Pensions

The 2026 omnibus pension and retirement bill provides $15.4 million to lower St. Paul teacher contributions from 9% to 8% of pay ($3.4 million ongoing), removes the one-year delay for PERA Police & Fire members to receive cost-of-living-adjustments ($8 million ongoing), creates probation officer and 911 telecommunicator subplans within the PERA and MSRS ($368k ongoing), provides subplan-eligible employees a temporary buydown of contributions to 8% of pay for approximately 19 months ($3 million one-time), and includes numerous policy changes to all of the major public pension plans (HF 4074). These changes will benefit state employees across the state and show the DFL’s commitment to improving pensions for public employees.

St. Paul Teacher Pensions  

$3.4 million is provided to the St. Paul Teachers Retirement Fund Association to reduce teacher pension contribution rates from 9% of pay to 8% of pay. St. Paul teacher contribution rates were increased in the 2023 omnibus pension bill from 7.75% to 9% to offset benefit changes. Additionally, St. Paul teachers did not receive a portion of the $19 million pension target in 2025. This provision will provide additional pension parity by equalizing the employee contribution rates between Teachers Retirement Association teachers and St. Paul teachers. This will allow St. Paul teachers to retain more take-home pay and put their pension plan more in line with the statewide plan. (SF4860)

PERA Police and Fire COLA Delay

The Public Employee Retirement Association Police and Fire Plan (PERA P&F) provides pensions to public safety officers, but retirees must wait 24 months before receiving a cost-of-living increase once they leave service. $8 million in ongoing funding is appropriated in the omnibus pension bill to reduce the PERA P&F COLA waiting period from 24 months to 12 months, which is standard among pension plans and provides equity relative to public employee COLA delays. (SF1122)  

Probation Officers and 911 Telecommunicators Subplan Creation

The omnibus pension bill creates two new public safety pension plans, the PERA and MSRS Probation and 911 Telecommunicator Subplans, within local units of government, the Department of Corrections, the Department of Public Safety, and the Metropolitan Council. This proposal is based on the recommendations of the probation officers and 911 telecommunicators pension plans work group. The normal retirement age of the new subplans is 60 years of age and the vesting period must be not less than three years of allowable service credit. $3 million in one-time funds are appropriated to temporarily lower employee contributions to 8% of pay for approximately 19 months. This funding is split between the subplans on a pro rata basis; $2.6 million to PERA and $390k to MSRS. (SF5097)

Duty Disability Working Group

The omnibus pension bill creates a working group to analyze the current policy of limiting PERA P&F partial duty disability recipients to five years of health insurance coverage paid by their employer. Due to the rising costs on local governments and state pension plans due to public safety related duty disability claims, in particular for PTSD, employer-paid health insurance coverage was limited to five years last session for duty disability applicants who are not total and permanent, who continue to be eligible for health insurance coverage until age 65. A public safety benefit account was provided $100 million in 2023 to reimburse local governments for the costs of duty disability health insurance costs, but these funds are being depleted at a rapid rate. This working group will determine next steps to manage costs to local governments while continuing to provide duty disability benefits to public safety employees. (SF4464)

 EMS Pension Plan Work Group

Emergency medical service providers and firefighters have a significant amount of job overlap and are subject to the same work hazards and difficult situations during emergency calls. Due to these commonalities, there was a proposal this session to include EMS professionals in fire relief associations and the PERA Statewide Volunteer Firefighter Plan to receive a defined benefit pension. A working group was established to analyze including emergency medical providers in fire relief associations. The working group will report its findings to the LCPR next session. (SF4766)