account of each active
10.2and former volunteer firefighter, except any former volunteer firefighter receiving an annuity,
10.3in the same proportion that the volunteer firefighter's accrued benefit bears to the total
10.4accrued benefits of all active and former volunteer firefighters.
10.5 Sec. 12. EFFECTIVE DATE.
10.6 Sections 1 to 11 are effective the day following final enactment.
10.7 ARTICLE 3
10.8 IRAP TO TRA TRANSFERS
10.9 Section 1. Minnesota Statutes 2024, section 354B.215, subdivision 3, is amended to read:
10.10 Subd. 3.Eligible person.(a) An eligible person is a person who:
10.11 (1) is employed by Minnesota State;
10.12 (2) has an account in the individual retirement account plan; and
10.13 (3) satisfies was previously eligible to elect coverage by the Teachers Retirement
10.14Association under one or more sections of chapter 354B or any prior version of chapter
10.15354B; and
10.16 (4) is not disqualified because Minnesota State produces one or more of the items listed
10.17in paragraph (b).
10.18 (b) A person satisfies this paragraph is not an eligible person if Minnesota State is not
10.19able to produce produces at least one of the following items by the end of the 60-day 75-day
10.20period under subdivision 4, paragraph (b):
10.21 (1) a record indicating that the person received notice regarding the person's eligibility
10.22to elect prospective coverage by the Teachers Retirement Association within the election
10.23period under section 354B.211, subdivision 4 or 6, or its predecessor during the person's
10.24first year of eligibility to participate in the individual retirement account plan;
10.25 (2) a record indicating that the person received notice regarding the person's eligibility
10.26to elect coverage by the Teachers Retirement Association during the person's first year after
10.27attaining tenure or comparable permanent status;
10.28 (2) (3) a record that the person elected retirement coverage by the individual retirement
10.29account plan; or
10Article 3 Section 1.
25-05537 as introduced04/24/25 REVISOR VH/AC 11.1 (3) (4) other credible documentation demonstrating that the person was aware of the
11.2person's right to elect retirement coverage by the Teachers Retirement Association.
11.3 (c) The record described in paragraph (b), clause (1), is not effective to disqualify a
11.4person if the person was eligible to elect coverage by the Teachers Retirement Association
11.5during the person's first year after attaining tenure or comparable permanent status.
11.6 EFFECTIVE DATE.This section is effective retroactively from January 1, 2025.
11.7 Sec. 2. Minnesota Statutes 2024, section 354B.215, subdivision 4, is amended to read:
11.8 Subd. 4.Eligible person application; information required from Minnesota State.(a)
11.9To elect coverage by the Teachers Retirement Association, an eligible person must submit
11.10a written application to the chancellor on a form provided by Minnesota State. The application
11.11must include:
11.12 (1) an attestation that the person was not informed of the right to elect a transfer from
11.13the individual retirement account plan to the Teachers Retirement Association and the person
11.14was unaware of the right to elect such a transfer;
11.15 (2) the date on which the person first became a participant in the individual retirement
11.16account plan;
11.17 (3) a signed release authorizing Minnesota State to provide employment and other
11.18personnel information to the Teachers Retirement Association; and
11.19 (4) any other information that Minnesota State may require.
11.20 (b) No later than 60 75 days after receipt of the application under paragraph (a), Minnesota
11.21State must verify the information provided by the person in the application, determine
11.22whether the person is an eligible person under subdivision 3, and provide a written response
11.23to the person regarding the determination of eligibility. If Minnesota State determines that
11.24the person is not an eligible person, Minnesota State must specify the reason or reasons for
11.25its determination and, if applicable, include a copy of any documentation identified in
11.26subdivision 3, paragraph (b), in its written response to the person.
11.27 (c) If Minnesota State determines that the person is an eligible person under subdivision
11.283, Minnesota State must forward to the executive director:
11.29 (1) the application;
11.30 (2) confirmation or modification of the information provided by the eligible person in
11.31the application;
11Article 3 Sec. 2.
25-05537 as introduced04/24/25 REVISOR VH/AC 12.1 (3) salary history for the eligible person;
12.2 (4) an estimate of the amount available for transfer from the eligible person's account
12.3in the individual retirement account plan to the Teachers Retirement Association; and
12.4 (5) any other relevant information.
12.5 EFFECTIVE DATE.This section is effective retroactively from January 1, 2025.
12.6 ARTICLE 4
12.7 FIRE AND POLICE STATE AID
12.8 Section 1. Minnesota Statutes 2024, section 423A.022, subdivision 2, is amended to read:
12.9 Subd. 2.Allocation.(a) Of the total amount appropriated as supplemental state aid:
12.10 (1) 58.064 percent must be paid to the executive director of the Public Employees
12.11Retirement Association for deposit in the public employees police and fire retirement fund
12.12established by section 353.65, subdivision 1;
12.13 (2) 35.484 percent must be paid to municipalities other than municipalities solely
12.14employing firefighters with retirement coverage provided by the public employees police
12.15and fire retirement plan which defined in paragraph (b) that qualified to receive fire state
12.16aid in that calendar year, allocated in the same proportion to that the most recent amount
12.17of fire state aid paid under section 477B.04, for the municipality bears to the most recent
12.18total fire state aid paid for all municipalities other than the municipalities solely employing
12.19firefighters with retirement coverage provided by a pension plan administered by the Public
12.20Employees police and fire Retirement plan paid under section 477B.04 Association, with
12.21the allocated amount for fire departments participating in the statewide lump-sum volunteer
12.22firefighter plan paid to the executive director of the Public Employees Retirement Association
12.23for deposit in the fund established by section 353G.02, subdivision 3, and credited to the
12.24respective account and with the balance paid to the treasurer of each municipality for
12.25transmittal within 30 days of receipt to the treasurer of the applicable firefighters relief
12.26association for deposit in its special fund other than the statewide volunteer firefighter plan;
12.27and
12.28 (3) 6.452 percent must be paid to the executive director of the Minnesota State Retirement
12.29System for deposit in the state patrol retirement fund.
