Minn. Stat. § 354A.12 – Contributions by employee and employer

Subd. 1. Employee contributions.
The contribution required to be paid by each member of a teachers retirement fund association shall not be less than the percentage of total salary specified below for the applicable association and program:
Association and Program Percentage of
Total Salary
Duluth teachers retirement
association
old law and new law
coordinated programs 5.5 percent
Minneapolis teachers retirement
association
basic program 8.5 percent
coordinated program 5.5 percent
St. Paul teachers retirement
association
basic program 8 percent
coordinated program 5.5 percent
Contributions shall be made by deduction from salary and must be remitted directly to the respective teachers retirement fund association at least once each month.
Subd. 1a. Obligation for omitted salary deductions.
If the full required contributions are not deducted from the salary of a teacher, payment of the shortage in such deductions is the sole obligation of the employing unit during the three-year period following the end of the fiscal year in which the shortage occurred. The shortage is payable by the employing unit upon notification of the shortage by the executive director of the applicable retirement fund association. The employing unit shall also pay any employer contributions related to the shortage. The amount of the shortage in employee contributions and associated employer contributions is payable with interest at the preretirement interest assumption for the retirement fund as specified in section 356.215, subdivision 4d, stated as a monthly rate from the date due until the date payment is received in the office of the association, with a minimum interest charge of $10. If the shortage payment and interest is not paid by the employing unit within 60 days of notification, the executive director shall certify the amount of the shortage payment and interest to the commissioner of finance, who shall deduct the amount from any state aid or appropriation amount applicable to the employing unit.
Subd. 2. Retirement contribution levy disallowed.
Except as provided in subdivision 3b and in section 423A.02, subdivision 3, with respect to the city of Minneapolis and special school district No. 1 and in section 423A.02, subdivision 3, with respect to independent school district No. 625, notwithstanding any law to the contrary, levies for teachers retirement fund associations in cities of the first class, including levies for any employer social security taxes for teachers covered by the Duluth teachers retirement fund association or the Minneapolis teachers retirement fund association or the St. Paul teachers retirement fund association, are disallowed.
Subd. 2a. Employer regular and additional contribution rates.
1. (a) The employing units shall make the following employer contributions to teachers retirement fund associations:
  1. (1) for any coordinated member of a teachers retirement fund association in a city of the first class, the employing unit shall pay the employer social security taxes in accordance with section 355.46, subdivision 3, clause (b);
  2. (2) for any coordinated member of one of the following teachers retirement fund associations in a city of the first class, the employing unit shall make a regular employer contribution to the respective retirement fund association in an amount equal to the designated percentage of the salary of the coordinated member as provided below:
    Duluth teachers retirement fund association 4.50 percent Minneapolis teachers retirement fund association 4.50 percent St. Paul teachers retirement fund association 4.50 percent;
  3. (3) for any basic member of one of the following teachers retirement fund associations in a city of the first class, the employing unit shall make a regular employer contribution to the respective retirement fund in an amount equal to the designated percentage of the salary of the basic member as provided below:
    Minneapolis teachers retirement
    fund association 8.50 percent
    St. Paul teachers retirement
    fund association 8.00 percent
  4. (4) for a basic member of a teachers retirement fund association in a city of the first class, the employing unit shall make an additional employer contribution to the respective fund in an amount equal to the designated percentage of the salary of the basic member, as provided below:
    Minneapolis teachers retirement
    fund association
    July 1, 1993 - June 30, 1994 4.85 percent
    July 1, 1994, and thereafter 3.64 percent
    St. Paul teachers retirement
    fund association
    July 1, 1993 - June 30, 1995 4.63 percent
    July 1, 1995, and thereafter 3.64 percent
  5. (5) for a coordinated member of a teachers retirement fund association in a city of the first class, the employing unit shall make an additional employer contribution to the respective fund in an amount equal to the applicable percentage of the coordinated member's salary, as provided below:
    Duluth teachers retirement
    fund association 1.29 percent
    Minneapolis teachers retirement
    fund association
    July 1, 1993 - June 30, 1994 0.50 percent
    July 1, 1994, and thereafter 3.64 percent
    St. Paul teachers retirement
    fund association
    July 1, 1993 - June 30, 1994 0.50 percent
    July 1, 1994 - June 30, 1995 1.50 percent
    July 1, 1997, and thereafter 3.84 percent
2. (b) The regular and additional employer contributions must be remitted directly to the respective teachers retirement fund association at least once each month. Delinquent amounts are payable with interest under the procedure in subdivision 1a.
3. (c) Payments of regular and additional employer contributions for school district or technical college employees who are paid from normal operating funds must be made from the appropriate fund of the district or technical college.
Subd. 2b.
Repealed, 1997 c 233 art 3 s 12
Subd. 3.
Repealed, 1Sp1985 c 12 art 11 s 22
Subd. 3a. Special direct state aid to first class city teachers retirement fund associations.
