Purpose of the Bill

The purpose of this bill is to modify how Minnesota manages its retirement system, specifically by changing the method for amortizing unfunded liabilities in its public retirement programs. It also seeks to introduce a clearer set of standards for actuarial work related to public pensions.

Main Provisions

• Amortization Method Changes: The bill proposes adjustments to how unfunded liabilities in public retirement plans are calculated and paid off. This involves specific changes to the actuarial methods used to determine these liabilities.

• Definition Updates: New definitions are introduced for terms such as "actuarial valuation," "entry age actuarial cost method," "experience study," "actuarial value of assets," "unfunded actuarial accrued liability," and "pension benefit obligation." These definitions help clarify how calculations for retirement plans should be conducted and reported.

• Actuarial Work Standards: The bill establishes new standards to guide the actuarial work conducted around public pensions. These standards are intended to ensure consistency and accuracy in how actuarial analyses are performed and presented.

Significant Changes to Existing Law

• Actuarial Valuations: The bill requires actuarial valuations to be conducted under more standardized assumptions, including specific methods for dealing with changes in asset values over time. This could mean more predictable and reliable assessments of pension fund health.

• Updated Reporting: By aligning these calculations with predefined standards, there would likely be a more cohesive understanding among stakeholders involved in managing and analyzing retirement funds.

Relevant Terms

• Retirement
• Unfunded liabilities
• Actuarial valuation
• Entry age actuarial cost method
• Experience study
• Actuarial value of assets
• Unfunded actuarial accrued liability
• Pension benefit obligation
• Actuarial work standards