1.1 A bill for an act
1.2 relating to retirement; Teachers Retirement Association; lowering the age from
1.3 62 to 60 for the enhanced early retirement reduction; clarifying the postretirement
1.4 adjustment delay; amending Minnesota Statutes 2024, sections 354.44, subdivision
1.5 6; 356.415, subdivision 1d.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 354.44, subdivision 6, is amended to read:
1.8 Subd. 6.Computation of formula program retirement annuity.(a) The formula
1.9retirement annuity must be computed in accordance with the applicable provisions of the
1.10formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
1.11section 354.05, subdivision 13a, for the period of the member's formula service credit.
1.12 (b) This paragraph, in conjunction with paragraph (c), applies to a person who first
1.13became a member of the association or a member of a pension fund listed in section 356.30,
1.14subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with paragraph (e),
1.15produces a higher annuity amount, in which case paragraph (d) applies. The average salary
1.16as defined in section 354.05, subdivision 13a, multiplied by the following percentages per
1.17year of formula service credit shall determine the amount of the annuity to which the member
1.18qualifying therefor is entitled for service rendered before July 1, 2006:
Basic MemberCoordinated Member1.19 Period
2.2 percent per year1.2 percent per year1.20 Each year of service
1.21 during first ten
2.7 percent per year1.7 percent per year1.22 Each year of service
1.23 thereafter
1Section 1.
25-03916 as introduced03/05/25 REVISOR VH/MI
SENATE
STATE OF MINNESOTA
S.F. No. 2992NINETY-FOURTH SESSION
(SENATE AUTHORS: PRATT, Nelson, Coleman and Kreun)
OFFICIAL STATUSD-PGDATE
Introduction and first reading03/27/2025
Referred to State and Local Government 2.1 For service rendered on or after July 1, 2006, by a member other than a member who
2.2was a member of the former Duluth Teachers Retirement Fund Association between January
2.31, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member
2.4who was a member of the former Duluth Teachers Retirement Fund Association between
2.5January 1, 2013, and June 30, 2015, the average salary as defined in section 354.05,
2.6subdivision 13a, multiplied by the following percentages per year of service credit, determines
2.7the amount the annuity to which the member qualifying therefor is entitled:
Basic MemberCoordinated Member2.8 Period
2.2 percent per year1.4 percent per year2.9 Each year of service
2.10 during first ten
2.7 percent per year1.9 percent per year2.11 Each year of service after
2.12 ten years of service
2.13 (c)(1) This paragraph applies only to a person who first became a member of the
2.14association or a member of a pension fund listed in section 356.30, subdivision 3, before
2.15July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in conjunction
2.16with this paragraph than when calculated under paragraph (d), in conjunction with paragraph
2.17(e).
2.18 (2) Where any member retires prior to normal retirement age under a formula annuity,
2.19the member shall be paid a retirement annuity in an amount equal to the normal annuity
2.20provided in paragraph (b) reduced by one-quarter of one percent for each month that the
2.21member is under normal retirement age at the time of retirement except that for any member
2.22who has 30 or more years of allowable service credit, the reduction shall be applied only
2.23for each month that the member is under age 62.
2.24 (3) Any member whose attained age plus credited allowable service totals 90 years is
2.25entitled, upon application, to a retirement annuity in an amount equal to the normal annuity
2.26provided in paragraph (b), without any reduction by reason of early retirement.
2.27 (d) This paragraph applies to a member who has become at least 55 years old and first
2.28became a member of the association after June 30, 1989, and to any other member who has
2.29become at least 55 years old and whose annuity amount when calculated under this paragraph
2.30and in conjunction with paragraph (e), is higher than it is when calculated under paragraph
2.31(b), in conjunction with paragraph (c).
2.32 (1) For a basic member, the average salary, as defined in section 354.05, subdivision
2.3313a, multiplied by 2.7 percent for each year of service for a basic member determines the
2.34amount of the retirement annuity to which the basic member is entitled. The annuity of a
2.35basic member who was a member of the former Minneapolis Teachers Retirement Fund
2Section 1.
25-03916 as introduced03/05/25 REVISOR VH/MI 3.1Association as of June 30, 2006, must be determined according to the annuity formula under
3.2the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association
3.3in effect as of that date.