1. (a) In fiscal year 1998, the state shall pay $4,827,000 to the St. Paul teachers retirement fund association, $17,954,000 to the Minneapolis teachers retirement fund association, and $486,000 to the Duluth teachers retirement fund association. In each subsequent fiscal year, these payments to the first class city teachers retirement fund associations must be $2,827,000 for St. Paul, $12,954,000 for Minneapolis, and $486,000 for Duluth.
2. (b) The direct state aids under this subdivision are payable October 1 annually. The commissioner of finance shall pay the direct state aid. The amount required under this subdivision is appropriated annually from the general fund to the commissioner of finance.
Subd. 3b. Special direct state matching aid to the Minneapolis teachers retirement fund association.
1. (a) Special school district No. 1 may make an additional employer contribution to the Minneapolis teachers retirement fund association. The city of Minneapolis may make a contribution to the Minneapolis teachers retirement fund association. This contribution may be made by a levy of the board of estimate and taxation of the city of Minneapolis and the levy, if made, is classified as that of a special taxing district for purposes of sections 275.065 and 276.04, and for all other property tax purposes.
2. (b) For every $1,000 contributed in equal proportion by special school district No. 1 and by the city of Minneapolis to the Minneapolis teachers retirement fund association under paragraph (a), the state shall pay to the Minneapolis teachers retirement fund association $1,000, but not to exceed $2,500,000 in total in fiscal year 1994. The superintendent of special school district No. 1, the mayor of the city of Minneapolis, and the executive director of the Minneapolis teachers retirement fund association shall jointly certify to the commissioner of finance the total amount that has been contributed by special school district No. 1 and by the city of Minneapolis to the Minneapolis teachers retirement fund association. Any certification to the commissioner of children, families, and learning must be made quarterly. If the total certifications for a fiscal year exceed the maximum annual direct state matching aid amount in any quarter, the amount of direct state matching aid payable to the Minneapolis teachers retirement fund association must be limited to the balance of the maximum annual direct state matching aid amount available. The amount required under this paragraph, subject to the maximum direct state matching aid amount, is appropriated annually to the commissioner of finance.
3. (c) The commissioner of finance may prescribe the form of the certifications required under paragraph (b).
Subd. 3c. Termination of supplemental contributions and direct matching and state aid.
1. (a) The supplemental contributions payable to the Minneapolis teachers retirement fund association by special school district No. 1 and the city of Minneapolis under section 423A.02, subdivision 3, or to the St. Paul teachers retirement fund association by independent school district No. 625 under section 423A.02, subdivision 3, or the direct state aids under subdivision 3a to the first class city teachers retirement associations, and the direct matching and state aid under subdivision 3b to the Minneapolis teachers retirement fund association terminate for the respective fund at the end of the fiscal year in which the accrued liability funding ratio for that fund, as determined in the most recent actuarial report for that fund by the actuary retained by the legislative commission on pensions and retirement, equals or exceeds the accrued liability funding ratio for the teachers retirement association, as determined in the most recent actuarial report for the teachers retirement association by the actuary retained by the legislative commission on pensions and retirement.
2. (b) If the state direct matching, state supplemental, or state aid is terminated for a first class city teachers retirement fund association under paragraph (a), it may not again be received by that fund.
3. (c) If either the Minneapolis teachers retirement fund association, the St. Paul teachers retirement fund association, or the Duluth teachers retirement fund association remain funded at less than the funding ratio applicable to the teachers retirement association when the provisions of paragraph (b) become effective, then any state aid not distributed to that association must be immediately transferred to the other associations in proportion to the relative sizes of their unfunded actuarial accrued liabilities.
Subd. 3d. Supplemental administrative expense assessment.
1. (a) The active and retired membership of the Minneapolis teachers retirement fund association and of the St. Paul teachers retirement fund association is responsible for defraying supplemental administrative expenses other than investment expenses of the respective teacher retirement fund association.
2. (b) Investment expenses of the teachers retirement fund association are those expenses incurred by or on behalf of the retirement fund in connection with the investment of the assets of the retirement fund other than investment security transaction costs. Other administrative expenses are all expenses incurred by or on behalf of the retirement fund for all other retirement fund functions other than the investment of retirement fund assets. Investment and other administrative expenses must be accounted for using generally accepted accounting principles and in a manner consistent with the comprehensive annual financial report of the teachers retirement fund association for the immediately previous fiscal year under section 356.20.
3. (c) Supplemental administrative expenses other than investment expenses of a first class city teacher retirement fund association are those expenses for the fiscal year that exceed the amount computed by applying the most recent percentage of pay administrative expense amount, other than investment expenses, for the teachers retirement association governed by chapter 354 to the covered payroll of the respective teachers retirement fund association for the fiscal year.
4. (d) The board of trustees of each first class city teachers retirement fund association shall allocate the total dollar amount of supplemental administrative expenses other than investment expenses among the various active and retired membership groups of the teachers retirement fund association and shall assess the various membership groups their respective share of the supplemental administrative expenses other than investment expenses, in amounts determined by the board of trustees. The supplemental administrative expense assessments must be paid by the membership group in a manner determined by the board of trustees of the respective teachers retirement association. Supplemental administrative expenses payable by the active members of the pension plan must be picked up by the employer in accordance with section 356.62.
