1.1 A bill for an act
1.2 relating to retirement; Minnesota State Retirement System; Public Employees
1.3 Retirement Association; Teachers Retirement Association; St. Paul Teachers'
1.4 Retirement Fund Association; restoring augmentation of deferred annuities for
1.5 members who left public employment before January 1, 2019; amending Minnesota
1.6 Statutes 2024, sections 352.22, subdivision 3a; 352B.08, subdivision 2b; 353.34,
1.7 subdivision 3; 354.55, subdivision 11; 354A.37, subdivision 2.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2024, section 352.22, subdivision 3a, is amended to read:
1.10 Subd. 3a.Computation of deferred annuity.(a) The deferred annuity of any former
1.11state employee must be augmented from the first day of the month following termination
1.12of active service or July 1, 1971, whichever is later, to the effective date of retirement.
1.13 (b) For a person who became a state employee before July 1, 2006, the annuity must be
1.14augmented at the following rate or rates, compounded annually:
1.15 (1) five percent until January 1, 1981;
1.16 (2) three percent thereafter until January 1 of the year following the year in which the
1.17former employee attains age 55 or January 1, 2012, whichever is earlier;
1.18 (3) five percent from the January 1 next following the attainment of age 55 until
1.19December 31, 2011; and
1.20 (4) two percent from January 1, 2012, until December 31, 2018; and
1.21 (5) after December 31, 2011, except that for any person who terminates active service
1.22after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
1.23annuity must not be augmented after December 31, 2018.
1Section 1.
25-01064 as introduced12/10/24 REVISOR BD/HL
SENATE
STATE OF MINNESOTA
S.F. No. 1937NINETY-FOURTH SESSION
(SENATE AUTHORS: MCEWEN)
OFFICIAL STATUSD-PGDATE
Introduction and first reading02/27/2025
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
2.2augmented at the following rate or rates, compounded annually:
2.3 (1) 2.5 percent until December 31, 2011; and
2.4 (2) two percent from January 1, 2012, until December 31, 2018; and
2.5 (3) after December 31, 2011, except that for any person who terminates active service
2.6after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
2.7annuity must not be augmented after December 31, 2018.
2.8 (d) The retirement annuity or disability benefit of, or the survivor benefit payable on
2.9behalf of, a former state employee who terminated service before July 1, 1997, which is not
2.10first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
2.11to reflect the change in the investment return actuarial assumption under section 356.215,
2.12subdivision 8, from five percent to six percent under a calculation procedure and the tables
2.13adopted by the board and approved by the actuary retained under section 356.214.
2.14 EFFECTIVE DATE.This section is effective the day following final enactment.
2.15 Sec. 2. Minnesota Statutes 2024, section 352B.08, subdivision 2b, is amended to read:
2.16 Subd. 2b.Computation of deferred annuity.(a) The deferred annuity of any former
2.17member must be augmented from the first day of the month following the termination of
2.18active service, or July 1, 1971, whichever is later, to the effective date of retirement.
2.19 (b) For a person who became an employee before July 1, 2006, the annuity must be
2.20augmented at the following rate or rates, compounded annually:
2.21 (1) five percent until January 1, 1981;
2.22 (2) three percent from January 1, 1981, until December 31, 2011; and
2.23 (3) two percent from January 1, 2012, until December 31, 2018; and
2.24 (4) after December 31, 2011, except that for any person who terminates active service
2.25after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
2.26annuity must not be augmented after December 31, 2018.
2.27 (c) For a person who became an employee after June 30, 2006, the annuity must be
2.28augmented at the following rate or rates, compounded annually:
2.29 (1) 2.5 percent until December 31, 2011; and
2.30 (2) two percent from January 1, 2012, until December 31, 2018; and
2Sec. 2.
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
3.2after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
3.3annuity must not be augmented after December 1, 2018.
3.4 (d) The mortality table and investment return assumption used to compute the annuity
3.5must be those in effect when the member files application for annuity.
3.6 EFFECTIVE DATE.This section is effective the day following final enactment.
3.7 Sec. 3. Minnesota Statutes 2024, section 353.34, subdivision 3, is amended to read:
3.8 Subd. 3.Deferred annuity; eligibility; computation.(a) A member who is partially
3.9or 100 percent vested under section 353.01, subdivision 47, when termination of public
3.10service or termination of membership occurs has the option of leaving the member's
3.11accumulated deductions in the fund and being entitled to a deferred retirement annuity
3.12commencing at normal retirement age or to a deferred early retirement annuity under section
3.13353.30, subdivision 1a, 1b, 1c, or 5.
