Home Minnesota Educator Legislature passes some pension reform, Education Minnesota plans to continue advocacy

Legislature passes some pension reform, Education Minnesota plans to continue advocacy

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The 2023 Minnesota Legislative session ended with some reforms to educator pensions, but significant work remains. Education Minnesota is already planning for its continued advocacy for the rest of the year and into the next legislative session.

“Teaching has gotten so much harder since 1989, it just makes sense to make a full pension easier to access for the teachers who have given so much to our state,” Education Minnesota President Denise Specht said. “Pensions are also an important recruiting tool for talented people considering teaching as a career because the state of Minnesota is offering something corporate America never will—a defined-benefit pension with a reasonable retirement age. The new changes aren’t enough, but they are a step in the right direction, and they open the door to more improvements in the future. Our union will keep pushing.”

What did pass

HF3100 (as amended)
Passed out of the LCPR and impacted all four systems—Teachers Retirement Association, St. Paul Teacher’s Retirement Fund Association, Public Employee’s Retirement Association (general plan contains non-licensed school employees) and Minnesota State Retirement Association (CERP plan contains some teachers)—which all contain our Education Minnesota members.

Here is the one-time funding allocated to plans with our members and effects:

• One-time 2.5% COLA, non-compounded, for current retirees of all plans and 1.45% COLA for Basic Plan members (funds listed by plan below).
• $145 million to TRA for general liabilities and $31 million for the retiree COLAs.
• $148 million to PERA-General for general liabilities and reducing vesting period from five years to three years and $21.7 million for the retiree COLAs (also additional funding for other PERA plans).
• The lower vesting period goes into effect immediately.
• $12.8 million to SPTRFA for benefit improvement of 62/30 for an unreduced benefit (combined with 1% employee contribution increase) and $2.8 million for the retiree COLAs.
• The SPTRFA provision for an unreduced 62/30 benefit goes into effect July 1.
• The SPTRFA 1% employee increase goes into effect July 1, 2025.
• $9.5 million to MSRS-CERP (we have a small number of members in this plan) for general liabilities with $910,000 for retiree the COLAs (also additional funding for other MSRS plans).

HF1938

Pension improvements in the tax bill that included funding and lowering the NRA for Tier 2 teachers in TRA and SPTRFA. The funding and benefits are both delayed and will go into effect July 1, 2025.

Benefit improvement:

• The Normal Retirement Age (NRA) is lowered from 66 to 65 in both TRA and SPTRFA for the Tier 2 plans (Tier 1 was already 65) as of July 1, 2025.
• The impact on accumulated base penalties is lowering them by 7% at each age under 66.
• The impact to those with 30-plus years of service is a lowering of the penalties that result from the current 62/30 provision in TRA.

Funding:

• The employee contribution for TRA and SPTRFA would increase by .25% on July 1, 2025. SPTRFA’s increase is in addition to the 1% employee increase passed in HF3100.
• The employer contribution for TRA and SPTRFA would increase by .75% on July 1, 2025. The bill provides funding for the employer-side of the contribution, reimbursing districts and other employers. 
• The bill provides the only ongoing funding allocated this session for any of the four pension systems.

What’s next for pension reform?

Education Minnesota will continue to share information on next steps and ways to stay involved in our Pension Updates e-newsletters and on our website and social media channels. Make sure you are signed up for emails at www.educationminnesota.org/advocacy/at-the-legislature/pensions.

We are not stopping our advocacy and look forward to partnering with members to make sure educators in Minnesota are supported and valued with a fair pension benefit!

A message from one of our biggest allies in the Legislature

“I’m proud to stand with Minnesota’s teachers on pension reform. As the father of two school-aged daughters, I’ve seen the remarkable effort our teachers put into their jobs, and how difficult these last few years have been. I heard it from constituents in St. Cloud, and from teachers all over the state—we can and must do better for Minnesota’s teachers. The progress we made this year is just the first step toward achieving the long-term, meaningful pension reforms our educators deserve.”
– Rep. Dan Wolgamott, St. Cloud