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SF 3162

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/21/2023 04:33pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to retirement; Teachers Retirement Association; providing for unreduced
retirement at age 60 or older with at least 30 years of service; providing for a
onetime 2.5 percent post-retirement adjustment; increasing employee and employer
contributions; extending the amortization date; reducing the assumption for
investment rate of return; increasing the pension adjustment revenue for school
districts; appropriating money; amending Minnesota Statutes 2022, sections
126C.10, subdivision 37; 354.42, subdivisions 2, 3; 354.435, subdivision 4;
354.436, subdivision 3; 354.44, subdivision 6; 356.215, subdivisions 8, 11; 356.415,
subdivision 1d; 356.59, subdivision 4.

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

Section 1.

Minnesota Statutes 2022, section 126C.10, subdivision 37, is amended to read:


Subd. 37.

Pension adjustment revenue.

(a) A school district's pension adjustment
revenue equals the sum of:

(1) the greater of zero or the product of:

(i) the difference between the district's adjustment under Minnesota Statutes 2012, section
127A.50, subdivision 1, for fiscal year 2014 per adjusted pupil unit and the state average
adjustment under Minnesota Statutes 2012, section 127A.50, subdivision 1, for fiscal year
2014 per adjusted pupil unit; and

(ii) the district's adjusted pupil units for the fiscal year; and

(2) the product of the salaries paid to district employees who were members of the
Teachers Retirement Association and the St. Paul Teachers' Retirement Fund Association
for the prior fiscal year and the district's pension adjustment rate for the fiscal year. The
pension adjustment rate for Independent School District No. 625, St. Paul, equals deleted text begin0.84
percent for fiscal year 2019, 1.67 percent for fiscal year 2020, 1.88 percent for fiscal year
2021, 2.09 percent for fiscal year 2022,
deleted text end 2.3 percent for fiscal year 2023deleted text begin,deleted text end and 2.5 percent for
fiscal year 2024 and later. The pension adjustment rate for all other districts equals deleted text begin0.21
percent for fiscal year 2019, 0.42 percent for fiscal year 2020, 0.63 percent for fiscal year
2021, 0.84 percent for fiscal year 2022,
deleted text end 1.05 percent for fiscal year 2023deleted text begin,deleted text end and deleted text begin1.25deleted text endnew text begin 3.85new text end
percent for fiscal year 2024 and later.

(b) For fiscal year 2025 and later, the deleted text beginstate totaldeleted text end pension adjustment revenue new text beginfor
Independent School District No. 625, St. Paul,
new text endunder paragraph (a), clause (2), must not
exceed the amount calculated under paragraph (a), clause (2), for fiscal year 2024. deleted text beginThe
commissioner must prorate the pension adjustment revenue under paragraph (a), clause (2),
so as not to exceed the maximum.
deleted text end

(c) Notwithstanding section 123A.26, subdivision 1, a cooperative unit, as defined in
section 123A.24, subdivision 2, qualifies for pension adjustment revenue under paragraph
(a), clause (2), as if it was a district, and the aid generated by the cooperative unit shall be
paid to the cooperative unit.

Sec. 2.

Minnesota Statutes 2022, section 354.42, subdivision 2, is amended to read:


Subd. 2.

Employee contribution.

(a) The employee contribution to the fund is the
following percentage of the member's salary:

Period
Basic Program
Coordinated Program
from July 1, 2014, through June 30, 2023
11 percent
7.5 percent
after June 30, 2023
deleted text begin11.25deleted text end new text begin12.12 new text endpercent
deleted text begin7.75deleted text end new text begin8.62 new text endpercent

(b) When an employee contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid for each employer unit with the first payroll cycle
reported.

(c) This contribution must be made by deduction from salary. Where any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the entire salary received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 3.

Minnesota Statutes 2022, section 354.42, subdivision 3, is amended to read:


Subd. 3.

