HF 3449

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/19/2026 03:23 p.m.

A bill for an act
relating to retirement; Minnesota State Retirement System; permitting legislators
to elect coverage by the general state employees retirement plan; amending
Minnesota Statutes 2024, sections 352.01, subdivision 2a; 352D.02, subdivisions
1, 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 352.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) "State employee" includes:

(1) employees of the Minnesota Historical Society;

(2) employees of the State Horticultural Society;

(3) employees of the Minnesota Crop Improvement Association;

(4) employees of the adjutant general whose salaries are paid from federal funds and
who are not covered by any federal civilian employees retirement system;

(5) employees of the Minnesota State Colleges and Universities who are employed under
the university or college activities program;

(6) currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently contributing
employee employed for any special service as defined in subdivision 2b, clause (6);

(7) employees of the legislature who are appointed without a limit on the duration of
their employment;

(8) trainees who are employed on a full-time established training program performing
the duties of the classified position for which they will be eligible to receive immediate
appointment at the completion of the training period;

(9) employees of the Minnesota Safety Council;

(10) any employees who are on authorized leave of absence from the Transit Operating
Division of the former Metropolitan Transit Commission and who are employed by the
labor organization which is the exclusive bargaining agent representing employees of the
Transit Operating Division;

(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito Control
Commission unless excluded under subdivision 2b or are covered by another public pension
fund or plan under section 473.415, subdivision 3;

(12) judges of the Tax Court;

(13) personnel who were employed on June 30, 1992, by the University of Minnesota
in the management, operation, or maintenance of its heating plant facilities, whose
employment transfers to an employer assuming operation of the heating plant facilities, so
long as the person is employed at the University of Minnesota heating plant by that employer
or by its successor organization;

(14) personnel who are employed as seasonal employees in the classified or unclassified
service;

(15) persons who are employed by the Department of Commerce as a peace officer in
the Commerce Fraud Bureau under section 45.0135 who have attained the mandatory
retirement age specified in section 43A.34, subdivision 4;

(16) employees of the University of Minnesota unless excluded under subdivision 2b,
clause (3);

(17) employees of the Middle Management Association whose employment began after
July 1, 2007, and to whom section 352.029 does not apply;

(18) employees of the Minnesota Government Engineers Council to whom section
352.029 does not apply;

(19) employees of the Minnesota Sports Facilities Authority;

(20) employees of the Minnesota Association of Professional Employees;

(21) employees of the Minnesota State Retirement System;

(22) employees of the State Agricultural Society;

(23) employees of the Gillette Children's Hospital Board who were employed in the
state unclassified service at the former Gillette Children's Hospital on March 28, 1974;

(24) if approved for coverage by the Board of Directors of Conservation Corps Minnesota,
employees of Conservation Corps Minnesota so employed on June 30, 2003; deleted text begin and
deleted text end

(25) employees of the Perpich Center for Arts Education who are covered by the general
state employees retirement plan of the Minnesota State Retirement System as of July 1,
2016 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (26) members of the legislature who elect under section 352D.02, subdivision 3, to be
covered by the general state employees retirement plan.
new text end

(b) Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the
amounts required by section 352.04. Employee contributions must be deducted from salary.
Employer contributions are the sole obligation of the employer assuming operation of the
University of Minnesota heating plant facilities or any successor organizations to that
employer.

Sec. 2.

Minnesota Statutes 2024, section 352D.02, subdivision 1, is amended to read:

Subdivision 1.

Coverage.

(a) Employees enumerated in paragraph (c), clauses (2), (3),
(4), (6) to (14), and (16) to (18), if they are in the unclassified service of the state or
Metropolitan Council and are eligible for coverage under the general state employees
retirement plan under chapter 352, are participants in the unclassified program under this
chapter.

(b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
program under this chapter unless the person was eligible to elect different coverage under
section 3A.07 and elected retirement coverage by the applicable alternative retirement plan new text begin
or elected general state employees retirement plan coverage under subdivision 3 new text end . Persons
referenced in paragraph (c), clause (15), are participants in the unclassified program under
this chapter for judicial employment in excess of the service credit limit in section 490.121,
subdivision 22.

(c) Enumerated employees and referenced persons are:

(1) the governor, the lieutenant governor, the secretary of state, the state auditor, and
the attorney general;

(2) an employee in the Office of the Governor, Lieutenant Governor, Secretary of State,
State Auditor, Attorney General;

(3) an employee of the State Board of Investment;

(4) the head of a department, division, or agency created by statute in the unclassified
service, an acting department head subsequently appointed to the position, or an employee
enumerated in section 15A.0815 or 15A.083, subdivision 4;

(5) a member of the legislature;

(6) an unclassified employee of the legislature or a commission or agency of the
legislature who is appointed without a limit on the duration of the employment or a temporary
legislative employee having shares in the supplemental retirement fund as a result of former
employment covered by this chapter, whether or not eligible for coverage under the
Minnesota State Retirement System;

(7) a person who is employed in a position established under section 43A.08, subdivision
1, clause (3), or in a position authorized under a statute creating or establishing a department
or agency of the state, which is at the deputy or assistant head of department or agency or
director level;