12.30 (b) The allocated amount under paragraph (a), clause (2), must be paid: (i) to the executive
12.31director of the Public Employees Retirement Association for each fire department
12.32participating in the statewide volunteer firefighter plan for deposit in the fund established
12Article 4 Section 1.
25-05537 as introduced04/24/25 REVISOR VH/AC 13.1by section 352G.02, subdivision 3, and credited to the fire department's account; and (ii)
13.2with the balance to the treasurer of each municipality for transmittal within 30 days of
13.3receipt to the treasurer of the applicable firefighters relief association for deposit in its
13.4special fund.
13.5 (b) (c) For purposes of this section, the term "municipalities" includes independent
13.6nonprofit firefighting corporations that participate in the statewide lump-sum volunteer
13.7firefighter plan under chapter 353G or with subsidiary volunteer firefighter relief associations
13.8operating under chapter 424A.
13.9 Sec. 2. Minnesota Statutes 2024, section 423A.022, subdivision 3, is amended to read:
13.10 Subd. 3.Reporting.On or before September 1, annually, the executive director of the
13.11Public Employees Retirement Association shall report to the commissioner of revenue the
13.12following:
13.13 (1) the municipalities which that employ firefighters with retirement coverage by the
13.14public employees police and fire retirement plan;
13.15 (2) the municipalities that employ firefighters with retirement coverage by the general
13.16employees retirement plan;
13.17 (2) (3) the fire departments covered by the statewide lump-sum volunteer firefighter
13.18plan; and
13.19 (3) (4) any other information requested by the commissioner to administer the police
13.20and firefighter retirement supplemental state aid program.
13.21Sec. 3. Minnesota Statutes 2024, section 424A.014, subdivision 5, is amended to read:
13.22 Subd. 5.Report by certain municipalities; exceptions.(a) The chief administrative
13.23officer of each municipality that has a fire department but does not have a relief association
13.24governed by sections 424A.091 to 424A.095 or Laws 2014, chapter 275, article 2, section
13.2523, and that is not exempted under paragraph (b) or (c) must annually prepare a detailed
13.26financial report of the receipts and disbursements by the municipality for fire protection
13.27service during the preceding calendar year on a form prescribed by the state auditor. The
13.28financial report must contain any information that the state auditor deems necessary to
13.29disclose the sources of receipts and the purpose of disbursements for fire protection service.
13.30The financial report must be signed by the municipal clerk or clerk-treasurer with the state
13.31auditor on or before July 1 annually. The municipality does not qualify initially to receive,
13.32and is not entitled subsequently to retain, any fire state aid and police and firefighter
13Article 4 Sec. 3.
25-05537 as introduced04/24/25 REVISOR VH/AC 14.1retirement supplemental state aid payable under chapter 477B and section 423A.022 if the
14.2financial reporting requirement or the applicable requirements of any other statute or special
14.3law have not been complied with or are not fulfilled.
14.4 (b) Each municipality that has a fire department and provides retirement coverage to its
14.5firefighters through the statewide volunteer firefighter plan under chapter 353G qualifies
14.6to have fire state aid transmitted to and retained in the statewide volunteer firefighter
14.7retirement fund without filing a detailed financial report if the executive director of the
14.8Public Employees Retirement Association certifies compliance by the municipality with
14.9the requirements of sections 353G.04 and 353G.08, subdivision 1, paragraph (e), and certifies
14.10compliance by the applicable fire chief with the requirements of section 353G.07.
14.11 (c) Each municipality qualifies to receive fire state aid under chapter 477B without filing
14.12a financial report under paragraph (a) if the municipality:
14.13 (1) has a fire department;
14.14 (2) does not have a firefighters relief association directly associated with its fire
14.15department;
14.16 (3) does not participate in the statewide volunteer firefighter retirement plan under
14.17chapter 353G;
14.18 (4) provides retirement coverage to its firefighters through the general employees
14.19retirement plan under chapter 353 or the public employees police and fire retirement plan
14.20under sections 353.63 to 353.68; and
14.21 (5) is certified by the executive director of the Public Employees Retirement Association
14.22to the state auditor to have had an employer contribution under section 353.27, subdivisions
14.233 and 3a, or 353.65, subdivision 3, for its firefighters for the immediately prior calendar
14.24year equal to or greater than its fire state aid for the immediately prior calendar year.
14.25Sec. 4. Minnesota Statutes 2024, section 424A.08, is amended to read:
14.26 424A.08 MUNICIPALITY WITHOUT RELIEF ASSOCIATION; AUTHORIZED
14.27DISBURSEMENTS.
14.28 (a) Any A municipality which that is entitled to receive fire state aid but which has no
14.29must deposit the fire state aid in a special account established for that purpose in the
14.30municipal treasury and disburse the fire state aid in accordance with paragraph (b) or (c),
14.31as applicable, if the municipality's fire department is not directly associated with a firefighters
14Article 4 Sec. 4.
25-05537 as introduced04/24/25 REVISOR VH/AC 15.1relief association directly associated with its fire department and which is not a participating
15.2employer in the statewide volunteer firefighter plan under chapter 353G.
15.3 (b) If the municipality has no full-time firefighters with retirement coverage by the public
15.4employees police and fire retirement plan shall deposit the fire state aid in a special account
15.5established for that purpose in the municipal treasury. Disbursement and no part-time
15.6firefighters with retirement coverage by the general employees retirement plan under chapter
15.7353, the municipality must not disburse fire state aid from the special account may not be
15.8made for any purpose except:
15.9 (1) payment of the fees, dues and assessments to the Minnesota State Fire Department
15.10Association and to the state Volunteer Firefighters Benefit Association in order to entitle
15.11its firefighters to membership in and the benefits of these state associations;
15.12 (2) payment of the cost of purchasing and maintaining needed equipment for the fire
15.13department; and
15.14 (3) payment of the cost of construction, acquisition, repair, or maintenance of buildings
15.15or other premises to house the equipment of the fire department.