Employer.

deleted text begin (a) The regular employer contribution to the fund by Special School
District No. 1, Minneapolis, is an amount equal to the applicable following percentage of
salary of each coordinated member and the applicable percentage of salary of each basic
member specified in paragraph (c).
deleted text end

deleted text begin The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or who is a basic member.
deleted text end

deleted text begin (b) The regular employer contribution to the fund by Independent School District No.
709, Duluth, is an amount equal to the applicable percentage of salary of each old law or
new law coordinated member specified for the coordinated program in paragraph (c).
deleted text end

deleted text begin (c)deleted text end new text begin(a) new text endThe employer contribution to the fund deleted text beginfor every other employerdeleted text end is an amount
equal to the applicable following percentage of the salary of each coordinated member and
the applicable following percentage of the salary of each basic member:

Period
Coordinated Member
Basic Member
deleted text begin from July 1, 2014, through June 30, 2018
deleted text end
deleted text begin 7.5 percent
deleted text end
deleted text begin 11.5 percent
deleted text end
deleted text begin from July 1, 2018, through June 30, 2019
deleted text end
deleted text begin 7.71 percent
deleted text end
deleted text begin 11.71 percent
deleted text end
deleted text begin from July 1, 2019, through June 30, 2020
deleted text end
deleted text begin 7.92 percent
deleted text end
deleted text begin 11.92 percent
deleted text end
deleted text begin from July 1, 2020, through June 30, 2021
deleted text end
deleted text begin 8.13 percent
deleted text end
deleted text begin 12.13 percent
deleted text end
deleted text begin from July 1, 2021, through June 30, 2022
deleted text end
deleted text begin 8.34 percent
deleted text end
deleted text begin 12.34 percent
deleted text end
from July 1, 2022, through June 30, 2023
8.55 percent
12.55 percent
after June 30, 2023
deleted text begin 8.75deleted text end new text begin11.35
new text endpercent
deleted text begin12.75deleted text end new text begin15.35 new text endpercent

deleted text begin (d)deleted text end new text begin(b) The additional employer contribution to the fund by Special School District No.
1, Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or who is a basic member.
new text end

new text begin (c) new text endWhen an employer contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid for each employer unit with the first payroll cycle
reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 4.

Minnesota Statutes 2022, section 354.435, subdivision 4, is amended to read:


Subd. 4.

Aid expiration.

The aid amounts specified in this section shall continue until
the earlier of:

(1) the first day of the fiscal year following the fiscal year in which the actuarial value
of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
reported by the actuary retained under section 356.214 in the annual actuarial valuation
prepared under section 356.215; or

(2) deleted text beginJuly 1, 2048deleted text endnew text begin the full funding date under section 356.215, subdivision 11, paragraph
(e)
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 5.

Minnesota Statutes 2022, section 354.436, subdivision 3, is amended to read:


Subd. 3.

Aid expiration.

The aid amounts specified in this section continue until the
earlier of:

(1) the first day of the fiscal year following the fiscal year in which the actuarial value
of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
reported by the actuary retained under section 356.214 in the annual actuarial valuation
prepared under section 356.215; or

(2) deleted text beginJuly 1, 2048deleted text endnew text begin the full funding date under section 356.215, subdivision 11, paragraph
(e)
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 6.

Minnesota Statutes 2022, section 354.44, subdivision 6, is amended to read:


Subd. 6.

Computation of formula program retirement annuity.

(a) The formula
retirement annuity must be computed in accordance with the applicable provisions of the
formulas stated in paragraph (b) or (d) on the basis of each member's average salary deleted text beginunder
section 354.05, subdivision 13a,
deleted text end for the period of the member's formula service credit.

