Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF1937 Compare Versions

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Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to retirement; Minnesota State Retirement System; Public Employees
3	3	1.3 Retirement Association; Teachers Retirement Association; St. Paul Teachers'
4	4	1.4 Retirement Fund Association; restoring augmentation of deferred annuities for
5	5	1.5 members who left public employment before January 1, 2019; amending Minnesota
6	6	1.6 Statutes 2024, sections 352.22, subdivision 3a; 352B.08, subdivision 2b; 353.34,
7	7	1.7 subdivision 3; 354.55, subdivision 11; 354A.37, subdivision 2.
8	8	1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
9	9	1.9 Section 1. Minnesota Statutes 2024, section 352.22, subdivision 3a, is amended to read:
10	10	1.10 Subd. 3a.Computation of deferred annuity.(a) The deferred annuity of any former
11	11	1.11state employee must be augmented from the first day of the month following termination
12	12	1.12of active service or July 1, 1971, whichever is later, to the effective date of retirement.
13	13	1.13 (b) For a person who became a state employee before July 1, 2006, the annuity must be
14	14	1.14augmented at the following rate or rates, compounded annually:
15	15	1.15 (1) five percent until January 1, 1981;
16	16	1.16 (2) three percent thereafter until January 1 of the year following the year in which the
17	17	1.17former employee attains age 55 or January 1, 2012, whichever is earlier;
18	18	1.18 (3) five percent from the January 1 next following the attainment of age 55 until
19	19	1.19December 31, 2011; and
20	20	1.20 (4) two percent from January 1, 2012, until December 31, 2018; and
21	21	1.21 (5) after December 31, 2011, except that for any person who terminates active service
22	22	1.22after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
23	23	1.23annuity must not be augmented after December 31, 2018.
24	24	1Section 1.
25	25	25-01064 as introduced12/10/24 REVISOR BD/HL
26	26	SENATE
27	27	STATE OF MINNESOTA
28	28	S.F. No. 1937NINETY-FOURTH SESSION
29	29	(SENATE AUTHORS: MCEWEN)
30	30	OFFICIAL STATUSD-PGDATE
31	31	Introduction and first reading02/27/2025
32	32	Referred to State and Local Government 2.1 (c) For a person who became a state employee after June 30, 2006, the annuity must be
33	33	2.2augmented at the following rate or rates, compounded annually:
34	34	2.3 (1) 2.5 percent until December 31, 2011; and
35	35	2.4 (2) two percent from January 1, 2012, until December 31, 2018; and
36	36	2.5 (3) after December 31, 2011, except that for any person who terminates active service
37	37	2.6after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
38	38	2.7annuity must not be augmented after December 31, 2018.
39	39	2.8 (d) The retirement annuity or disability benefit of, or the survivor benefit payable on
40	40	2.9behalf of, a former state employee who terminated service before July 1, 1997, which is not
41	41	2.10first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
42	42	2.11to reflect the change in the investment return actuarial assumption under section 356.215,
43	43	2.12subdivision 8, from five percent to six percent under a calculation procedure and the tables
44	44	2.13adopted by the board and approved by the actuary retained under section 356.214.
45	45	2.14 EFFECTIVE DATE.This section is effective the day following final enactment.
46	46	2.15 Sec. 2. Minnesota Statutes 2024, section 352B.08, subdivision 2b, is amended to read:
47	47	2.16 Subd. 2b.Computation of deferred annuity.(a) The deferred annuity of any former
48	48	2.17member must be augmented from the first day of the month following the termination of
49	49	2.18active service, or July 1, 1971, whichever is later, to the effective date of retirement.
50	50	2.19 (b) For a person who became an employee before July 1, 2006, the annuity must be
51	51	2.20augmented at the following rate or rates, compounded annually:
52	52	2.21 (1) five percent until January 1, 1981;
53	53	2.22 (2) three percent from January 1, 1981, until December 31, 2011; and
54	54	2.23 (3) two percent from January 1, 2012, until December 31, 2018; and
55	55	2.24 (4) after December 31, 2011, except that for any person who terminates active service
56	56	2.25after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
57	57	2.26annuity must not be augmented after December 31, 2018.
