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SAINT PAUL, Minnesota. May 4, 2023 – Minnesota teachers testified Thursday at a special meeting of the joint Legislative Commission on Pensions and Retirements in favor of a proposal to lower the normal retirement age to receive a state pension without penalties.
The bill, HF3294/SF3314, would increase the state’s investment in teacher pensions and bring down the state’s normal retirement age for teachers, 66, the third oldest in the United States, to 64, which is closer to the national average.
Supporters of the bill say it would begin to restore some fairness to the teacher pension rules after the state canceled the Rule of 90 decades ago. Under that rule, veteran teachers were often able to retire with a full pension in their late 50s. Under the current rules, teachers who started work after July 1, 1989, continue working until age 66 to qualify for a full pension.
Many Minnesota teachers attended the hearing or watched a livestream broadcast to Education Minnesota’s Facebook page. Several teachers testified Thursday and many submitted written comments to the members of the commission.
“In my 33 years of being an Education Minnesota member and teacher, I have never seen educators from all across the state come together on a single issue like pension reform,” said Julie Seiler, a band teacher. “The active passion from the grassroots members runs high on this topic and people are now fully aware of the situation the Minnesota government created on July 1, 1989, the ‘line in the sand’ that picked winners and losers. The division had been sown and created an unfair two-tier retirement system, even though all paid the same amount into their retirement.”
Teachers pay 7.5% of their paycheck into this retirement account, which is a higher employee contribution than plans in most other states. The contribution paid by states and districts, 8.55%, is lower than many other states. HF3294/SF3314 increases the employer contribution by 1%, at an ongoing cost of $61 million each year, while also increasing the employee’s contribution by 0.5%.
The proposal also lowers the Normal Retirement Age, or NRA, from age 66 to age 64, and scales down penalties for early retirement. With this proposal, teachers would have more flexibility to choose when they want to retire.
Education Minnesota Secretary-Treasurer Rodney Rowe told the commissioner he was sympathetic to the difficult decisions they had to make because of the complexity and expense of the pension system – and the intense feelings many teachers have for it.
“No one on this commission made the decision in 1989 to ask teachers to work until age 66 to get a full retirement benefit, one of the oldest retirement ages in the country,” Rowe said. “However, you have the power to lift up a struggling profession and bring that age closer to average. Reducing the normal retirement age will make it easier for teachers to access the full pension benefits they’ve earned over long careers. The state’s E-12 budget supports public education, but you have a special role in supporting public educators.”
Peter Eckhoff, a 3rd grade teacher for 29 years and president of the Robbinsdale Federation of Teachers, testified: “Since 1989, teaching has only gotten harder. I’m sure you’ve all seen it. Since we were students, class sizes have gone through the roof, mental health and behavioral issues are at crisis levels, and teachers are also expected to do more with less. Neither our salaries nor education spending have kept pace with inflation – despite our ever-growing list of needs to address. You know that we’re in it because we love teaching, we love caring for students, and helping them reach their goals. But the reality is hitting us that Rule of 90 is gone – that we’re seeing our colleagues, hired just before we were in many cases, retire up to 10 years earlier with no penalties, while we must hold on until a much later time than the average retirement age for teachers in the nation.”
Minnesota’s 2022 Teacher of the Year, Sarah Lancaster, who teaches 1st grade in Onamia Public Schools, told the commission that many teachers she knows across the state are considering leaving the profession.
“In order to retain teachers, whether they are at the beginning, middle, or celebrating the end of a rewarding career in education, we need a strong pension to reflect all of the hard work that we have done and will continue to put into this profession,” Lancaster said. “The NRA 64 proposal is a good first step to a pension system that can do that, as well as recruit new teachers into the profession. It is critical, now more than ever, that we continue to work to increase the number of highly qualified teachers.”
Education Minnesota appreciates the decision of the commission to hear the proposal and the union will advocate for its inclusion in the ongoing negotiations of the Legislature and Gov. Tim Walz. If passed into law, this proposal to lower the normal retirement age would be one of the most significant improvements to teacher pensions in the nation in decades.
About Education Minnesota
Education Minnesota is the voice for professional educators and students. Education Minnesota’s members include teachers and education support professionals in Minnesota’s public school districts, faculty members at Minnesota’s community and technical colleges and University of Minnesota campuses in Duluth and Crookston, retired educators and student teachers. Education Minnesota is affiliated with the American Federation of Teachers, National Education Association and AFL-CIO.