3.4 (2) For a coordinated member, the average salary, as defined in section 354.05,
3.5subdivision 13a, multiplied by 1.7 percent for each year of service rendered before July 1,
3.62006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a
3.7member other than a member who was a member of the former Duluth Teachers Retirement
3.8Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each
3.9year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers
3.10Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the
3.11amount of the retirement annuity to which the coordinated member is entitled.
3.12 (e) This paragraph applies to a person who has become at least 55 years old and first
3.13becomes a member of the association after June 30, 1989, and to any other member who
3.14has become at least 55 years old and whose annuity is higher when calculated under
3.15paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b)
3.16in conjunction with paragraph (c). An employee who retires under the formula annuity
3.17before the normal retirement age is entitled to receive the normal an annuity provided in
3.18paragraph (d), reduced as described in under clause (1) or (2), as applicable.
3.19 (1) For a member who is at least age 62 60 and has at least 30 years of service, the
3.20annuity shall be is the normal annuity provided in paragraph (d) reduced by an early reduction
3.21factor of six percent for each year that the member's age of retirement precedes the normal
3.22retirement age. The resulting reduced annuity shall be further adjusted to take into account
3.23the increase in the monthly amount that would have occurred had the member retired early
3.24and deferred receipt of the annuity until normal retirement age and the annuity was augmented
3.25during the deferral period at 2.5 percent, if the member commenced employment after June
3.2630, 2006, or at three percent, if the member commenced employment before July 1, 2006,
3.27compounded annually.
3.28 (2) For a member who has not attained age 62 60 or has fewer than 30 years of service,
3.29the annuity shall be is the normal annuity provided in paragraph (d) reduced for each year
3.30that the member's age of retirement precedes normal retirement age by the following early
3.31reduction factors:
3.32 (i) for the period during which the member is age 55 through age 58, the factor is four
3.33percent; and
3Section 1.
25-03916 as introduced03/05/25 REVISOR VH/MI 4.1 (ii) for the period during which the member is at least age 59 but not yet normal retirement
4.2age, the factor is seven percent.
4.3 The resulting annuity shall be further adjusted to take into account the increase in the
4.4monthly amount that would have occurred had the member retired early and deferred receipt
4.5of the annuity until normal retirement age and the annuity was augmented during the deferral
4.6period at the applicable annual rate, compounded annually. The applicable annual rate is
4.7the rate in effect for the month that includes the member's effective date of retirement and
4.8shall must be considered as fixed for the member for the period until the member reaches
4.9normal retirement age. The applicable annual rate for June 2019 is 2.5 percent, if the member
4.10commenced employment after June 30, 2006, or three percent, if the member commenced
4.11employment before July 1, 2006, compounded annually, and decreases each month beginning
4.12July 2019 in equal monthly increments over the five-year period that begins July 1, 2019,
4.13and ends June 30, 2024, to zero percent effective for July 2024 and thereafter.
4.14 After June 30, 2024, the reduced annuity commencing before normal retirement age
4.15under this clause shall not take into account any augmentation.
4.16 (f) No retirement annuity is payable to a former employee with a salary that exceeds 95
4.17percent of the governor's salary unless and until the salary figures used in computing the
4.18highest five successive years average salary under paragraph (a) have been audited by the
4.19Teachers Retirement Association and determined by the executive director to comply with
4.20the requirements and limitations of section 354.05, subdivisions 35 and 35a.
4.21 EFFECTIVE DATE.This section is effective July 1, 2025.
4.22 Sec. 2. Minnesota Statutes 2024, section 356.415, subdivision 1d, is amended to read:
4.23 Subd. 1d.Annual postretirement adjustments; Teachers Retirement Association
4.24annual postretirement adjustments.(a) Except as set forth in paragraph (d), recipients of
4.25a retirement annuity, disability benefit, or survivor benefit from the Teachers Retirement
4.26Association are entitled to an annual postretirement adjustment, effective as of each January
4.271, as follows:
4.28 (1) effective January 1, 2019, through December 31, 2023, a postretirement increase of
4.29one percent must be applied each year to the amount of the monthly annuity or benefit of
4.30each annuitant or benefit recipient who has been receiving an annuity or a benefit for at
4.31least 12 full months as of the June 30 of the calendar year immediately before the adjustment;
4.32 (2) effective January 1, 2019, through December 31, 2023, for each annuitant or benefit
4.33recipient who has been receiving an annuity or a benefit for at least one full month, but less
4Sec. 2.