58	58	2.27 (c) For a person who became an employee after June 30, 2006, the annuity must be
59	59	2.28augmented at the following rate or rates, compounded annually:
60	60	2.29 (1) 2.5 percent until December 31, 2011; and
61	61	2.30 (2) two percent from January 1, 2012, until December 31, 2018; and
62	62	2Sec. 2.
63	63	25-01064 as introduced12/10/24 REVISOR BD/HL 3.1 (3) after December 31, 2011, except that for any person who terminates active service
64	64	3.2after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
65	65	3.3annuity must not be augmented after December 1, 2018.
66	66	3.4 (d) The mortality table and investment return assumption used to compute the annuity
67	67	3.5must be those in effect when the member files application for annuity.
68	68	3.6 EFFECTIVE DATE.This section is effective the day following final enactment.
69	69	3.7 Sec. 3. Minnesota Statutes 2024, section 353.34, subdivision 3, is amended to read:
70	70	3.8 Subd. 3.Deferred annuity; eligibility; computation.(a) A member who is partially
71	71	3.9or 100 percent vested under section 353.01, subdivision 47, when termination of public
72	72	3.10service or termination of membership occurs has the option of leaving the member's
73	73	3.11accumulated deductions in the fund and being entitled to a deferred retirement annuity
74	74	3.12commencing at normal retirement age or to a deferred early retirement annuity under section
75	75	3.13353.30, subdivision 1a, 1b, 1c, or 5.
76	76	3.14 (b) The deferred annuity must be computed under section 353.29, subdivision 3, on the
77	77	3.15basis of the law in effect on the date of termination of public service or termination of
78	78	3.16membership, whichever is later, and, if the later of termination of public service or
79	79	3.17termination of membership is on or before December 31, 2011, the deferred annuity must
80	80	3.18be augmented as provided in paragraphs (c) to (e).
81	81	3.19 (c) The deferred annuity of any former member must be augmented from the first day
82	82	3.20of the month following the termination of active service, or July 1, 1971, whichever is later,
83	83	3.21to the effective date of retirement or, if earlier, December 31, 2018.
84	84	3.22 (d) For a person who became a public employee before July 1, 2006, and who has a
85	85	3.23termination of public service before January 1, 2012, the deferred annuity must be augmented
86	86	3.24at the following rate or rates, compounded annually:
87	87	3.25 (1) five percent until January 1, 1981;
88	88	3.26 (2) three percent from January 1, 1981, until January 1 of the year following the year in
89	89	3.27which the former member attains age 55 or December 31, 2011, whichever is earlier;
90	90	3.28 (3) five percent from January 1 of the year following the year in which the former member
91	91	3.29attains age 55, or December 31, 2011, whichever is earlier; and
92	92	3.30 (4) one percent from January 1, 2012, until December 31, 2018; and
93	93	3Sec. 3.
94	94	25-01064 as introduced12/10/24 REVISOR BD/HL 4.1 (5) after December 31, 2011, except that for any person who terminates active service
95	95	4.2after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
96	96	4.3annuity must not be augmented after December 1, 2018.
97	97	4.4 (e) For a person who became a public employee after June 30, 2006, and who has a
98	98	4.5termination of public service before January 1, 2012, the deferred annuity must be augmented
99	99	4.6at the following rate or rates, compounded annually:
100	100	4.7 (1) 2.5 percent until December 31, 2011; and
101	101	4.8 (2) one percent from January 1, 2012, until December 31, 2018; and
102	102	4.9 (3) after December 31, 2011, except that for any person who terminates active service
103	103	4.10after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
104	104	4.11annuity must not be augmented after December 31, 2018.
105	105	4.12 (f) For a person who has a termination of public service after December 31, 2011, the
106	106	4.13deferred annuity must not be augmented.
107	107	4.14 (g) The retirement annuity or disability benefit of, or the survivor benefit payable on
108	108	4.15behalf of, a former member who terminated service before July 1, 1997, or the survivor
109	109	4.16benefit payable on behalf of a basic or police and fire member who was receiving disability
110	110	4.17benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased
111	111	4.18on an actuarial equivalent basis to reflect the change in the investment return actuarial
112	112	4.19assumption under section 356.215, subdivision 8, from five percent to six percent under a
113	113	4.20calculation procedure and tables adopted by the board and approved by the actuary retained
114	114	4.21under section 356.214.
