Method for amortizing unfunded liabilities modified, definition for standards for actuarial work added, and conforming changes made.
Impact
If enacted, HF3249 would require actuarial valuations to conform to newly established standards, fundamentally changing how retirement plans determine their unfunded liabilities. Retirement funds would need to account for changes in investments and benefits more rigorously, which could lead to more accurate assessments of financial health. This can help ensure that the plans remain solvent and can meet their obligations to retirees, while also affecting how the state budgets for these liabilities in the future.
Summary
House File 3249 aims to modify the method for amortizing unfunded liabilities related to various pension and retirement plans in Minnesota. The bill introduces new definitions concerning actuarial work standards and makes several conforming changes to existing statutes, particularly Minnesota Statutes 2024, section 356.215. By establishing a clearer framework for how unfunded actuarial liabilities are calculated and reported, the bill seeks to improve the financial stability of retirement funds across the state.
Contention
Some points of contention surrounding HF3249 may stem from how the new standards might impact various retirement plans differently, especially in terms of required contributions and financial reporting obligations. Stakeholders may be concerned about the potential for increased financial burdens on plans that are already struggling to meet funding requirements. Moreover, changes in actuarial assumptions could lead to significant adjustments in contributions, causing debate among legislators and affected parties about the fairness and feasibility of the new requirements.
State Patrol retirement plan and public employees police and fire retirement plan provisions modified; employee contribution rates reduced; postretirement adjustments increased; vesting and return to work requirements modified, employer contribution rate decreased, and supplemental employer contribution added; and direct state aids increased and added.
State auditor's volunteer firefighter working group recommendations implemented, volunteer firefighters relief associations governing provisions modified, and conforming changes made.
Public Employees Retirement Association statewide volunteer firefighter plan; defined contribution plan added, frequency of funding requirement determinations reduced, firefighters with previous service allowed to request service credit for vesting purposes, and other technical and administrative changes made.
State Auditor's volunteer firefighter working group recommendations; volunteer firefighters relief association provisions amended, and conforming changes made.
Higher education individual retirement account plan; normal retirement age lowered to age 64, employee and employer contributions increased, end of amortization period extended to 2053, pension adjustment revenue increased for school districts, and money appropriated.
Minnesota Secure Choice Retirement Program Act administrative and technical changes provisions and commissioner of employment and economic development requirement to disclose information provision
Commissioner of employment and economic development required to disclose information, and administrative and technical changes made to the Minnesota Secure Choice Retirement Program Act.