Minnesota Senate Bill SF2371

Minnesota 2023-2024 Regular Session

• Introduced: 3/2/23
• Refer: 3/2/23

Caption

Postretirement adjustments for PERA members receiving a basic member annuity from the general public employees retirement fund increase and providing funding

Impact

This legislation specifically amends existing Minnesota statutes related to the calculation of annual postretirement adjustments. It mandates that adjustments be made each January, depending on the cost-of-living adjustments announced by the federal government. For example, the increase for coordinated member benefits will be set at 1% unless there is a more substantial federal cost-of-living adjustment, but the rise will never exceed 1.5%. For basic member benefits, the increase is capped at 3.5% under similar conditions. Thus, the bill aims to provide a more stable and predictable adjustment process for retirement benefits while also taking into consideration national economic trends.

Summary

Senate File 2371 focuses on providing postretirement adjustments for members of the Public Employees Retirement Association (PERA) who are receiving basic member annuities. The bill proposes annual direct state aid of $6 million to support the general employees retirement fund, thereby facilitating the increase of annuities, disability benefits, and survivor benefits. This aid is designed to continue until the actuarial value of the fund balances out or until July 1, 2048, whichever occurs first. The adjustments established by this bill are intended to enhance the financial security of retired public employees in Minnesota and help them meet the rising costs of living.

Contention

Discussions around SF2371 may reflect contention regarding the sufficiency of funding for postretirement benefits and how it impacts the state's budget. Concerns could arise about whether appropriating funds from the general fund is sustainable long-term, particularly as demographic trends may lead to increased numbers of retirees reliant on these benefits. Additionally, there may be debates about the fairness of adjusting benefits based on federal guidelines, and whether this adequately addresses the financial realities faced by retirees. Stakeholders, including public employees and unions, may advocate for more robust adjustments, while fiscal conservatives may push back against the perceived potential for increased government expenditure.