115	115	4.22 (h) A former member qualified to apply for a deferred retirement annuity may revoke
116	116	4.23this option at any time before the commencement of deferred annuity payments by making
117	117	4.24application for a refund. The person is entitled to a refund of accumulated member
118	118	4.25contributions within 30 days following date of receipt of the application by the executive
119	119	4.26director.
120	120	4.27 EFFECTIVE DATE.This section is effective the day following final enactment.
121	121	4.28 Sec. 4. Minnesota Statutes 2024, section 354.55, subdivision 11, is amended to read:
122	122	4.29 Subd. 11.Deferred annuity; augmentation.(a) Any person covered under section
123	123	4.30354.44, subdivision 6, who ceases to render teaching service, may leave the person's
124	124	4.31accumulated deductions in the fund for the purpose of receiving a deferred annuity at
125	125	4.32retirement.
126	126	4Sec. 4.
127	127	25-01064 as introduced12/10/24 REVISOR BD/HL 5.1 (b) The deferred retirement annuity of any former member must be augmented from the
128	128	5.2first day of the month following the termination of active service to the effective date of
129	129	5.3retirement.
130	130	5.4 (c) No augmentation is creditable if the deferral period is less than three months or if
131	131	5.5deferral commenced before July 1, 1971.
132	132	5.6 (d) For persons who became covered employees before July 1, 2006, the annuity must
133	133	5.7be augmented at the following rate or rates, compounded annually:
134	134	5.8 (1) five percent until January 1, 1981;
135	135	5.9 (2) three percent from January 1, 1981, until January 1 of the year following the year in
136	136	5.10which the deferred annuitant attains age 55 or June 30, 2012, whichever is earlier;
137	137	5.11 (3) five percent from the date established in clause (2) until June 30, 2012; and
138	138	5.12 (4) two percent from July 1, 2012, until June 30, 2019; and
139	139	5.13 (5) after June 30, 2012, except that for any person who terminates active service after
140	140	5.14June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
141	141	5.15not be augmented after June 30, 2019.
142	142	5.16 (e) For persons who become covered employees after June 30, 2006, the annuity must
143	143	5.17be augmented at the following rate or rates, compounded annually:
144	144	5.18 (1) 2.5 percent until June 30, 2012; and
145	145	5.19 (2) two percent from July 1, 2012, until June 30, 2019; and
146	146	5.20 (3) after June 30, 2012, except that for any person who terminates active service after
147	147	5.21June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
148	148	5.22not be augmented after June 30, 2019.
149	149	5.23 (f) In no case may the annuity payable under this subdivision be less than the amount
150	150	5.24of annuity payable under section 354.44, subdivision 6.
151	151	5.25 (g) The requirements and provisions for retirement before normal retirement age contained
152	152	5.26in section 354.44, subdivision 6, also apply to an employee fulfilling the requirements with
153	153	5.27a combination of service as provided in section 356.311.
154	154	5.28 (h) The augmentation provided by this subdivision applies to the benefit provided in
155	155	5.29section 354.46, subdivision 2.
156	156	5Sec. 4.
157	157	25-01064 as introduced12/10/24 REVISOR BD/HL 6.1 (i) The augmentation provided by this subdivision does not apply to any period in which
158	158	6.2a person is on an approved leave of absence from an employer unit covered by the provisions
159	159	6.3of this chapter.
160	160	6.4 (j) The retirement annuity or disability benefit of, or the survivor benefit payable on
161	161	6.5behalf of, a former teacher who terminated service before July 1, 1997, which is not first
162	162	6.6payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
163	163	6.7reflect the change in the investment return actuarial assumption under section 356.215,
164	164	6.8subdivision 8, from five percent to six percent under a calculation procedure and tables
165	165	6.9adopted by the board as recommended by an approved actuary and approved by the actuary
166	166	6.10retained under section 356.214.
167	167	6.11 EFFECTIVE DATE.This section is effective the day following final enactment.
168	168	6.12 Sec. 5. Minnesota Statutes 2024, section 354A.37, subdivision 2, is amended to read:
169	169	6.13 Subd. 2.Eligibility for deferred retirement annuity.(a) Any coordinated member
170	170	6.14who ceases to render teaching services for the school district in which the teachers retirement
171	171	6.15fund association is located, with sufficient allowable service credit to meet the minimum
172	172	6.16service requirements specified in section 354A.31, subdivision 1, shall be entitled to a
173	173	6.17deferred annuity in lieu of a refund under subdivision 1.