5. (e) With respect to the St. Paul teachers retirement fund association, the supplemental administrative expense assessment must be fully disclosed to the various active and retired membership groups of the teachers retirement fund association. The chief administrative officer of the St. Paul teachers retirement fund association shall prepare a supplemental administrative expense assessment disclosure notice, which must include the following:
  1. (1) the total amount of administrative expenses of the St. Paul teachers retirement fund association, the amount of the investment expenses of the St. Paul teachers retirement fund association, and the net remaining amount of administrative expenses of the St. Paul teachers retirement fund association;
  2. (2) the amount of administrative expenses for the St. Paul teachers retirement fund association that would be equivalent to the teachers retirement association noninvestment administrative expense level described in paragraph (c);
  3. (3) the total amount of supplemental administrative expenses required for assessment calculated under paragraph (c);
  4. (4) the portion of the total amount of the supplemental administrative expense assessment allocated to each membership group and the rationale for that allocation;
  5. (5) the manner of collecting the supplemental administrative expense assessment from each membership group, the number of assessment payments required during the year, and the amount of each payment or the procedure used to determine each payment; and
  6. (6) any other information that the chief administrative officer determines is necessary to fairly portray the manner in which the supplemental administrative expense assessment was determined and allocated.
6. (f) The disclosure notice must be provided annually in the annual report of the association.
7. (g) The supplemental administrative expense assessments must be deposited in the applicable teachers retirement fund upon receipt.
8. (h) Any omitted active membership group assessments that remain undeducted and unpaid to the teachers retirement fund association for 90 days must be paid by the respective school district. The school district may recover any omitted active membership group assessment amounts that it has previously paid. The teachers retirement fund association shall deduct any omitted retired membership group assessment amounts from the benefits next payable after the discovery of the omitted amounts.
Subd. 4. Limitation on certain articles of incorporation or bylaw amendments.
No amendment to the bylaws or articles of incorporation of a teachers retirement fund association in a city of the first class affecting benefits, contributions or actuarial assumptions shall be made without approval by the legislature. Approval shall be deemed granted and the amendment shall become effective only upon enactment of special or general legislation detailing the substance of the amendment and upon submission of the text of the proposed amendment to the articles of incorporation or bylaws by the teachers retirement fund association involved to the legislative commission on pensions and retirement prior to the effective date of the amendment. Notwithstanding any provision of the articles of incorporation or bylaws to the contrary, amendments may be adopted at an annual meeting or at a special meeting called for that purpose, without further local approval.
Subd. 5. Reporting and remittance requirements.
1. (a) Each employing unit shall provide to the appropriate teachers retirement fund association the following member data regarding all new or returning employees before the employee's first payroll date in a format approved by the executive secretary or director. Data changes and the dates of those changes must be reported to the association on an ongoing basis for the payroll cycle in which they occur. Data on the member includes:
  1. (1) legal name, address, date of birth, association member number, employer-assigned employee number, and social security number;
  2. (2) association status, including, but not limited to, basic, coordinated, exempt annuitant, exempt technical college teacher, or exempt independent contractor or consultant;
  3. (3) employment status, including, but not limited to, full time, part time, intermittent, substitute, or part-time mobility;
  4. (4) employment position, including, but not limited to, teacher, superintendent, principal, administrator, or other;
  5. (5) employment activity, including, but not limited to, hire, termination, resumption of employment, disability, or death;
  6. (6) leaves of absence; and
  7. (7) other information as may be required by the association.
2. (b) Each employing unit shall provide the following data to the appropriate association for each payroll cycle in a format approved by the executive secretary or director:
  1. (1) an association member number;
  2. (2) employer-assigned employee number;
  3. (3) social security number;
  4. (4) amount of each salary deduction;
  5. (5) amount of salary as defined in section 354A.011, subdivision 24, from which each deduction was made;
  6. (6) reason for payment;
  7. (7) service credit;
  8. (8) the beginning and ending dates of the payroll period covered and the date of actual payment;
  9. (9) fiscal year of salary earnings;
  10. (10) total remittance amount including employee, employer, and employer additional contributions; and
  11. (11) other information as may be required by the association.
3. (c) On or before August 1 each year, each employing unit must report to the appropriate association giving an itemized summary for the preceding 12 months of the total amount that was withheld from the salaries of teachers for deductions and all other information required by the association.
4. (d) An employing unit that does not comply with the reporting requirements under this section shall pay a fine of $5 per calendar day until the association receives the required member data.
5. (e) An employing unit shall remit all amounts that are due to the association and shall furnish for each pay period an itemized statement indicating the total amount that is due and is transmitted with any other information required by the association. All amounts due and other employer obligations that are not remitted within 30 days of notification by the association must be certified by the director or secretary to the commissioner of finance, who shall deduct the amount from any state aid or appropriation amount applicable to the employing unit and shall transmit the deducted amount to the applicable association.