The Senate unanimously passed an omnibus retirement bill off the Senate floor this week. The bill’s provisions were agreed upon by the Legislative Commission on Pensions and Retirement (LCPR) over the past few months and provide necessary changes to statutes governing pension plans in Minnesota.
Notable provisions include temporarily lifting the earnings limitation on retired but returning teachers to address the current teacher shortage and expanding eligibility for military service members to purchase service credit during periods of military service.
Unfortunately, the bill does not include cost-of-living-adjustments (COLAs) for retirees experiencing the loss of purchasing power due to record high inflation levels. The Social Security Administration approved a 5.9% COLA for Social Security recipients beginning in January of this year, but state employee retirement plans have not been authorized or compensated by the legislature to provide any pension increases.
The Teachers Retirement Association and Minnesota State Retirement System General Plan currently provide a 1% COLA while the Public Employee Retirement Association provides a 1.5% COLA. In the US, inflation for the 12-month period ending in April is 8.3%, far higher than any COLA provided to Minnesota’s retirees, hurting their ability to buy essential goods and services on a fixed income.
Addressing the negative effects of inflation on retiree benefits must be a legislative priority before the 2022 session comes to a close in less than two weeks. (SF 3540)