25-03916 as introduced03/05/25 REVISOR VH/MI 5.1than 12 full months as of the June 30 of the calendar year immediately before the adjustment,
5.2a postretirement increase of 1/12 of one percent for each month the person has been receiving
5.3an annuity or benefit must be applied to the amount of the monthly annuity or benefit of
5.4the annuitant or benefit recipient;
5.5 (3) effective January 1, 2024, and thereafter, (1) a postretirement increase must be applied
5.6each year to the amount of the monthly annuity or benefit of each annuitant or benefit
5.7recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
5.8June 30 of the calendar year immediately before the adjustment, at the following rates:
1.1 percent5.9 from January 1, 2024, through December 31, 2024
1.2 percent5.10 from January 1, 2025, through December 31, 2025
1.3 percent5.11 from January 1, 2026, through December 31, 2026
1.4 percent5.12 from January 1, 2027, through December 31, 2027
1.5 percent5.13 from January 1, 2028, and thereafter
5.14 (4) effective January 1, 2024, and thereafter, (2) for each annuitant or benefit recipient
5.15who has been receiving an annuity or a benefit for at least one full month, but less than 12
5.16full months, as of the June 30 of the calendar year immediately before the adjustment, an
5.17annual postretirement increase of 1/12 of the applicable percentage for each month that the
5.18person has been receiving an annuity or benefit must be applied to the amount of the monthly
5.19annuity or benefit of the annuitant or benefit recipient. The applicable percentages are the
5.20following:
1.1 percent5.21 from January 1, 2024, through December 31, 2024
1.2 percent5.22 from January 1, 2025, through December 31, 2025
1.3 percent5.23 from January 1, 2026, through December 31, 2026
1.4 percent5.24 from January 1, 2027, through December 31, 2027
1.5 percent5.25 from January 1, 2028, and thereafter
5.26 (b) An increase in annuity or benefit payments under this section must be made
5.27automatically unless written notice is filed by the annuitant or benefit recipient with the
5.28executive director of the Teachers Retirement Association requesting that the increase not
5.29be made.
5.30 (c) The retirement annuity payable to a person who retires before becoming eligible for
5.31Social Security benefits and who has elected the optional payment as provided in section
5.32354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement
5.33annuity for the purposes of any postretirement adjustment. The period-certain retirement
5.34annuity plus the life retirement annuity must be the annuity amount payable until age 62,
5Sec. 2.
25-03916 as introduced03/05/25 REVISOR VH/MI 6.165, or normal retirement age, as selected by the member at retirement, for an annuity amount
6.2payable under section 354.35. A postretirement adjustment granted on the period-certain
6.3retirement annuity must terminate when the period-certain retirement annuity terminates.
6.4 (d) Members who retire on or after July 1, 2024, are entitled to an annual postretirement
6.5adjustment of the member's retirement annuity, effective as of each January 1, beginning
6.6with the year following the year in which the member attains normal retirement age, as
6.7follows:
6.8 (1) if a member has been receiving an annuity for at least 12 full months as of the June
6.930 of the calendar year immediately before the date of the adjustment, a postretirement
6.10increase equal to the percentage specified in paragraph (a), clause (3), must be applied,
6.11effective on January 1, to the amount of the member's monthly annuity;
6.12 (2) if a member has been receiving an annuity for at least one full month, but less than
6.1312 full months as of the June 30 of the calendar year immediately before the date of
6.14adjustment, a postretirement increase of 1/12 of the applicable percentage specified in
6.15paragraph (a), clause (4), for each month that the member has been receiving an annuity
6.16must be applied, effective on January 1, to the amount of the member's monthly annuity;
6.17or
6.18 (3) if a member has been receiving an annuity for fewer than seven months as of the
6.19January 1 of the year following the year in which the member attains normal retirement
6.20age, a postretirement adjustment shall be applied effective as of the next January 1. The
6.21amount of the adjustment shall be determined under clause (2).
6.22 (e) Paragraph (d) does not apply to members who retire under section 354.44, subdivision
6.236, paragraph (c), clause (3), or who retire under section 354.44, subdivision 6, paragraph
6.24(c), clause (2), (d), or (e), when the member is at least age 62 and has at least 30 years of
6.25service under section 354.44, subdivision 6, paragraph (c), (d), (e), or (f), as applicable.
6.26 EFFECTIVE DATE.This section is effective the day following final enactment.
6Sec. 2.
25-03916 as introduced03/05/25 REVISOR VH/MI