15.16 (b) A (c) If the municipality which is entitled to receive fire state aid, which has no
15.17firefighters relief association directly associated with its fire department, which does not
15.18participate in the statewide volunteer firefighter plan under chapter 353G, and which has
15.19full-time firefighters with retirement coverage by the public employees police and fire
15.20retirement plan or part-time firefighters with retirement coverage by the general employees
15.21retirement plan or both full-time and part-time firefighters with the applicable retirement
15.22coverage, the municipality may disburse the fire state aid as:
15.23 (1) as provided in paragraph (a), (b);
15.24 (2) for the payment of the employer contribution requirement with respect to contributions
15.25under section 353.65, subdivision 3, for any firefighters covered by the public employees
15.26police and fire retirement plan under section 353.65, subdivision 3,;
15.27 (3) for the payment of employer contributions for any firefighters covered by the general
15.28employees retirement plan under section 353.27, subdivisions 3 and 3a; or
15.29 (4) for a combination of the two types of disbursements payments authorized under
15.30clauses (1) to (3).
15.31 (c) (d) A municipality that has no firefighters relief association directly associated with
15.32it and that participates in the statewide volunteer firefighter plan under chapter 353G shall
15.33transmit any fire state aid that it receives to the statewide volunteer firefighter fund.
15Article 4 Sec. 4.
25-05537 as introduced04/24/25 REVISOR VH/AC 16.1 Sec. 5. Minnesota Statutes 2024, section 477B.02, subdivision 3, is amended to read:
16.2 Subd. 3. Benefits requirements.(a) The fire department must:
16.3 (1) be associated with a firefighters relief association that provides retirement benefits;
16.4 (2) participate in and have firefighters receiving credit for service toward a retirement
16.5benefit under the statewide volunteer firefighter plan;
16.6 (3) have retirement coverage under the public employees police and fire retirement plan
16.7or the Public Employees Retirement Association general employees retirement plan for the
16.8fire department's full-time firefighters, as defined in section 299N.03, subdivision 5, or the
16.9fire department's part-time firefighters, or the fire department's both full-time firefighters
16.10and part-time firefighters; or
16.11 (4) satisfy either clauses (1) and (3) or clauses (2) and (3).
16.12 (b) For purposes of retirement benefits, a fire department may be associated with only
16.13one firefighters relief association or one account in the statewide firefighters retirement plan
16.14at one time.
16.15 (c) Notwithstanding paragraph (a), a municipality without a relief association as described
16.16under section 424A.08, paragraph (a), may still qualify to receive fire state aid if all other
16.17requirements of this section are met.
16.18Sec. 6. Minnesota Statutes 2024, section 477B.02, subdivision 8, is amended to read:
16.19 Subd. 8.PERA certification to commissioner.(a) On or before February 1 each year,
16.20the executive director of the Public Employees Retirement Association must certify to the
16.21commissioner the fire departments that transferred retirement coverage to, or terminated
16.22participation in, the voluntary statewide volunteer firefighter retirement plan since the
16.23previous certification under this paragraph. This certification must include the number of
16.24active volunteer firefighters under section 477B.03, subdivision 5, paragraph (e).
16.25 (b) On or before February 1 each year, the executive director of the Public Employees
16.26Retirement Association must certify to the commissioner:
16.27 (1) the fire departments that participate in the statewide volunteer firefighter plan and
16.28have no firefighters receiving credit for service toward a retirement benefit under the
16.29statewide volunteer firefighter plan; and
16.30 (2) the fire departments that employ part-time firefighters who are covered by the general
16.31employees retirement plan.
16Article 4 Sec. 6.
25-05537 as introduced04/24/25 REVISOR VH/AC 17.1 Sec. 7. Minnesota Statutes 2024, section 477B.03, subdivision 5, is amended to read:
17.2 Subd. 5.Minimum fire state aid allocation amount.(a) The minimum fire state aid
17.3allocation amount is the amount derived from any additional funding amount to support a
17.4minimum fire state aid amount under section 423A.02, subdivision 3. The minimum fire
17.5state aid allocation amount is allocated to municipalities or independent nonprofit firefighting
17.6corporations with volunteer firefighters' relief associations or covered by the statewide
17.7volunteer firefighter plan. The amount is based on the number of active volunteer firefighters
17.8who are (1) members of the relief association as reported to the Office of the State Auditor
17.9in a specific annual financial reporting year as specified in paragraphs (b) to (d), or (2)
17.10covered by the statewide volunteer firefighter plan as specified in paragraph (e).
17.11 (b) For relief associations established in calendar year 1993 or a prior year, the number
17.12of active volunteer firefighters equals the number of active volunteer firefighters who were
17.13members of the relief association as reported in the annual financial reporting for calendar
17.14year 1993, but not to exceed 30 active volunteer firefighters.
17.15 (c) For relief associations established in calendar year 1994 through calendar year 1999,
17.16the number of active volunteer firefighters equals the number of active volunteer firefighters
17.17who were members of the relief association as reported in the annual financial reporting for
17.18calendar year 1998 to the Office of the State Auditor, but not to exceed 30 active volunteer
17.19firefighters.
17.20 (d) For relief associations established after calendar year 1999, the number of active
17.21volunteer firefighters equals the number of active volunteer firefighters who are members
17.22of the relief association as reported in the first annual financial reporting submitted to the
17.23Office of the State Auditor, but not to exceed 20 active volunteer firefighters.
17.24 (e) For a municipality or independent nonprofit firefighting corporation that is providing
17.25retirement coverage for volunteer firefighters by the statewide volunteer firefighter plan
17.26under chapter 353G, the number of active volunteer firefighters equals the number of active
17.27volunteer firefighters of the municipality or independent nonprofit firefighting corporation
17.28covered by the statewide plan as certified by the executive director of the Public Employees
17.29Retirement Association to the commissioner and the state auditor within 30 days of the date
17.30the municipality or independent nonprofit firefighting corporation begins coverage in the
17.31plan, but not to exceed 30 active firefighters.
17Article 4 Sec. 7.