(b) This paragraph, in conjunction with paragraph (c), applies to a person who first
became a member of the association or a member of a pension fund listed in section 356.30,
subdivision 3
, before July 1, 1989, unless paragraph (d), in conjunction with paragraph (e),
produces a higher annuity amount, in which case paragraph (d) applies. The average salary
deleted text begin as defined in section 354.05, subdivision 13a,deleted text end multiplied by the following percentages per
year of formula service credit deleted text beginshall determinedeleted text end new text begindetermines new text endthe amount of the annuity to which
the member deleted text beginqualifying therefordeleted text end is entitled for service rendered before July 1, 2006:

Period
Coordinated Member
Basic Member
Each year of service
during first ten
1.2 percent per year
2.2 percent per year
Each year of service
thereafter
1.7 percent per year
2.7 percent per year

For service rendered on or after July 1, 2006, by a member other than a member who
was a member of the former Duluth Teachers Retirement Fund Association between January
1, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member
who was a member of the former Duluth Teachers Retirement Fund Association between
January 1, 2013, and June 30, 2015, the average salary deleted text beginas defined in section 354.05,
subdivision 13a
,
deleted text end multiplied by the following percentages per year of service credit, determines
the amount the annuity to which the member deleted text beginqualifying therefordeleted text end is entitled:

Period
Coordinated Member
Basic Member
Each year of service
during first ten
1.4 percent per year
2.2 percent per year
Each year of service after
ten years of service
1.9 percent per year
2.7 percent per year

(c)(1) This paragraph applies only to a person who first became a member of the
association or a member of a pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in conjunction
with this paragraphnew text begin,new text end than when calculated under paragraph (d), in conjunction with paragraph
(e).

(2) Where any member retires prior to normal retirement age under a formula annuity,
the member shall be paid a retirement annuity in an amount equal to the normal annuity
provided in paragraph (b) reduced by one-quarter of one percent for each month that the
member is under normal retirement age at the time of retirement except that for any member
who has 30 or more years of allowable service credit, the reduction shall be applied only
for each month that the member is under age 62.

(3) Any member whose attained age plus credited allowable service totals 90 years is
entitled, upon application, to a retirement annuity in an amount equal to the normal annuity
provided in paragraph (b), without any reduction by reason of early retirement.

(d) This paragraph applies to a member who has become at least 55 years old and first
became a member of the association after June 30, 1989, and to any other member who has
become at least 55 years old and whose annuity amount when calculated under this paragraphdeleted text begin
and
deleted text endnew text begin,new text end in conjunction with paragraph (e), is higher than it is when calculated under paragraph
(b), in conjunction with paragraph (c).

(1) For a basic member, the average salarydeleted text begin, as defined in section 354.05, subdivision
13a
,
deleted text end multiplied by 2.7 percent for each year of service deleted text beginfor a basic memberdeleted text end determines the
amount of the retirement annuity to which the basic member is entitled. The annuity of a
basic member who was a member of the former Minneapolis Teachers Retirement Fund
Association as of June 30, 2006, must be determined according to the annuity formula under
the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association
in effect as of that date.

(2) For a coordinated member, the average salarydeleted text begin, as defined in section 354.05,
subdivision 13a
,
deleted text end multiplied by 1.7 percent for each year of service rendered before July 1,
2006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a
member other than a member who was a member of the former Duluth Teachers Retirement
Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each
year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers
Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the
amount of the retirement annuity to which the coordinated member is entitled.

(e) This paragraph applies to a person who has become at least 55 years old and first
becomes a member of the association after June 30, 1989, and to any other member who
has become at least 55 years old and whose annuity is higher when calculated under
paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b)
in conjunction with paragraph (c). deleted text beginAn employee who retires under the formula annuity
before the normal retirement age is entitled to receive the normal annuity provided in
paragraph (d), reduced as described in clause (1) or (2), as applicable.
deleted text end