3.14 (b) The deferred annuity must be computed under section 353.29, subdivision 3, on the
3.15basis of the law in effect on the date of termination of public service or termination of
3.16membership, whichever is later, and, if the later of termination of public service or
3.17termination of membership is on or before December 31, 2011, the deferred annuity must
3.18be augmented as provided in paragraphs (c) to (e).
3.19 (c) The deferred annuity of any former member must be augmented from the first day
3.20of the month following the termination of active service, or July 1, 1971, whichever is later,
3.21to the effective date of retirement or, if earlier, December 31, 2018.
3.22 (d) For a person who became a public employee before July 1, 2006, and who has a
3.23termination of public service before January 1, 2012, the deferred annuity must be augmented
3.24at the following rate or rates, compounded annually:
3.25 (1) five percent until January 1, 1981;
3.26 (2) three percent from January 1, 1981, until January 1 of the year following the year in
3.27which the former member attains age 55 or December 31, 2011, whichever is earlier;
3.28 (3) five percent from January 1 of the year following the year in which the former member
3.29attains age 55, or December 31, 2011, whichever is earlier; and
3.30 (4) one percent from January 1, 2012, until December 31, 2018; and
3Sec. 3.
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
4.2after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
4.3annuity must not be augmented after December 1, 2018.
4.4 (e) For a person who became a public employee after June 30, 2006, and who has a
4.5termination of public service before January 1, 2012, the deferred annuity must be augmented
4.6at the following rate or rates, compounded annually:
4.7 (1) 2.5 percent until December 31, 2011; and
4.8 (2) one percent from January 1, 2012, until December 31, 2018; and
4.9 (3) after December 31, 2011, except that for any person who terminates active service
4.10after December 31, 2018, the augmentation rate is zero percent, and the person's deferred
4.11annuity must not be augmented after December 31, 2018.
4.12 (f) For a person who has a termination of public service after December 31, 2011, the
4.13deferred annuity must not be augmented.
4.14 (g) The retirement annuity or disability benefit of, or the survivor benefit payable on
4.15behalf of, a former member who terminated service before July 1, 1997, or the survivor
4.16benefit payable on behalf of a basic or police and fire member who was receiving disability
4.17benefits before July 1, 1997, which is first payable after June 30, 1997, must be increased
4.18on an actuarial equivalent basis to reflect the change in the investment return actuarial
4.19assumption under section 356.215, subdivision 8, from five percent to six percent under a
4.20calculation procedure and tables adopted by the board and approved by the actuary retained
4.21under section 356.214.
4.22 (h) A former member qualified to apply for a deferred retirement annuity may revoke
4.23this option at any time before the commencement of deferred annuity payments by making
4.24application for a refund. The person is entitled to a refund of accumulated member
4.25contributions within 30 days following date of receipt of the application by the executive
4.26director.
4.27 EFFECTIVE DATE.This section is effective the day following final enactment.
4.28 Sec. 4. Minnesota Statutes 2024, section 354.55, subdivision 11, is amended to read:
4.29 Subd. 11.Deferred annuity; augmentation.(a) Any person covered under section
4.30354.44, subdivision 6, who ceases to render teaching service, may leave the person's
4.31accumulated deductions in the fund for the purpose of receiving a deferred annuity at
4.32retirement.
4Sec. 4.
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
5.2first day of the month following the termination of active service to the effective date of
5.3retirement.
5.4 (c) No augmentation is creditable if the deferral period is less than three months or if
5.5deferral commenced before July 1, 1971.
5.6 (d) For persons who became covered employees before July 1, 2006, the annuity must
5.7be augmented at the following rate or rates, compounded annually:
5.8 (1) five percent until January 1, 1981;
5.9 (2) three percent from January 1, 1981, until January 1 of the year following the year in
5.10which the deferred annuitant attains age 55 or June 30, 2012, whichever is earlier;
5.11 (3) five percent from the date established in clause (2) until June 30, 2012; and
5.12 (4) two percent from July 1, 2012, until June 30, 2019; and
5.13 (5) after June 30, 2012, except that for any person who terminates active service after
5.14June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
5.15not be augmented after June 30, 2019.
5.16 (e) For persons who become covered employees after June 30, 2006, the annuity must
5.17be augmented at the following rate or rates, compounded annually:
5.18 (1) 2.5 percent until June 30, 2012; and
5.19 (2) two percent from July 1, 2012, until June 30, 2019; and
5.20 (3) after June 30, 2012, except that for any person who terminates active service after
5.21June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
5.22not be augmented after June 30, 2019.