25-05537 as introduced04/24/25 REVISOR VH/AC 18.1 Sec. 8. Minnesota Statutes 2024, section 477B.03, subdivision 7, is amended to read:
18.2 Subd. 7.Appeal.A municipality, an independent nonprofit firefighting corporation, a
18.3fire firefighter relief association, or the statewide volunteer firefighter plan may object to
18.4the amount of fire state aid apportioned to it by filing a written request with the commissioner
18.5to review and adjust the apportionment of funds within the state. The objection of a
18.6municipality, an independent nonprofit firefighting corporation, a fire firefighter relief
18.7association, or the voluntary statewide volunteer firefighter retirement plan must be filed
18.8with the commissioner within 60 days of the date the amount of apportioned fire state aid
18.9is paid. The decision of the commissioner is subject to appeal, review, and adjustment by
18.10the district court in the county in which the applicable municipality or independent nonprofit
18.11firefighting corporation is located or by the Ramsey County District Court with respect to
18.12the statewide volunteer firefighter plan.
18.13Sec. 9. Minnesota Statutes 2024, section 477B.04, subdivision 3, is amended to read:
18.14 Subd. 3.Deposit of state aid.(a) This paragraph applies if the municipality or the
18.15independent nonprofit firefighting corporation is has firefighters covered by the statewide
18.16volunteer firefighter plan. If this paragraph applies and the executive director of the Public
18.17Employees Retirement Association has not approved an aid allocation plan under section
18.18477B.041, the executive director must credit the fire state aid against future municipal
18.19contribution requirements under section 353G.08 and must notify the municipality or the
18.20independent nonprofit firefighting corporation of the fire state aid so credited at least
18.21annually. If this paragraph applies and the executive director has approved an aid allocation
18.22plan under section 477B.041, the executive director must allocate fire state aid in the manner
18.23described under section 477B.041.
18.24 (b) If (1) the municipality or the independent nonprofit firefighting corporation is does
18.25not have firefighters covered by the statewide volunteer firefighter plan and is affiliated
18.26with a duly incorporated firefighters relief association, (2) the relief association has filed a
18.27financial report with the municipality pursuant to section 424A.014, subdivision 1 or 2,
18.28whichever applies, and (3) there is not an aid allocation agreement under section 477B.042
18.29in effect, then the treasurer of the municipality must, within 30 days after receipt, transmit
18.30the fire state aid to the treasurer of the relief association. If clauses (1) and (2) are satisfied
18.31and there is an aid allocation agreement under section 477B.042 in effect, then fire state aid
18.32must be transmitted as described in that section. If the relief association has not filed a
18.33financial report with the municipality, then, regardless of whether an aid allocation agreement
18Article 4 Sec. 9.
25-05537 as introduced04/24/25 REVISOR VH/AC 19.1is in effect, the treasurer of the municipality must delay transmission of the fire state aid to
19.2the relief association until the complete financial report is filed.
19.3 (c) The treasurer of the municipality must deposit the fire state aid money in the municipal
19.4treasury if (1) the municipality or independent nonprofit firefighting corporation is does not
19.5have firefighters covered by the statewide volunteer firefighter plan, (2) there is no relief
19.6association organized, (3) the association has dissolved, or (4) the association has been
19.7removed as trustees of state aid. The money may be disbursed from the municipal treasury
19.8only for the purposes and in the manner set forth in section 424A.08 or for the payment of
19.9the employer contribution requirement with respect to firefighters covered by the public
19.10employees police and fire retirement plan under section 353.65, subdivision 3.
19.11Sec. 10. Minnesota Statutes 2024, section 477B.04, subdivision 4, is amended to read:
19.12 Subd. 4.Aid amount corrections.(a) An The commissioner must make any adjustment
19.13needed to correct a fire state aid overpayment or underpayment due to a clerical error must
19.14be made to subsequent fire state aid payments as provided in paragraphs (b) and (c). The
19.15commissioner's authority to correct an aid payment under this subdivision is limited to three
19.16years after the payment was issued.
19.17 (b) If an overpayment equals more than ten percent of the most recently paid aid amount,
19.18the commissioner must reduce the aid a municipality or independent nonprofit firefighting
19.19corporation is to receive by the amount overpaid over a period of no more than three years.
19.20If an overpayment equals or is less than ten percent of the most recently paid aid amount,
19.21the commissioner must reduce the next aid payment occurring in 30 days or more by the
19.22amount overpaid.
19.23 (c) In the event of an underpayment, the commissioner must distribute the amount of
19.24underpaid funds to the municipality or independent nonprofit firefighting corporation over
19.25a period of no more than three years. An additional distribution to a municipality or
19.26independent nonprofit firefighting corporation must be paid from the general fund and must
19.27not diminish the payments made to other municipalities or independent nonprofit firefighting
19.28corporations under this chapter.
19.29Sec. 11. EFFECTIVE DATE.
19.30 Sections 1 to 10 are effective beginning with aids payable in 2026.
19Article 4 Sec. 11.
25-05537 as introduced04/24/25 REVISOR VH/AC 20.1 ARTICLE 5
20.2 STATE BOARD OF INVESTMENT
20.3 Section 1. Minnesota Statutes 2024, section 11A.07, subdivision 4, is amended to read:
20.4 Subd. 4.Duties and powers.The director, at the direction of the state board, shall:
20.5 (1) plan, direct, coordinate, and execute administrative and investment functions in
20.6conformity with the policies and directives of the state board and the requirements of this
20.7chapter and of chapter 356A;
20.8 (2) prepare and submit biennial and annual budgets to the board and with the approval
20.9of the board submit the budgets to the Department of Management and Budget;
20.10 (3) employ professional and clerical staff as necessary;
20.11 (4) report to the state board on all operations under the director's control and supervision;
20.12 (5) maintain accurate and complete records of securities transactions and official
20.13activities;
20.14 (6) establish a policy, which is subject to state board approval, relating to the purchase
20.15and sale of securities on the basis of competitive offerings or bids;
20.16 (7) cause securities acquired to be kept in the custody of the commissioner of management
20.17and budget or other depositories consistent with chapter 356A, as the state board deems
20.18appropriate;
20.19 (8) prepare and file with the director of the Legislative Reference Library, by December
20.2031 of each year, a report summarizing the activities of the state board, the council, and the
20.21director during the preceding fiscal year;
20.22 (9) include on the state board's website its annual report and an executive summary of
20.23its quarterly reports;
20.24 (10) require state officials from any department or agency to produce and provide access
20.25to any financial documents the state board deems necessary in the conduct of its investment
20.26activities;
20.27 (11) receive and expend legislative appropriations; and
20.28 (12) undertake any other activities necessary to implement the duties and powers set
20.29forth in this subdivision consistent with chapter 356A.