deleted text begin (1) For a member who is at least age 62 and has at least 30 years of service, the annuity
shall be reduced by an early reduction factor of six percent for each year that the member's
age of retirement precedes the normal retirement age. The resulting reduced annuity shall
be further adjusted to take into account the increase in the monthly amount that would have
occurred had the member retired early and deferred receipt of the annuity until normal
retirement age and the annuity was augmented during the deferral period at 2.5 percent, if
the member commenced employment after June 30, 2006, or at three percent, if the member
commenced employment before July 1, 2006, compounded annually.
deleted text end

deleted text begin (2)deleted text end new text begin(1) new text endFor a member who deleted text beginhas not attained age 62 or has fewer than 30 years of servicedeleted text endnew text begin
retires under the formula annuity before attaining normal retirement age
new text end, the annuity shall
be reduced for each year that the member's age of retirement precedes normal retirement
age by the following early reduction factors:

(i) for the period during which the member is age 55 through age 58, the factor is four
percent; and

(ii) for the period during which the member is at least age 59 but not yet normal retirement
age, the factor is seven percent.

The resulting annuity shall be further adjusted to take into account the increase in the
monthly amount that would have occurred had the member retired early and deferred receipt
of the annuity until normal retirement age and the annuity was augmented during the deferral
period at the applicable annual rate, compounded annually. The applicable annual rate is
the rate in effect for the month that includes the member's effective date of retirement and
shall be considered as fixed for the member for the period until the member reaches normal
retirement age. The applicable annual rate for June 2019 is 2.5 percent, if the member
commenced employment after June 30, 2006, or three percent, if the member commenced
employment before July 1, 2006, compounded annually, and decreases each month beginning
July 2019 in equal monthly increments over the five-year period that begins July 1, 2019,
and ends June 30, 2024, to zero percent effective for July 2024 and thereafter.

After June 30, 2024, the reduced annuity commencing before normal retirement age
under this clause shall not take into account any augmentation.

new text begin (2) For a member who retires when the member is at least age 60 and has at least 30
years of allowable service, the annuity shall be in an amount equal to an annuity calculated
under paragraph (d), without any reduction by reason of early retirement.
new text end

(f) No retirement annuity is payable to a former employee with a salary that exceeds 95
percent of the governor's salary unless and until the salary figures used in computing the
highest five successive years average salary under paragraph (a) have been audited by the
Teachers Retirement Association and determined by the executive director to comply with
the requirements and limitations of section 354.05, subdivisions 35 and 35a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2022, section 356.215, subdivision 8, is amended to read:


Subd. 8.

Actuarial assumptions.

(a) The actuarial valuation must use the applicable
following investment return assumption:

plan
investment return
assumption
general state employees retirement plan
7.5%
correctional state employees retirement plan
7.5
State Patrol retirement plan
7.5
legislators retirement plan, and for the
constitutional officers calculation of total plan
liabilities
0
judges retirement plan
7.5
general public employees retirement plan
7.5
public employees police and fire retirement plan
7.5
local government correctional service retirement
plan
7.5
teachers retirement plan
deleted text begin 7.5 deleted text end new text begin 7
new text end
St. Paul teachers retirement plan
7.5
Bloomington Fire Department Relief Association
6
local monthly benefit volunteer firefighter relief
associations
5
monthly benefit retirement plans in the statewide
volunteer firefighter retirement plan
6

(b) The actuarial valuation for each of the covered retirement plans listed in section
356.415, subdivision 2, and the St. Paul Teachers Retirement Fund Association must take
into account the postretirement adjustment rate or rates applicable to the plan as specified
in section 354A.29, subdivision 7, or 356.415, whichever applies.

(c) The actuarial valuation must use the applicable salary increase and payroll growth
assumptions found in the appendix to the standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement pursuant to section 3.85, subdivision
10
. The appendix must be updated whenever new assumptions have been approved or
deemed approved under subdivision 18.

(d) The assumptions set forth in the appendix to the standards for actuarial work continue
to apply, unless a different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most
recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 8.

