Prior Legislation
Prior Years
Here is a summary of Minnesota legislation impacting PERA membership from the last three years.
2024
Defined Contribution Plan (DCP)
Effective August 1, 2024, all individuals newly hired or elected to a position eligible for DCP participation must make a one-time irrevocable election within 30 days of hire. All provisions permitting individuals to make an election more than 30 days after hire or to revoke an election to participate are removed. Individuals who were hired or took office between February 1, 2024 and July 31, 2024 will have an opportunity to make a one-time irrevocable election during the month of October 2024. More information will be shared with employers and impacted members throughout the summer and early fall.
Correctional Plan Multiplier and Contribution Rates
The Correctional plan multiplier increases from 1.9% to 2.2% for any service credit earned July 1, 2025 or later. Contribution rates also increase July 1, 2025 forward:
- Members: 6.83%
- Employers: 10.25%
Coordinated and Correctional Workers’ Compensation Offsets
As of January 1, 2025, Coordinated and Correctional disability benefits will no longer be reduced by workers’ compensation.
Police & Fire Plan Firefighter Definition
The Bill updates the definition of firefighter for the purposes of plan membership to include certain employees that work in fire service that are exposed to the hazards of firefighting.
Statewide Volunteer Firefighter Plan
The Bill modifies the structure of 353G, updates definitions, changes administrative requirements, and establishes a defined contribution plan.
Other Administrative Changes
The Bill updates language to ensure consistency in qualification requirements and compensation across fund executive directors. The Bill also modifies provisions in Minnesota Statutes Chapter 356 relating to amortization, correction of errors, and federal compliance.
2023
Plan Assumptions
PERA’s assumed investment return changed from 7.5% to 7.0% effective June 30, 2023. This is the rate at which PERA assumes we will see a return on the investments made by the State Board of Investment on PERA’s behalf. Interest charged by PERA on omitted deductions, delinquent invoices, purchases of service or salary credit, and repayments of refund will be lowered to 7.0% after June 30. Interest accrued prior to that date would remain at 7.5%.
Membership Eligibility
The defined benefit annual earnings requirement for local government and school employees of $5,100 and $3,800, respectively, is now replaced with a monthly threshold of $425. Current members who qualified for membership under the previous rules are not affected and will retain their membership until termination.
Vesting
For Coordinated members, three-year vesting now applies to active public employees. Five-year vesting still applies to members first hired on or after July 1, 2010, and who terminated before June 30, 2023. For Police & Fire members, five to 10-year graded vesting now applies to those who became a member on or after July 1, 2010, and have not taken a refund or started a benefit. The previous 10 to 20- year graded vesting was removed from statutes. There are no vesting changes for Correctional members.
One-time Payment
Coordinated, Basic, and Police & Fire benefit recipients who have received retirement, survivor, or disability benefits for at least 12 full months as of June 30, 2023, are eligible for a one-time payment. The amounts will be based off the 2024 annual increase and your gross benefit. We are unable to determine your one-time payment until March 2024. For Coordinated members, the amount will be the difference between the actual 2024 increase and 2.5%. For Basic and Police & Fire members, it is the difference between the actual 2024 increase and 4.0% as these members are not eligible for Social Security (exception: if a Police & Fire recipient has not received an annual increase on their benefit as of Jan. 2024, the one-time amount will be based on 3.0%). You will receive this extra payment by March 31, 2024. This one-time payment is non-compounding toward the overall benefit.
Annual Increase
For Coordinated, Basic, and MERF members who start early retirement benefits January 1, 2024 or later, the delayed annual increase provision was removed from statute. These members will now follow the standard increase schedule based on their benefit effective date. For Correctional members, the trigger provision was corrected to move back to the 2.5% increase cap after meeting certain criteria if it ever dropped to 1.5%.
Death Benefits
Dependent child benefits for all defined benefit plans now have a benefit duration to age 23. This provision generally applies when a member’s death occurs before starting a PERA benefit. The Police & Fire full-time student requirement between ages 18 to 23 was removed from statute.
Member Purchases
Members who terminate employment or start a disability benefit before paying a leave of absence will now have the same period of time to make the purchase as active members, which is one year after the end of each reporting period. Members who are applying for a disability benefit are now eligible to purchase all leave types. Accrued interest on member purchases (repaying a refund, leave of absence, etc.) will be 7.0%, July 1, 2023, forward.
Defined Contribution Plan
Beginning May 20, 2023, appointed public officials (such as city or township clerks, treasurers, or auditors) who had previously been excluded from the DCP because their position was not elected, are now eligible to participate if their salary remains below the threshold for mandatory Coordinated Plan membership.
Police & Fire Duty Disability
The duty total and permanent disability benefit formula is now 99% of average salary. Members with a psychological condition must complete a treatment requirement before applying for a duty disability benefit. Earnings offsets were modified for disability recipients who have reemployment earnings. As of January 1, 2024, workers’ compensation will no longer offset disability benefits.
Disability Reapplication Process
While this is not a new process, the current administrative procedures for the disability reapplication process were clarified in law. The legislation clarified that disability recipients reapply and provide evidence of continued disability once a year for the first five years and every three years thereafter. The legislation also clarified that if our medical consultant states in writing that no improvement can be expected with the disabling condition that the benefit was based on, then the reapplication process may be waived.
MN State Taxes
The tax withholding form will change beginning January 1, 2024, and allow withholding elections based on a percentage of your gross benefit.
2022
Statewide Volunteer Firefighters (SVF)
New entities joining the SVF Plan can now choose from one of three vesting schedules. The alternative benefit calculation has been eliminated for departments in SVF less than five years.
Deferred Segments
The 2018 Omnibus Retirement Bill eliminated the deferred segments alternative calculation. With the reinstatement, if a member ended service prior to January 1, 2012, and returned to PERA-covered service after a two-year break, they may be entitled to augmentation on their benefit calculation.
Police Study
The study is required to consider workers’ compensation, disability, and pension benefits and the adequacy of these benefits for Minnesota police officers. The study will be conducted by Department of Labor with PERA participation and be completed by January 15, 2023.
APRN
Advanced Practice Registered Nurses (APRNs) are now able to sign medical reports for all statewide plans’ disability process. APRNs are defined as a clinical nurse specialist, nurse anesthetist, nurse-midwife, or a nurse practitioner, practicing within the scope of their professional licensure.
Phased Retirement Option (PRO) for Health Care Workers
Earlier in the session, a separate bill was signed into law on March 4, 2022, that pertains to certain health care workers who participate in a PRO agreement. These individuals continue to be exempt from regular PRO limitations on hours or percentage of time worked until December 31, 2023.