174	174	6.18 (b) The deferred annuity must be augmented from the first day of the month following
175	175	6.19the termination of active service to the effective date of retirement. There is no augmentation
176	176	6.20if this period is less than three months.
177	177	6.21 (c) The deferred annuity commences upon application after the person on deferred status
178	178	6.22attains at least the minimum age specified in section 354A.31, subdivision 1.
179	179	6.23 (d) For a person who became a covered employee before July 1, 2006, the annuity must
180	180	6.24be augmented at the following rate or rates, compounded annually:
181	181	6.25 (1) three percent until January 1 of the year following the year in which the former
182	182	6.26member attains age 55 or June 30, 2012, whichever is earlier;
183	183	6.27 (2) five percent from the January 1 next following the attainment of age 55 or until June
184	184	6.2830, 2012; and
185	185	6.29 (3) two percent from July 1, 2012, until June 30, 2019; and
186	186	6.30 (4) after June 30, 2012, except that for any person who terminates active service after
187	187	6.31June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
188	188	6.32not be augmented after June 30, 2019.
189	189	6Sec. 5.
190	190	25-01064 as introduced12/10/24 REVISOR BD/HL 7.1 (e) For a person who became a covered employee after June 30, 2006, the annuity must
191	191	7.2be augmented at the following rate or rates, compounded annually:
192	192	7.3 (1) 2.5 percent until June 30, 2012; and
193	193	7.4 (2) two percent from July 1, 2012, until June 30, 2019; and
194	194	7.5 (3) after June 30, 2012, except that for any person who terminates active service after
195	195	7.6June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
196	196	7.7not be augmented after June 30, 2019.
197	197	7.8 (f) The augmentation provided by this subdivision applies to the benefit provided in
198	198	7.9section 354A.35, subdivision 2. The augmentation provided by this subdivision does not
199	199	7.10apply to any period in which a person is on an approved leave of absence from an employer
200	200	7.11unit.
201	201	7.12 EFFECTIVE DATE.This section is effective the day following final enactment.
202	202	7.13 Sec. 6. RETROACTIVE IMPLEMENTATION.
203	203	7.14 Subdivision 1.Minnesota State Retirement System.(a) The executive director of the
204	204	7.15Minnesota State Retirement System must recalculate the annuity of any former state employee
205	205	7.16who started to receive a pension from the general state employees retirement plan, the
206	206	7.17correctional state employees retirement plan, or the State Patrol retirement plan on or after
207	207	7.18January 1, 2019, and whose monthly pension amount would have been larger had sections
208	208	7.191 and 2 been in effect on January 1, 2019.
209	209	7.20 (b) For each former state employee, the executive director must adjust the ongoing
210	210	7.21annuity amount so that it is the amount calculated under section 1 or 2, as applicable, taking
211	211	7.22into account any election of any optional annuity forms of payment and any postretirement
212	212	7.23increases.
213	213	7.24 (c) The executive director must offer a lump sum distribution to the former state employee
214	214	7.25of the difference between the monthly amount determined under section 1 or 2, as applicable,
215	215	7.26and the monthly amount being paid to the former state employee, multiplied by the number
216	216	7.27of monthly payments made to the former state employee before the annuity calculated under
217	217	7.28section 1 or 2, as applicable, begins. The lump sum must be adjusted to take into account
218	218	7.29any election of any optional annuity forms of payment and any postretirement increases.
219	219	7.30The former state employee may elect a distribution of the lump sum or a direct rollover
220	220	7.31under Minnesota Statutes, section 356.633, subdivisions 1 and 2, if the lump sum is an
221	221	7.32eligible rollover distribution as defined in Minnesota Statutes, section 356.633, subdivision
222	222	7.331, paragraph (d).
223	223	7Sec. 6.
224	224	25-01064 as introduced12/10/24 REVISOR BD/HL 8.1 Subd. 2.Public Employees Retirement Association.(a) The executive director of the
225	225	8.2Public Employees Retirement Association must recalculate the annuity of any former public
226	226	8.3employee who started to receive a pension from the general employees retirement plan, the
227	227	8.4local government correctional service retirement plan, or the public employees police and
228	228	8.5fire plan on or after January 1, 2019, and whose monthly pension amount would have been
229	229	8.6larger had section 3 been in effect on January 1, 2019.