(8) the regional administrator, or executive director of the Metropolitan Council, general
counsel, division directors, operations managers, and other positions as designated by the
council, all of which may not exceed 27 positions at the council and the chair;

(9) the commissioner, deputy commissioner, and not to exceed nine positions of the
Minnesota Office of Higher Education in the unclassified service, as designated by the
Minnesota Office of Higher Education before January 1, 1992, or subsequently redesignated
with the approval of the board of directors of the Minnesota State Retirement System, unless
the person has elected coverage by the individual retirement account plan under chapter
354B;

(10) the clerk of the appellate courts appointed under article VI, section 2, of the
Constitution of the state of Minnesota, the state court administrator and judicial district
administrators;

(11) the chief executive officers of correctional facilities operated by the Department of
Corrections and of hospitals and nursing homes operated by Direct Care and Treatment;

(12) an employee whose principal employment is at the state ceremonial house;

(13) an employee of the Agricultural Utilization Research Institute;

(14) an employee of the State Lottery who is covered by the managerial plan established
under section 43A.18, subdivision 3;

(15) a judge who has exceeded the service credit limit in section 490.121, subdivision
22;

(16) an employee of Enterprise Minnesota, Inc.;

(17) a person employed by the Minnesota State Colleges and Universities as faculty or
in an eligible unclassified administrative position as defined in section 354B.20, subdivision
6, who was employed by the former state university or the former community college system
before May 1, 1995, and elected unclassified program coverage prior to May 1, 1995; and

(18) a person employed by the Minnesota State Colleges and Universities who was
employed in state service before July 1, 1995, who subsequently is employed in an eligible
unclassified administrative position as defined in section 354B.20, subdivision 6, and who
elects coverage by the unclassified program.

Sec. 3.

Minnesota Statutes 2024, section 352D.02, subdivision 3, is amended to read:

Subd. 3.

Transfer to general employees retirement plan.

(a) A person in the
unclassified program and referred to in subdivision 1, paragraph (c), clauses (2) to deleted text begin (4), (6)
to deleted text end (14), and (16) to (18), may elect to terminate participation in the unclassified program
and be covered by the general state employees retirement plan if the person files an election
to transfer to the general state employees retirement plan with the executive director of the
Minnesota State Retirement System as provided in paragraph (b) and deleted text begin the person's current
employment or appointment deleted text end :

(1) new text begin the person's current employment or appointment new text end began before July 1, 2010, and the
person has at least ten years of covered employment; deleted text begin or
deleted text end

(2) new text begin the person's current employment or appointment new text end began after June 30, 2010, and the
person has no more than seven years of allowable service in the unclassified program deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) the person is a member of the legislature.
new text end

(b) An election to transfer must be in writing, on a form provided by the executive
director, and delivered to the executive director:

(1) for persons described in paragraph (a), clause (1), no later than one month following
the termination of covered employment; deleted text begin or
deleted text end

(2) for persons described in paragraph (a), clause (2), by the earlier of (i) the end of the
month following the termination of employment in a position covered by the unclassified
program, and (ii) the last day of the seventh year of allowable service in the unclassified
program deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) for persons described in paragraph (a), clause (3), no later than one month following
the date the person ceased to be a member of the legislature for any reason, including but
not limited to the expiration of the term for which a member of the legislature was elected
or the death of the member.
new text end

For purposes of this chapter, deleted text begin an employee deleted text end new text begin a person new text end who does not file an election to
transfer with the executive director is deemed to have exercised the option to participate in
the unclassified program.

(c) If the transfer election is made, the executive director shall redeem the deleted text begin employee's deleted text end new text begin
person's new text end total shares and credit to the deleted text begin employee's deleted text end new text begin person's new text end account in the general employees
retirement plan the amount of contributions that would have been credited had the deleted text begin employee deleted text end new text begin
person new text end been covered by the general employees retirement plan during the deleted text begin employee's deleted text end new text begin person's new text end
entire covered employment. The balance of money redeemed and not credited to the
deleted text begin employee's deleted text end new text begin person's new text end account must be transferred to the general employees retirement plan,
except that the executive director must determine:

(1) the employee contributions paid to the unclassified program; and

(2) the employee contributions that would have been paid to the general employees
retirement plan for the comparable period, if the individual had been covered by that plan.

If clause (1) is greater than clause (2), the difference must be refunded to the deleted text begin employee deleted text end new text begin
person new text end as provided in section 352.22. If clause (2) is greater than clause (1), the difference
must be paid by the deleted text begin employee deleted text end new text begin person new text end within six months of electing general employees
retirement plan coverage or before the effective date of the annuity, whichever is sooner.

(d) An election under this subdivision to transfer coverage to the general employees
retirement plan is irrevocable during any period of covered employment.

(e) A person referenced in subdivision 1, paragraph (c), clause (1) deleted text begin , (5), deleted text end or (15), who is
credited with employee shares in the unclassified program is not permitted to terminate
participation in the unclassified program and be covered by the general employees retirement
plan.

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective the day following final enactment.
new text end