20Article 5 Section 1.
25-05537 as introduced04/24/25 REVISOR VH/AC 21.1 Sec. 2. Minnesota Statutes 2024, section 11A.07, subdivision 4b, is amended to read:
21.2 Subd. 4b.Annual report.The report required under subdivision 4, clause (8), must
21.3include an executive summary, must be prepared and filed after the completion of the
21.4applicable fiscal year audit but no later than March 31 of each year, and must be prepared
21.5so as to provide the legislature and the people of the state with:
21.6 (1) a clear, comprehensive summary of the portfolio composition, the transactions, the
21.7total annual rate of return, and the yield to the state treasury and to each of the funds with
21.8assets invested by the state board; and
21.9 (2) the recipients of business placed or commissions allocated among the various
21.10commercial banks, investment bankers, money managers, and brokerage organizations and
21.11the amount of these commissions or other fees.
21.12Sec. 3. REPEALER.
21.13 Minnesota Statutes 2024, section 11A.27, is repealed.
21.14Sec. 4. EFFECTIVE DATE.
21.15 Sections 1 to 3 are effective the day following final enactment.
21.16 ARTICLE 6
21.17 PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN
21.18Section 1. Minnesota Statutes 2024, section 353D.01, subdivision 2, is amended to read:
21.19 Subd. 2.Eligibility.(a) Eligibility to participate in the plan is available to:
21.20 (1) any elected or appointed local government official of a governmental subdivision
21.21who elects to participate in the plan under section 353D.02, subdivision 1, and who, for the
21.22service rendered to a governmental subdivision, is not a member of the association within
21.23the meaning of section 353.01, subdivision 7;
21.24 (2) physicians who, if they did not elect to participate in the plan under section 353D.02,
21.25subdivision 2, would meet the definition of member under section 353.01, subdivision 7;
21.26 (3) basic and advanced life-support emergency medical service personnel who are
21.27employed by any public ambulance service that elects to participate under section 353D.02,
21.28subdivision 3;
21.29 (4) members of a municipal rescue squad associated with the city of Litchfield in Meeker
21.30County, or of a county rescue squad associated with Kandiyohi County, if an independent
21Article 6 Section 1.
25-05537 as introduced04/24/25 REVISOR VH/AC 22.1nonprofit rescue squad corporation, incorporated under chapter 317A, performing emergency
22.2management services, and if not affiliated with a fire department or ambulance service and
22.3if its members are not eligible for membership in that fire department's or ambulance service's
22.4relief association or comparable pension plan;
22.5 (5) members of the municipal rescue squad associated with the city of Eden Valley in
22.6Stearns and Meeker Counties who are not eligible for membership in the police and fire
22.7retirement plan or a firefighter relief association affiliated with the city and who elect to
22.8participate in the plan under section 353D.02, subdivision 4, paragraph (b);
22.9 (5) (6) employees of the Port Authority of the city of St. Paul who elect to participate
22.10in the plan under section 353D.02, subdivision 5, and who are not members of the association
22.11under section 353.01, subdivision 7;
22.12 (6) (7) city managers who elected to be excluded from the general employees retirement
22.13plan of the association under section 353.028 and who elected to participate in the public
22.14employees defined contribution plan under section 353.028, subdivision 3, paragraph (b);
22.15 (7) (8) volunteer or emergency on-call firefighters serving in a municipal fire department
22.16or an independent nonprofit firefighting corporation who are not covered by the police and
22.17fire retirement plan and who are not covered by a firefighters relief association and who
22.18elect to participate in the public employees defined contribution plan;
22.19 (8) (9) any elected county sheriff who is a former member of the police and fire plan,
22.20is receiving a retirement annuity as provided under section 353.651, who and does not have
22.21previous employment with the county for which the sheriff was elected; and
22.22 (9) (10) persons appointed to serve on a board or commission of a governmental
22.23subdivision or an instrumentality thereof.
22.24 (b) Individuals otherwise eligible to participate in the plan under this subdivision who
22.25are currently covered by a public or private pension plan because of their employment or
22.26provision of services are not eligible to participate in the public employees defined
22.27contribution plan.
22.28 (c) A former participant is a person who has terminated eligible employment or service
22.29and has not withdrawn the value of the person's individual account.
22.30Sec. 2. Minnesota Statutes 2024, section 353D.02, subdivision 4, is amended to read:
22.31 Subd. 4.Eligible rescue squad personnel members.(a) The municipality or county,
22.32as applicable, associated with a rescue squad under section 353D.01, subdivision 2, paragraph
22Article 6 Sec. 2.
25-05537 as introduced04/24/25 REVISOR VH/AC 23.1(a), clause (4), may elect to participate in the plan. If the municipality or county, as applicable,
23.2elects to participate, the eligible personnel may elect to participate or decline to participate.
23.3An eligible individual's election must be made within 30 days of the service's election to
23.4participate or within 30 days of the date on which the individual first began employment
23.5with the rescue squad, whichever is later. Elections under this subdivision by a government
23.6unit or individual are irrevocable. The municipality or county, as applicable, must specify
23.7by resolution eligibility requirements for rescue squad personnel which must be satisfied if
23.8the individual is to be authorized to make the election under this subdivision.
23.9 (b) An eligible member under section 353D.01, subdivision 2, paragraph (a), clause (5),
23.10may elect to participate or decline to participate in the plan within 30 days of the date on
23.11which the member first begins service with the rescue squad.
23.12 (c) Elections under this subdivision by a government unit or individual are irrevocable.
23.13Sec. 3. EFFECTIVE DATE.