Minnesota Statutes 2022, section 356.215, subdivision 11, is amended to read:


Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating the level
normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial
reporting purposes indicating the additional annual contribution sufficient to amortize the
unfunded actuarial accrued liability and must contain an exhibit indicating the additional
contribution sufficient to amortize the unfunded actuarial accrued liability. For the retirement
plans listed in subdivision 8, paragraph (a), but excluding the legislators retirement plan,
the Bloomington Fire Department Relief Association, and the local monthly benefit volunteer
firefighter relief associations, the additional contribution must be calculated on a level
percentage of covered payroll basis by the established date for full funding in effect when
the valuation is prepared, assuming annual payroll growth at the applicable percentage rate
set forth in the appendix described in subdivision 8, paragraph (c). For the legislators
retirement plan, the additional annual contribution must be calculated on a level annual
dollar amount basis.

(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the fund, a change in the benefit plan governing
annuities and benefits payable from the fund, a change in the actuarial cost method used in
calculating the actuarial accrued liability of all or a portion of the fund, or a combination
of the three, which change or changes by itself or by themselves without inclusion of any
other items of increase or decrease produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding is the first actuarial valuation date
occurring after June 1, 2020.

(c) For any retirement plan, if there has been a change in any or all of the actuarial
assumptions used for calculating the actuarial accrued liability of the fund, a change in the
benefit plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by itself or by themselves and
without inclusion of any other items of increase or decrease, produce a net increase in the
unfunded actuarial accrued liability in the fund, the established date for full funding must
be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in accordance
with the plan provisions governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the investment return assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance
with any new plan provisions governing annuities and benefits payable from the fund and
any new actuarial assumptions and the remaining plan provisions governing annuities and
benefits payable from the fund and actuarial assumptions in effect before the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the applicable
change is effective must be calculated using the applicable investment return assumption
specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item (iv)
must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined in
item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the investment return
assumption specified in subdivision 8 in effect after any applicable change, rounded to the
nearest integral number of years, but not to exceed 30 years from the end of the plan year
in which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the plan
year in which the determination of the established date for full funding using the procedure
set forth in this clause is made and ending by the date for full funding in effect before the
change; and

(vii) the period determined under item (vi) must be added to the date as of which the
actuarial valuation was prepared and the date obtained is the new established date for full
funding.

(d) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2048.

(e) For the Teachers Retirement Association, the established date for full funding is June
30, deleted text begin2048deleted text endnew text begin 2053new text end.

(f) For the correctional state employees retirement plan and the State Patrol retirement
plan of the Minnesota State Retirement System, the established date for full funding is June
30, 2048.

(g) For the judges retirement plan, the established date for full funding is June 30, 2048.

(h) For the local government correctional service retirement plan and the public employees
police and fire retirement plan, the established date for full funding is June 30, 2048.

(i) For the St. Paul Teachers Retirement Fund Association, the established date for full
funding is June 30, 2048.

(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, 2048.

(k) For the retirement plans for which the annual actuarial valuation indicates an excess
of valuation assets over the actuarial accrued liability, the valuation assets in excess of the
actuarial accrued liability must be recognized as a reduction in the current contribution
requirements by an amount equal to the amortization of the excess expressed as a level
percentage of pay over a 30-year period beginning anew with each annual actuarial valuation
of the plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 9.

Minnesota Statutes 2022, section 356.415, subdivision 1d, is amended to read:


Subd. 1d.

Teachers Retirement Association annual postretirement adjustments.

