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.
1.6 	BE 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 
1.9 	retirement annuity must be computed in accordance with the applicable provisions of the 
1.10 	formulas stated in paragraph (b) or (d) on the basis of each member's average salary under 
1.11 	section 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 
1.13 	became a member of the association or a member of a pension fund listed in section 356.30, 
1.14 	subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with paragraph (e), 
1.15 	produces a higher annuity amount, in which case paragraph (d) applies. The average salary 
1.16 	as defined in section 354.05, subdivision 13a, multiplied by the following percentages per 
1.17 	year of formula service credit shall determine the amount of the annuity to which the member 
1.18 	qualifying therefor is entitled for service rendered before July 1, 2006:

1.19		Period
		Coordinated Member
		Basic Member
	
1.20
1.21		Each year of service 
during first ten
		1.2 percent  per year
		2.2 percent  per year
	
1.22
1.23		Each year of service 
thereafter
		1.7 percent  per year
		2.7 percent  per year
	
2.1 	For service rendered on or after July 1, 2006, by a member other than a member who 
2.2 	was a member of the former Duluth Teachers Retirement Fund Association between January 
2.3 	1, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member 
2.4 	who was a member of the former Duluth Teachers Retirement Fund Association between 
2.5 	January 1, 2013, and June 30, 2015, the average salary as defined in section 354.05, 
2.6 	subdivision 13a, multiplied by the following percentages per year of service credit, determines 
2.7 	the amount the annuity to which the member qualifying therefor is entitled:

2.8		Period
		Coordinated Member
		Basic Member
	
2.92.10
		Each year of service 
during first ten
		1.4 percent  per year
		2.2 percent  per year
	
2.11
2.12		Each year of service after 
ten years of service
		1.9 percent  per year
		2.7 percent  per year
	
2.13 	(c)(1) This paragraph applies only to a person who first became a member of the 
2.14 	association or a member of a pension fund listed in section 356.30, subdivision 3, before 
2.15 	July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in conjunction 
2.16 	with 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, 
2.19 	the member shall be paid a retirement annuity in an amount equal to the normal annuity 
2.20 	provided in paragraph (b) reduced by one-quarter of one percent for each month that the 
2.21 	member is under normal retirement age at the time of retirement except that for any member 
2.22 	who has 30 or more years of allowable service credit, the reduction shall be applied only 
2.23 	for 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 
2.25 	entitled, upon application, to a retirement annuity in an amount equal to the normal annuity 
2.26 	provided 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 
2.28 	became a member of the association after June 30, 1989, and to any other member who has 
2.29 	become at least 55 years old and whose annuity amount when calculated under this paragraph 
2.30 	and 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 
2.33 	13a, multiplied by 2.7 percent for each year of service for a basic member determines the 
2.34 	amount of the retirement annuity to which the basic member is entitled. The annuity of a 
2.35 	basic member who was a member of the former Minneapolis Teachers Retirement Fund 
3.1 	Association as of June 30, 2006, must be determined according to the annuity formula under 
3.2 	the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association 
3.3 	in effect as of that date.
3.4 	(2) For a coordinated member, the average salary, as defined in section 354.05, 
3.5 	subdivision 13a, multiplied by 1.7 percent for each year of service rendered before July 1, 
3.6 	2006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a 
3.7 	member other than a member who was a member of the former Duluth Teachers Retirement 
3.8 	Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each 
3.9 	year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers 
3.10 	Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the 
3.11 	amount 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 
3.13 	becomes a member of the association after June 30, 1989, and to any other member who 
3.14 	has become at least 55 years old and whose annuity is higher when calculated under 
3.15 	paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b) 
3.16 	in conjunction with paragraph (c). An employee who retires under the formula annuity 
3.17 	before the normal retirement age is entitled to receive the normal an annuity provided in 
3.18 	paragraph (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 
3.20 	annuity shall be is the normal annuity provided in paragraph (d) reduced by an early reduction 
3.21 	factor of six percent for each year that the member's age of retirement precedes the normal 
3.22 	retirement age. The resulting reduced annuity shall be further adjusted to take into account 
3.23 	the increase in the monthly amount that would have occurred had the member retired early 
3.24 	and deferred receipt of the annuity until normal retirement age and the annuity was augmented 
3.25 	during the deferral period at 2.5 percent, if the member commenced employment after June 
3.26 	30, 2006, or at three percent, if the member commenced employment before July 1, 2006, 
3.27 	compounded annually.
3.28 	(2) For a member who has not attained age 62 60 or has fewer than 30 years of service, 
3.29 	the annuity shall be is the normal annuity provided in paragraph (d) reduced for each year 
3.30 	that the member's age of retirement precedes normal retirement age by the following early 
3.31 	reduction factors:
3.32 	(i) for the period during which the member is age 55 through age 58, the factor is four 
3.33 	percent; and
4.1 	(ii) for the period during which the member is at least age 59 but not yet normal retirement 
4.2 	age, the factor is seven percent.
4.3 	The resulting annuity shall be further adjusted to take into account the increase in the 
4.4 	monthly amount that would have occurred had the member retired early and deferred receipt 
4.5 	of the annuity until normal retirement age and the annuity was augmented during the deferral 
4.6 	period at the applicable annual rate, compounded annually. The applicable annual rate is 
4.7 	the rate in effect for the month that includes the member's effective date of retirement and 
4.8 	shall must be considered as fixed for the member for the period until the member reaches 
4.9 	normal retirement age. The applicable annual rate for June 2019 is 2.5 percent, if the member 
4.10 	commenced employment after June 30, 2006, or three percent, if the member commenced 
4.11 	employment before July 1, 2006, compounded annually, and decreases each month beginning 
4.12 	July 2019 in equal monthly increments over the five-year period that begins July 1, 2019, 
4.13 	and 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 
4.15 	under 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 
4.17 	percent of the governor's salary unless and until the salary figures used in computing the 
4.18 	highest five successive years average salary under paragraph (a) have been audited by the 
4.19 	Teachers Retirement Association and determined by the executive director to comply with 
4.20 	the 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
4.24 	annual postretirement adjustments. (a) Except as set forth in paragraph (d), recipients of 
4.25 	a retirement annuity, disability benefit, or survivor benefit from the Teachers Retirement 
4.26 	Association are entitled to an annual postretirement adjustment, effective as of each January 
4.27 	1, as follows:
4.28 	(1) effective January 1, 2019, through December 31, 2023, a postretirement increase of 
4.29 	one percent must be applied each year to the amount of the monthly annuity or benefit of 
4.30 	each annuitant or benefit recipient who has been receiving an annuity or a benefit for at 
4.31 	least 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 
4.33 	recipient who has been receiving an annuity or a benefit for at least one full month, but less 
5.1 	than 12 full months as of the June 30 of the calendar year immediately before the adjustment, 
5.2 	a postretirement increase of 1/12 of one percent for each month the person has been receiving 
5.3 	an annuity or benefit must be applied to the amount of the monthly annuity or benefit of 
5.4 	the annuitant or benefit recipient;
5.5 	(3) effective January 1, 2024, and thereafter, (1) a postretirement increase must be applied 
5.6 	each year to the amount of the monthly annuity or benefit of each annuitant or benefit 
5.7 	recipient who has been receiving an annuity or a benefit for at least 12 full months as of the 
5.8 	June 30 of the calendar year immediately before the adjustment, at the following rates:

5.9		from January 1, 2024, through December 31, 2024
	1.1 percent
	
5.10		from January 1, 2025, through December 31, 2025
	1.2 percent
	
5.11		from January 1, 2026, through December 31, 2026
	1.3 percent
	
5.12		from January 1, 2027, through December 31, 2027
	1.4 percent
	
5.13		from January 1, 2028, and thereafter
	1.5 percent
	
5.14 	(4) effective January 1, 2024, and thereafter, (2) for each annuitant or benefit recipient 
5.15 	who has been receiving an annuity or a benefit for at least one full month, but less than 12 
5.16 	full months, as of the June 30 of the calendar year immediately before the adjustment, an 
5.17 	annual postretirement increase of 1/12 of the applicable percentage for each month that the 
5.18 	person has been receiving an annuity or benefit must be applied to the amount of the monthly 
5.19 	annuity or benefit of the annuitant or benefit recipient. The applicable percentages are the 
5.20 	following:

5.21		from January 1, 2024, through December 31, 2024
	1.1 percent
	
5.22		from January 1, 2025, through December 31, 2025
	1.2 percent
	
5.23		from January 1, 2026, through December 31, 2026
	1.3 percent
	
5.24		from January 1, 2027, through December 31, 2027
	1.4 percent
	
5.25		from January 1, 2028, and thereafter
	1.5 percent
	
5.26 	(b) An increase in annuity or benefit payments under this section must be made 
5.27 	automatically unless written notice is filed by the annuitant or benefit recipient with the 
5.28 	executive director of the Teachers Retirement Association requesting that the increase not 
5.29 	be made.
5.30 	(c) The retirement annuity payable to a person who retires before becoming eligible for 
5.31 	Social Security benefits and who has elected the optional payment as provided in section 
5.32 	354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement 
5.33 	annuity for the purposes of any postretirement adjustment. The period-certain retirement 
5.34 	annuity plus the life retirement annuity must be the annuity amount payable until age 62, 
6.1 	65, or normal retirement age, as selected by the member at retirement, for an annuity amount 
6.2 	payable under section 354.35. A postretirement adjustment granted on the period-certain 
6.3 	retirement 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 
6.5 	adjustment of the member's retirement annuity, effective as of each January 1, beginning 
6.6 	with the year following the year in which the member attains normal retirement age, as 
6.7 	follows:
6.8 	(1) if a member has been receiving an annuity for at least 12 full months as of the June 
6.9 	30 of the calendar year immediately before the date of the adjustment, a postretirement 
6.10 	increase equal to the percentage specified in paragraph (a), clause (3), must be applied, 
6.11 	effective 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 
6.13 	12 full months as of the June 30 of the calendar year immediately before the date of 
6.14 	adjustment, a postretirement increase of 1/12 of the applicable percentage specified in 
6.15 	paragraph (a), clause (4), for each month that the member has been receiving an annuity 
6.16 	must be applied, effective on January 1, to the amount of the member's monthly annuity; 
6.17 	or
6.18 	(3) if a member has been receiving an annuity for fewer than seven months as of the 
6.19 	January 1 of the year following the year in which the member attains normal retirement 
6.20 	age, a postretirement adjustment shall be applied effective as of the next January 1. The 
6.21 	amount 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 
6.23 	6, 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 
6.25 	service 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.