23.14 Sections 1 and 2 are effective the day following final enactment.
23.15 ARTICLE 7
23.16 MISCELLANEOUS TECHNICAL CORRECTIONS
23.17Section 1. Minnesota Statutes 2024, section 124E.12, subdivision 4, is amended to read:
23.18 Subd. 4.Teacher and other employee retirement.(a) Teachers in a charter school
23.19must be public school teachers for the purposes of chapters 354 and 354A governing the
23.20Teacher Retirement Act.
23.21 (b) Except for teachers under paragraph (a), employees in a charter school must be public
23.22employees for the purposes of chapter 353 governing the Public Employees Retirement
23.23Act.
23.24Sec. 2. Minnesota Statutes 2024, section 124E.12, subdivision 6, is amended to read:
23.25 Subd. 6.Leave to teach in a charter school.If a teacher employed by a district makes
23.26a written request for an extended leave of absence to teach at a charter school, the district
23.27must grant the leave. The district must grant a leave not to exceed a total of five years. Any
23.28request to extend the leave shall be granted only at the discretion of the school board. The
23.29district may require a teacher to make the request for a leave or extension of leave before
23.30February 1 in the school year preceding the school year in which the teacher intends to
23.31leave, or February 1 of the calendar year in which the teacher's leave is scheduled to
23Article 7 Sec. 2.
25-05537 as introduced04/24/25 REVISOR VH/AC 24.1terminate. Except as otherwise provided in this subdivision and section 122A.46, subdivision
24.27, governing employment in another district, the leave is governed by section 122A.46,
24.3including, but not limited to, reinstatement, notice of intention to return, seniority, salary,
24.4and insurance.
24.5 During a leave, the teacher may continue to aggregate benefits and credits earn service
24.6and salary credit toward a pension in the Teachers' Retirement Association account or the
24.7St. Paul Teachers Retirement Fund Association under chapters 354 and 354A, respectively,
24.8consistent with subdivision 4.
24.9 Sec. 3. Minnesota Statutes 2024, section 181.101, is amended to read:
24.10 181.101 WAGES; HOW OFTEN PAID.
24.11 (a) Except as provided in paragraph (b), every employer must pay all wages, including
24.12salary, earnings, and gratuities earned by an employee at least once every 31 days and all
24.13commissions earned by an employee at least once every three months, on a regular payday
24.14designated in advance by the employer regardless of whether the employee requests payment
24.15at longer intervals. Unless paid earlier, the wages earned during the first half of the first
24.1631-day pay period become due on the first regular payday following the first day of work.
24.17If wages or commissions earned are not paid, the commissioner of labor and industry or the
24.18commissioner's representative may serve a demand for payment on behalf of an employee.
24.19In addition to other remedies under section 177.27, if payment of wages is not made within
24.20ten days of service of the demand, the commissioner may charge and collect the wages
24.21earned at the employee's rate or rates of pay or at the rate or rates required by law, including
24.22any applicable statute, regulation, rule, ordinance, government resolution or policy, contract,
24.23or other legal authority, whichever rate of pay is greater, and a penalty in the amount of the
24.24employee's average daily earnings at the same rate or rates for each day beyond the ten-day
24.25limit following the demand. If payment of commissions is not made within ten days of
24.26service of the demand, the commissioner may charge and collect the commissions earned
24.27and a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the
24.28ten-day limit. Money collected by the commissioner must be paid to the employee concerned.
24.29This section does not prevent an employee from prosecuting a claim for wages. This section
24.30does not prevent a school district, other public school entity, or other school, as defined
24.31under section 120A.22, from paying any wages earned by its employees during a school
24.32year on regular paydays in the manner provided by an applicable contract or collective
24.33bargaining agreement, or a personnel policy adopted by the governing board. For purposes
24.34of this section, "employee" includes a person who performs agricultural labor as defined in
24Article 7 Sec. 3.
25-05537 as introduced04/24/25 REVISOR VH/AC 25.1section 181.85, subdivision 2. For purposes of this section, wages are earned on the day an
25.2employee works. This section provides a substantive right for employees to the payment of
25.3wages, including salary, earnings, and gratuities, as well as commissions, in addition to the
25.4right to be paid at certain times.
25.5 (b) An employer of a volunteer or paid on-call firefighter, as defined in section 424A.001,
25.6subdivision 10, a member of an organized first responder squad that is formally recognized
25.7by a political subdivision in the state, or a volunteer ambulance driver or attendant must
25.8pay all wages earned by the volunteer firefighter, first responder, or volunteer ambulance
25.9driver or attendant at least once every 31 days, unless the employer and the employee
25.10mutually agree upon payment at longer intervals.
25.11Sec. 4. Minnesota Statutes 2024, section 356.633, subdivision 1, is amended to read:
25.12 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
25.13the meanings given.
25.14 (b) "Covered retirement plan" means a pension or retirement plan listed in section
25.15356.611, subdivision 6, and the Minnesota deferred compensation plan established under
25.16section 352.965.
25.17 (b) (c) "Distributee" means:
25.18 (1) a member of or participant in a covered retirement plan listed in section 356.611,
25.19subdivision 6;
25.20 (2) the surviving spouse of a member of or participant in a covered retirement plan;
25.21 (3) the former spouse of the a member of or participant in a covered retirement plan who
25.22is the alternate payee under a qualified domestic relations order as defined in section 414(p)
25.23of the Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution
25.24of marital property, as provided in section 518.58; or
25.25 (4) a nonspousal beneficiary of a member of or participant in a covered retirement plan
25.26who qualifies for a distribution under the plan and is a designated beneficiary as defined in
25.27section 401(a)(9)(E) of the Internal Revenue Code.
25.28 (c) (d) "Eligible retirement plan" means:
25.29 (1) an individual retirement account under section 408(a) or 408A of the Internal Revenue
25.30Code;
25.31 (2) an individual retirement annuity plan under section 408(b) of the Internal Revenue
25.32Code;
25Article 7 Sec. 4.
