2005 Minnesota Statutes - 354A.28 — Modification in Minneapolis Teachers Retirement Fund Association postretirement adjustment.

     354A.28 Modification in Minneapolis Teachers Retirement 
  Fund Association postretirement adjustment. 


    Subdivision 1.    Postretirement adjustment modification. 
  Any postretirement adjustment payable from the Minneapolis 
 Teachers Retirement Fund Association after June 1, 1993, must be 
 modified as provided in this section. 


    Subd. 2.    Establishment.  The Minneapolis Teachers 
 Retirement Fund Association shall establish an annuity reserve 
 fund for providing an investment vehicle for the reserves for 
 various retirement annuities and benefits payable by the fund. 


    Subd. 3.    Assets.  The assets of the annuity reserve 
 fund consist of the money representing the actuarially 
 determined required reserves for various retirement annuities 
 and benefits payable by the Minneapolis Teachers Retirement Fund 
 Association. 


    Subd. 4.    Management.  The Minneapolis Teachers 
 Retirement Fund Association annuity reserve fund must be managed 
 by the board of trustees of the Minneapolis Teachers Retirement 
 Fund Association. 


    Subd. 5.    Investment.  The assets of the annuity 
 reserve fund must be invested, reinvested, and retained in the 
 discretion of the board of trustees of the Minneapolis Teachers 
 Retirement Fund Association in authorized investments under 
 section 11A.24. 


    Subd. 6.    Allocation of assets.  No later than the 
 last business day of the month in which the benefit payment 
 begins, the board of trustees of the Minneapolis Teachers 
 Retirement Fund Association shall determine the reserves to be 
 allocated to the respective annuity reserve fund in the 
 following manner: 


    (1) the present value of the benefit payable to the 
 annuitant or benefit recipient must be determined using the 
 postretirement earnings assumptions specified for the first 
 class city teachers retirement funds in section 356.215, and the 
 mortality table applicable to the fund; and 


    (2) the amount determined in clause (1) must be multiplied 
 by the funding ratio of the teachers retirement fund association 
 determined for the previous fiscal year end, and the product 
 must be identified as the amount allocated to the annuity 
 reserve fund. 


    Subd. 7.    Withdrawal of money.  If the executive 
 director of the Minneapolis Teachers Retirement Fund Association 
 concludes that money is required for the payment of retirement 
 annuities or benefits, the executive director shall sell 
 sufficient securities in the reserve fund or transfer available 
 cash to pay benefits. 


    Subd. 8.    Calculation of postretirement adjustments.  
 (a) Annually, after June 30, the board of trustees of the 
 Minneapolis Teachers Retirement Fund Association shall use the 
 procedures in this subdivision and subdivision 9 to determine 
 the amount of any postretirement adjustment.  The authority to 
 pay the automatic two percent annual postretirement increase as 
 specified in the articles and bylaws continues. 


    Subd. 9.    Additional increase.  (a) In addition to the 
 postretirement increases granted under subdivision 8, an 
 additional percentage increase must be computed and paid under 
 this subdivision. 


    (b) The board of trustees shall determine the number of 
 annuities or benefit recipients who have been receiving an 
 annuity or benefit for at least 12 months as of the current June 
 30.  These recipients are entitled to receive the surplus 
 investment earnings additional postretirement increase. 


    (c) Annually, on June 30, the board of trustees of the 
 teachers retirement fund association shall determine the amount 
 of reserves in the annuity reserve fund as specified in 
 subdivision 6. 


    (d) Annually, on June 30, the board of trustees of the 
 Minneapolis Teachers Retirement Fund Association shall determine 
 the five-year annualized rate of return attributable to the 
 assets in the annuity reserve fund under the formula or formulas 
 specified in section 11A.04, clause (11). 


    (e) The board of trustees shall determine the amount of 
 excess five-year annualized rate of return over the 
 preretirement interest assumption as specified in section 
 356.215. 


    (f) The additional increase must be determined by 
 multiplying the quantity one minus the rate of contribution 
 deficiency, as specified in the most recent actuarial report of 
 the actuary retained by the legislative commission on pensions 
 and retirement, times the rate of return excess as determined in 
 paragraph (e). 


    (g) The additional increase is payable to all eligible 
 annuitants or benefit recipients on January 1 following the June 
 30 determination date under paragraphs (c) and (d). 


    HIST: 1993 c 357 s 7