230	230	8.7 (b) For each former public employee, the executive director must adjust the ongoing
231	231	8.8annuity amount so that it is the amount calculated under section 3, taking into account any
232	232	8.9election of any optional annuity forms of payment and any postretirement increases.
233	233	8.10 (c) The executive director must offer a lump sum distribution to the former public
234	234	8.11employee of the difference between the monthly amount determined under section 3 and
235	235	8.12the monthly amount being paid to the former public employee, multiplied by the number
236	236	8.13of monthly payments made to the former public employee before the annuity calculated
237	237	8.14under section 3 begins. The lump sum must be adjusted to take into account any election
238	238	8.15of any optional annuity forms of payment and any postretirement increases. The former
239	239	8.16public employee may elect a distribution of the lump sum or a direct rollover under Minnesota
240	240	8.17Statutes, section 356.633, subdivisions 1 and 2, if the lump sum is an eligible rollover
241	241	8.18distribution as defined in Minnesota Statutes, section 356.633, subdivision 1, paragraph (d).
242	242	8.19 Subd. 3.Teachers Retirement Association.(a) The executive director of the Teachers
243	243	8.20Retirement Association must recalculate the annuity of any former teacher who started to
244	244	8.21receive a pension from the Teachers Retirement Association on or after July 1, 2019, and
245	245	8.22whose monthly pension amount would have been larger had section 4 been in effect on July
246	246	8.231, 2019.
247	247	8.24 (b) For each former teacher, the executive director must adjust the ongoing annuity
248	248	8.25amount so that it is the amount calculated under section 4, taking into account any election
249	249	8.26of any optional annuity forms of payment and any postretirement increases.
250	250	8.27 (c) The executive director must offer a lump sum distribution to the former teacher of
251	251	8.28the difference between the monthly amount determined under section 4 and the monthly
252	252	8.29amount being paid to the former teacher, multiplied by the number of monthly payments
253	253	8.30made to the former teacher before the annuity calculated under section 4 begins. The lump
254	254	8.31sum must be adjusted to take into account any election of any optional annuity forms of
255	255	8.32payment and any postretirement increases. The former teacher may elect a distribution of
256	256	8.33the lump sum or a direct rollover under Minnesota Statutes, section 356.633, subdivisions
257	257	8Sec. 6.
258	258	25-01064 as introduced12/10/24 REVISOR BD/HL 9.11 and 2, if the lump sum is an eligible rollover distribution as defined in Minnesota Statutes,
259	259	9.2section 356.633, subdivision 1, paragraph (d).
260	260	9.3 Subd. 4.St. Paul Teachers' Retirement Fund Association.(a) The executive director
261	261	9.4of the St. Paul Teachers' Retirement Fund Association must recalculate the annuity of any
262	262	9.5former teacher who started to receive a pension from the St. Paul Teachers' Retirement Fund
263	263	9.6Association on or after July 1, 2019, and whose monthly pension amount would have been
264	264	9.7larger had section 5 been in effect on July 1, 2019.
265	265	9.8 (b) For each former teacher, the executive director must adjust the ongoing annuity
266	266	9.9amount so that it is the amount calculated under section 5, taking into account any election
267	267	9.10of any optional annuity forms of payment and any postretirement increases.
268	268	9.11 (c) The executive director must offer a lump sum distribution to the former teacher of
269	269	9.12the difference between the monthly amount determined under section 5 and the monthly
270	270	9.13amount being paid to the former teacher, multiplied by the number of monthly payments
271	271	9.14made to the former teacher before the annuity calculated under section 5 begins. The lump
272	272	9.15sum must be adjusted to take into account any election of any optional annuity forms of
273	273	9.16payment and any postretirement increases. The former teacher may elect a distribution of
274	274	9.17the lump sum or a direct rollover under Minnesota Statutes, section 356.633, subdivisions
275	275	9.181 and 2, if the lump sum is an eligible rollover distribution as defined in Minnesota Statutes,
276	276	9.19section 356.633, subdivision 1, paragraph (d).
277	277	9.20 EFFECTIVE DATE.This section is effective the day following final enactment.
278	278	9Sec. 6.
279	279	25-01064 as introduced12/10/24 REVISOR BD/HL