5.23 (f) In no case may the annuity payable under this subdivision be less than the amount
5.24of annuity payable under section 354.44, subdivision 6.
5.25 (g) The requirements and provisions for retirement before normal retirement age contained
5.26in section 354.44, subdivision 6, also apply to an employee fulfilling the requirements with
5.27a combination of service as provided in section 356.311.
5.28 (h) The augmentation provided by this subdivision applies to the benefit provided in
5.29section 354.46, subdivision 2.
5Sec. 4.
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
6.2a person is on an approved leave of absence from an employer unit covered by the provisions
6.3of this chapter.
6.4 (j) The retirement annuity or disability benefit of, or the survivor benefit payable on
6.5behalf of, a former teacher who terminated service before July 1, 1997, which is not first
6.6payable until after June 30, 1997, must be increased on an actuarial equivalent basis to
6.7reflect the change in the investment return actuarial assumption under section 356.215,
6.8subdivision 8, from five percent to six percent under a calculation procedure and tables
6.9adopted by the board as recommended by an approved actuary and approved by the actuary
6.10retained under section 356.214.
6.11 EFFECTIVE DATE.This section is effective the day following final enactment.
6.12 Sec. 5. Minnesota Statutes 2024, section 354A.37, subdivision 2, is amended to read:
6.13 Subd. 2.Eligibility for deferred retirement annuity.(a) Any coordinated member
6.14who ceases to render teaching services for the school district in which the teachers retirement
6.15fund association is located, with sufficient allowable service credit to meet the minimum
6.16service requirements specified in section 354A.31, subdivision 1, shall be entitled to a
6.17deferred annuity in lieu of a refund under subdivision 1.
6.18 (b) The deferred annuity must be augmented from the first day of the month following
6.19the termination of active service to the effective date of retirement. There is no augmentation
6.20if this period is less than three months.
6.21 (c) The deferred annuity commences upon application after the person on deferred status
6.22attains at least the minimum age specified in section 354A.31, subdivision 1.
6.23 (d) For a person who became a covered employee before July 1, 2006, the annuity must
6.24be augmented at the following rate or rates, compounded annually:
6.25 (1) three percent until January 1 of the year following the year in which the former
6.26member attains age 55 or June 30, 2012, whichever is earlier;
6.27 (2) five percent from the January 1 next following the attainment of age 55 or until June
6.2830, 2012; and
6.29 (3) two percent from July 1, 2012, until June 30, 2019; and
6.30 (4) after June 30, 2012, except that for any person who terminates active service after
6.31June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
6.32not be augmented after June 30, 2019.
6Sec. 5.
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
7.2be augmented at the following rate or rates, compounded annually:
7.3 (1) 2.5 percent until June 30, 2012; and
7.4 (2) two percent from July 1, 2012, until June 30, 2019; and
7.5 (3) after June 30, 2012, except that for any person who terminates active service after
7.6June 30, 2019, the augmentation rate is zero percent, and the person's deferred annuity must
7.7not be augmented after June 30, 2019.
7.8 (f) The augmentation provided by this subdivision applies to the benefit provided in
7.9section 354A.35, subdivision 2. The augmentation provided by this subdivision does not
7.10apply to any period in which a person is on an approved leave of absence from an employer
7.11unit.
7.12 EFFECTIVE DATE.This section is effective the day following final enactment.
7.13 Sec. 6. RETROACTIVE IMPLEMENTATION.
7.14 Subdivision 1.Minnesota State Retirement System.(a) The executive director of the
7.15Minnesota State Retirement System must recalculate the annuity of any former state employee
7.16who started to receive a pension from the general state employees retirement plan, the
7.17correctional state employees retirement plan, or the State Patrol retirement plan on or after
7.18January 1, 2019, and whose monthly pension amount would have been larger had sections
7.191 and 2 been in effect on January 1, 2019.
7.20 (b) For each former state employee, the executive director must adjust the ongoing
7.21annuity amount so that it is the amount calculated under section 1 or 2, as applicable, taking
7.22into account any election of any optional annuity forms of payment and any postretirement
7.23increases.
7.24 (c) The executive director must offer a lump sum distribution to the former state employee
7.25of the difference between the monthly amount determined under section 1 or 2, as applicable,
7.26and the monthly amount being paid to the former state employee, multiplied by the number
7.27of monthly payments made to the former state employee before the annuity calculated under
7.28section 1 or 2, as applicable, begins. The lump sum must be adjusted to take into account
7.29any election of any optional annuity forms of payment and any postretirement increases.