25-05537 as introduced04/24/25 REVISOR VH/AC 26.1 (3) an annuity plan under section 403(a) of the Internal Revenue Code;
26.2 (4) a qualified trust plan under section 401(a) of the Internal Revenue Code that accepts
26.3the distributee's eligible rollover distribution distributions;
26.4 (5) an annuity contract under section 403(b) of the Internal Revenue Code;
26.5 (6) an eligible deferred compensation plan under section 457(b) of the Internal Revenue
26.6Code, which including the Minnesota deferred compensation plan, that is maintained by a
26.7state or local government, accepts eligible rollover distributions, and which agrees to
26.8separately account for the amounts transferred into the plan;
26.9 (7) in the case of an eligible rollover distribution to a if the distributee is a surviving
26.10spouse or nonspousal beneficiary, an individual account or annuity treated as an inherited
26.11individual retirement account under section 402(c)(11) of the Internal Revenue Code; or
26.12 (8) a savings incentive match plan for employees of small employers (SIMPLE) individual
26.13retirement account under section 408(p) of the Internal Revenue Code, provided that the
26.14rollover distribution is made after the two-year period beginning on the date the distributee
26.15first participated in any qualified salary reduction arrangement maintained by the distributee's
26.16employer under section 408(p)(2) of the Internal Revenue Code, as described in section
26.1772(t)(6) of the Internal Revenue Code.
26.18 (d) (e) "Eligible rollover distribution" means any distribution of all or any portion of the
26.19balance to the credit of the distributee. An eligible rollover distribution does not include:
26.20 (1) a distribution that is one of a series of substantially equal periodic payments,
26.21receivable annually or more frequently, that is made for the life or life expectancy of the
26.22distributee, the joint lives or joint life expectancies of the distributee and the distributee's
26.23designated beneficiary, or for a specified period of ten years or more;
26.24 (2) a distribution that is required under section 401(a)(9) of the Internal Revenue Code;
26.25or
26.26 (3) a distribution that is less than $200; or
26.27 (3) (4) any other exception required by law or the Internal Revenue Code.
26.28Sec. 5. Minnesota Statutes 2024, section 356.633, subdivision 2, is amended to read:
26.29 Subd. 2.Right to elect direct rollover.Except as provided in subdivision 3 for after-tax
26.30contributions, a distributee may elect, at the time and in the manner prescribed by the plan
26.31administrator, to have all or any portion of an eligible rollover distribution from a covered
26.32retirement plan paid directly to an eligible retirement plan as specified by the distributee.
26Article 7 Sec. 5.
25-05537 as introduced04/24/25 REVISOR VH/AC 27.1 Sec. 6. Minnesota Statutes 2024, section 356.633, is amended by adding a subdivision to
27.2read:
27.3 Subd. 4.Notice.A covered retirement plan must provide the distributee of an eligible
27.4rollover distribution from the covered retirement plan with the notice required by section
27.5402(f) of the Internal Revenue Code within the time period prior to making the eligible
27.6rollover distribution, as required by regulations issued pursuant to section 402(f) of the
27.7Internal Revenue Code.
27.8 Sec. 7. [356.638] MILITARY SERVICE.
27.9 A covered retirement plan as defined in section 356.633, subdivision 1, paragraph (b),
27.10must require contributions and provide benefits, including death and disability benefits
27.11under section 401(a)(37) of the Internal Revenue Code, and service credit with respect to
27.12qualified military service according to section 414(u) of the Internal Revenue Code. If a
27.13member dies while the member is performing qualified military service as defined in United
27.14States Code, title 38, chapter 43, to the extent required by section 401(a)(37) of the Internal
27.15Revenue Code, survivors of the member are entitled to any additional benefits that the
27.16covered retirement plan would have provided if the member had resumed employment and
27.17then died, including but not limited to accelerated vesting or survivor benefits that are
27.18contingent on the member's death while employed. A deceased member's period of qualified
27.19military service must be counted for vesting purposes.
27.20Sec. 8. Minnesota Statutes 2024, section 424B.22, subdivision 1, is amended to read:
27.21 Subdivision 1.Application.(a) Notwithstanding any laws to the contrary, this section
27.22applies to:
27.23 (1) the termination of a retirement plan established and administered by a relief
27.24association, whether or not the relief association is also dissolved or eliminated; and
27.25 (2) the dissolution of a relief association that is not consolidating with another relief
27.26association under sections 424B.01 to 424B.10.
27.27 (b) This section does not apply to the dissolution of a relief association or the termination
27.28of a retirement plan that occurs due to the change in retirement coverage from a retirement
27.29plan administered by a relief association to the Public Employees Retirement Association
27.30statewide volunteer firefighter plan under section 353G.06.
27.31 (b) To terminate a retirement plan, the board of trustees must comply with subdivisions
27.323, 5 to 11, and, if desired, subdivision 4.
27Article 7 Sec. 8.
25-05537 as introduced04/24/25 REVISOR VH/AC 28.1 (c) To dissolve a relief association, the board of trustees of the relief association must:
28.2 (1) terminate the retirement plan in accordance with paragraph (b);
28.3 (2) determine all legal obligations of the special and general funds of the relief association,
28.4as required by subdivision 5;
28.5 (3) take the actions required by subdivision 12; and
28.6 (4) comply with the requirements governing dissolution of nonprofit corporations under
28.7chapter 317A.
28.8 (d) A relief association that terminates its retirement plan must liquidate its special fund
28.9as provided in subdivision 8, but need not liquidate its general fund if the relief association
28.10is not being dissolved.
28.11Sec. 9. Minnesota Statutes 2024, section 424B.22, is amended by adding a subdivision to
28.12read:
28.13 Subd. 1a.Voluntary dissolution and termination.(a) To terminate a retirement plan,
28.14the board of trustees must comply with subdivisions 3, 5 to 11, and, if desired, subdivision
28.154.
28.16 (b) To dissolve a relief association, the board of trustees of the relief association must:
28.17 (1) terminate the retirement plan in accordance with paragraph (a);
28.18 (2) determine all legal obligations of the special and general funds of the relief association,
28.19as required by subdivision 5;
28.20 (3) take the actions required by subdivision 12; and
28.21 (4) comply with the requirements governing dissolution of nonprofit corporations under
28.22chapter 317A.
28.23 (c) A relief association that terminates its retirement plan must liquidate its special fund
28.24as provided in subdivision 8, but need not liquidate its general fund if the relief association
28.25is not being dissolved.
