State Pension Budget Bill Heading to Governor

ST. PAUL (WJON News) -- The Minnesota House of Representatives passed a Pensions Budget bill, on a vote of 133-1.

The legislation, authored by DFLer Rep. Leon Lillie of North St. Paul and GOPer Rep. Tim O’Driscoll of Sartell, splits an $160 million global budget target between state aid pension improvements for the Teachers Retirement Association, the Police and Fire Plan, and the State Patrol Retirement Fund.

In a statement released by the Minnesota Teachers Association, the union representing the state's teachers,  they said the during the discussion of the proposal on Friday, the TRA staff said the plan would have 97% parity with the Rule of 90 for people at age 60 and would be a higher benefit than the Rule of 90 for anyone retiring at 61 or older.

Minnesota teachers hired after July 1, 1989, were eligible for a “Tier 2” pension, which was significantly inferior to the pensions offered to teachers hired before them. Those teachers hired before July 1, 1989, could retire when their age plus years of service equaled 90 or more, or the Rule of 90.

The bill improves the Teachers Retirement Association pension plan by lowering the age at which a member becomes eligible for the enhanced early retirement reduction from 62 to 60 and lowering the associated benefit reduction percentage from 6% to 5%.

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The PERA Police and Fire Plan will receive $17.7 million in each Fiscal Years 2026-29 to pay for a one-year reduction in the period before a retiree may begin to claim Cost of Living Adjustments (COLA).

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