7.30The former state employee may elect a distribution of the lump sum or a direct rollover
7.31under Minnesota Statutes, section 356.633, subdivisions 1 and 2, if the lump sum is an
7.32eligible rollover distribution as defined in Minnesota Statutes, section 356.633, subdivision
7.331, paragraph (d).
7Sec. 6.
25-01064 as introduced12/10/24 REVISOR BD/HL 8.1 Subd. 2.Public Employees Retirement Association.(a) The executive director of the
8.2Public Employees Retirement Association must recalculate the annuity of any former public
8.3employee who started to receive a pension from the general employees retirement plan, the
8.4local government correctional service retirement plan, or the public employees police and
8.5fire plan on or after January 1, 2019, and whose monthly pension amount would have been
8.6larger had section 3 been in effect on January 1, 2019.
8.7 (b) For each former public employee, the executive director must adjust the ongoing
8.8annuity amount so that it is the amount calculated under section 3, taking into account any
8.9election of any optional annuity forms of payment and any postretirement increases.
8.10 (c) The executive director must offer a lump sum distribution to the former public
8.11employee of the difference between the monthly amount determined under section 3 and
8.12the monthly amount being paid to the former public employee, multiplied by the number
8.13of monthly payments made to the former public employee before the annuity calculated
8.14under section 3 begins. The lump sum must be adjusted to take into account any election
8.15of any optional annuity forms of payment and any postretirement increases. The former
8.16public employee may elect a distribution of the lump sum or a direct rollover under Minnesota
8.17Statutes, section 356.633, subdivisions 1 and 2, if the lump sum is an eligible rollover
8.18distribution as defined in Minnesota Statutes, section 356.633, subdivision 1, paragraph (d).
8.19 Subd. 3.Teachers Retirement Association.(a) The executive director of the Teachers
8.20Retirement Association must recalculate the annuity of any former teacher who started to
8.21receive a pension from the Teachers Retirement Association on or after July 1, 2019, and
8.22whose monthly pension amount would have been larger had section 4 been in effect on July
8.231, 2019.
8.24 (b) For each former teacher, the executive director must adjust the ongoing annuity
8.25amount so that it is the amount calculated under section 4, taking into account any election
8.26of any optional annuity forms of payment and any postretirement increases.
8.27 (c) The executive director must offer a lump sum distribution to the former teacher of
8.28the difference between the monthly amount determined under section 4 and the monthly
8.29amount being paid to the former teacher, multiplied by the number of monthly payments
8.30made to the former teacher before the annuity calculated under section 4 begins. The lump
8.31sum must be adjusted to take into account any election of any optional annuity forms of
8.32payment and any postretirement increases. The former teacher may elect a distribution of
8.33the lump sum or a direct rollover under Minnesota Statutes, section 356.633, subdivisions
8Sec. 6.
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,
9.2section 356.633, subdivision 1, paragraph (d).
9.3 Subd. 4.St. Paul Teachers' Retirement Fund Association.(a) The executive director
9.4of the St. Paul Teachers' Retirement Fund Association must recalculate the annuity of any
9.5former teacher who started to receive a pension from the St. Paul Teachers' Retirement Fund
9.6Association on or after July 1, 2019, and whose monthly pension amount would have been
9.7larger had section 5 been in effect on July 1, 2019.
9.8 (b) For each former teacher, the executive director must adjust the ongoing annuity
9.9amount so that it is the amount calculated under section 5, taking into account any election
9.10of any optional annuity forms of payment and any postretirement increases.
9.11 (c) The executive director must offer a lump sum distribution to the former teacher of
9.12the difference between the monthly amount determined under section 5 and the monthly
9.13amount being paid to the former teacher, multiplied by the number of monthly payments
9.14made to the former teacher before the annuity calculated under section 5 begins. The lump
9.15sum must be adjusted to take into account any election of any optional annuity forms of
9.16payment and any postretirement increases. The former teacher may elect a distribution of
9.17the lump sum or a direct rollover under Minnesota Statutes, section 356.633, subdivisions
9.181 and 2, if the lump sum is an eligible rollover distribution as defined in Minnesota Statutes,
9.19section 356.633, subdivision 1, paragraph (d).
9.20 EFFECTIVE DATE.This section is effective the day following final enactment.
9Sec. 6.
25-01064 as introduced12/10/24 REVISOR BD/HL