28.26Sec. 10. Minnesota Statutes 2024, section 424B.22, subdivision 2, is amended to read:
28.27 Subd. 2.Involuntary dissolution and termination.(a) A relief association is dissolved
28.28and the retirement plan administered by the relief association is terminated automatically
28.29if:
28Article 7 Sec. 10.
25-05537 as introduced04/24/25 REVISOR VH/AC 29.1 (1) the fire department affiliated with a relief association is dissolved by action of the
29.2governing body of the municipality in which the fire department is located or by the
29.3governing body of the independent nonprofit firefighting corporation, whichever applies;
29.4or
29.5 (2) the fire department affiliated with a relief association has terminated the employment
29.6or services of all active members of the relief association.; or
29.7 (3) the governing body with which the fire department is affiliated has resolved to transfer
29.8the fire department's active part-time firefighters who are members of the relief association
29.9to the public employees police and fire retirement plan and filed the resolution with the
29.10Public Employees Retirement Association, and the relief association will have no remaining
29.11active firefighters when the transfer is completed.
29.12 (b) An involuntary termination of a relief association under this subdivision is effective
29.13on the December 31 that is at least eight months after the date on which the fire department
29.14is dissolved or the termination of employment or services of all active members of the relief
29.15association occurs.
29.16 (c) The board of trustees must comply with subdivisions 3 and 5 to 12. The board of
29.17trustees may comply with subdivision 4. The state auditor has the discretion to waive these
29.18requirements if the board of trustees requests a waiver in advance and provides adequate
29.19demonstration that meeting these requirements is not practicable.
29.20 (c) (d) The retirement plan administered by a relief association is terminated automatically
29.21if the relief association is dissolved, effective on the date of the dissolution of the relief
29.22association.
29.23Sec. 11. Minnesota Statutes 2024, section 424B.22, subdivision 3, is amended to read:
29.24 Subd. 3.Retirement plan termination date, full vesting, and forfeitures.(a) Unless
29.25subdivision 2 applies, the effective date of the termination of a retirement plan is the date
29.26approved by the board of trustees of the relief association. If the board of trustees does not
29.27approve a termination date, the effective date of the termination of a retirement plan is the
29.28effective date of the dissolution of the relief association or, if the relief association is not
29.29being dissolved, the end of the calendar year in which the termination of employment or
29.30services of all active members of the relief association occurs.
29.31 (b) As of the earlier of the retirement plan termination date or the date on which the
29.32termination of employment or services of all active members of the relief association occurs
29.33required by section 356.001, subdivision 3, each participant becomes fully (100 percent)
29Article 7 Sec. 11.
25-05537 as introduced04/24/25 REVISOR VH/AC 30.1member must become 100 percent vested in the participant's member's retirement benefit
30.2under accrued and funded to the earlier of the retirement plan termination date or the date
30.3on which the termination of employment or services of all active members of the relief
30.4association occurs, notwithstanding any bylaws or laws to the contrary, except for. For
30.5purposes of this paragraph:
30.6 (1) "member" does not mean any retiree in pay status who is receiving a monthly service
30.7pension from a relief association described in section 424A.093.; and
30.8 (2) crediting of interest on deferred service pensions under the terms of the relief
30.9association bylaws ends on the retirement plan termination date.
30.10 (c) If the relief association is a defined contribution relief association, the account of
30.11each participant who becomes 100 percent vested under paragraph (b) shall include an
30.12allocation of any forfeiture that is required, under the bylaws of the relief association, to
30.13occur on or as of the end of the calendar year during which the termination of the retirement
30.14plan is effective, if the participant is entitled to an allocation of forfeitures under the bylaws.
30.15Any account so forfeited shall not be included in the retirement benefits that become 100
30.16percent vested under paragraph (b).
30.17Sec. 12. REPEALER.
30.18 Minnesota Statutes 2024, section 356.635, subdivision 9, is repealed.
30.19Sec. 13. EFFECTIVE DATE.
30.20 Sections 1 to 12 are effective the day following final enactment.
30Article 7 Sec. 13.
25-05537 as introduced04/24/25 REVISOR VH/AC Page.Ln 1.19
LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT
................................................................................................................ARTICLE 1
Page.Ln 3.6STATEWIDE VOLUNTEER FIREFIGHTER PLAN...........................ARTICLE 2
Page.Ln 10.7IRAP TO TRA TRANSFERS................................................................ARTICLE 3
Page.Ln 12.6FIRE AND POLICE STATE AID..........................................................ARTICLE 4
Page.Ln 20.1STATE BOARD OF INVESTMENT.....................................................ARTICLE 5
Page.Ln 21.16PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN.............ARTICLE 6
Page.Ln 23.15MISCELLANEOUS TECHNICAL CORRECTIONS..........................ARTICLE 7
1
APPENDIX
Article locations for 25-05537 11A.27 REPORT ON INVESTMENT CONSULTANT ACTIVITIES AND
DELIVERABLES.
(a) Annually, on or before November 1, the State Board of Investment shall file a report with
the Legislative Reference Library on the activities and work product during that year of any
investment consultants retained by the board.
(b) The report must include the following items:
(1) the total contract fee paid to each investment consultant;
(2) a listing of the projects in which the investment consultant was involved; and
(3) examples of the written work product provided by the investment consultant on those projects
during the report coverage period.
356.635 INTERNAL REVENUE CODE COMPLIANCE.
Subd. 9.Military service.Contributions, benefits, including death and disability benefits under
section 401(a)(37) of the federal Internal Revenue Code, and service credit with respect to qualified
military service must be provided according to section 414(u) of the federal Internal Revenue Code.
For deaths occurring on or after January 1, 2007, while a member is performing qualified military
service as defined in United States Code, title 38, chapter 43, to the extent required by section
401(a)(37) of the Internal Revenue Code, survivors of a member in the system are entitled to any
additional benefits that the system would have provided if the member had resumed employment
and then died, including but not limited to accelerated vesting or survivor benefits that are contingent
on the member's death while employed. In any event, a deceased member's period of qualified
military service must be counted for vesting purposes.
1R
APPENDIX
Repealed Minnesota Statutes: 25-05537