(a)
Except as set forth in paragraph (d), recipients of a retirement annuity, disability benefit,
or survivor benefit from the Teachers Retirement Association are entitled to an annual
postretirement adjustment, effective as of each January 1, as follows:

deleted text begin (1) effective January 1, 2019, through December 31, 2023, a postretirement increase of
one percent must be applied each year to the amount of the monthly annuity or benefit of
each annuitant or benefit recipient who has been receiving an annuity or a benefit for at
least 12 full months as of the June 30 of the calendar year immediately before the adjustment;
deleted text end

deleted text begin (2) effective January 1, 2019, through December 31, 2023, for each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least one full month, but less
than 12 full months as of the June 30 of the calendar year immediately before the adjustment,
a postretirement increase of 1/12 of one percent for each month the person has been receiving
an annuity or benefit must be applied to the amount of the monthly annuity or benefit of
the annuitant or benefit recipient;
deleted text end

deleted text begin (3) effective January 1, 2024, and thereafter,deleted text end new text begin(1) new text enda postretirement increase must be applied
each year to the amount of the monthly annuity or benefit of each annuitant or benefit
recipient who has been receiving an annuity or a benefit for at least 12 full months as of the
June 30 of the calendar year immediately before the adjustment, at the following rates:

new text begin from January 1, 2023, through December 31, 2023
new text end
new text begin 1 percent
new text end
from January 1, 2024, through December 31, 2024
deleted text begin1.1deleted text end new text begin2.5 new text endpercent
from January 1, 2025, through December 31, 2025
1.2 percent
from January 1, 2026, through December 31, 2026
1.3 percent
from January 1, 2027, through December 31, 2027
1.4 percent
from January 1, 2028, and thereafter
1.5 percent

deleted text begin (4) effective January 1, 2024, and thereafter,deleted text end new text begin(2) new text endfor each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least one full month, but less than 12
full months, as of the June 30 of the calendar year immediately before the adjustment, an
annual postretirement increase of 1/12 of the applicable percentage for each month that the
person has been receiving an annuity or benefit must be applied to the amount of the monthly
annuity or benefit of the annuitant or benefit recipient. The applicable percentages are the
following:

new text begin from January 1, 2023, through December 31, 2023
new text end
new text begin 1 percent
new text end
from January 1, 2024, through December 31, 2024
deleted text begin1.1deleted text end new text begin2.5 new text endpercent
from January 1, 2025, through December 31, 2025
1.2 percent
from January 1, 2026, through December 31, 2026
1.3 percent
from January 1, 2027, through December 31, 2027
1.4 percent
from January 1, 2028, and thereafter
1.5 percent

(b) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Teachers Retirement Association requesting that the increase not
be made.

(c) The retirement annuity payable to a person who retires before becoming eligible for
Social Security benefits and who has elected the optional payment as provided in section
354.35 must be treated as the sum of a period-certain retirement annuity and a life retirement
annuity for the purposes of any postretirement adjustment. The period-certain retirement
annuity plus the life retirement annuity must be the annuity amount payable until age 62,
65, or normal retirement age, as selected by the member at retirement, for an annuity amount
payable under section 354.35. A postretirement adjustment granted on the period-certain
retirement annuity must terminate when the period-certain retirement annuity terminates.

(d) Members who retire on or after July 1, 2024, are entitled to an annual postretirement
adjustment of the member's retirement annuity, effective as of each January 1, beginning
with the year following the year in which the member attains normal retirement age, as
follows:

(1) if a member has been receiving an annuity for at least 12 full months as of the June
30 of the calendar year immediately before the date of the adjustment, a postretirement
increase equal to the percentage specified in paragraph (a), clause (3), must be applied,
effective on January 1, to the amount of the member's monthly annuity;

(2) if a member has been receiving an annuity for at least one full month, but less than
12 full months as of the June 30 of the calendar year immediately before the date of
adjustment, a postretirement increase of 1/12 of the applicable percentage specified in
paragraph (a), clause (4), for each month that the member has been receiving an annuity
must be applied, effective on January 1, to the amount of the member's monthly annuity;
or

(3) if a member has been receiving an annuity for fewer than seven months as of the
January 1 of the year following the year in which the member attains normal retirement
age, a postretirement adjustment shall be applied effective as of the next January 1. The
amount of the adjustment shall be determined under clause (2).

(e) Paragraph (d) does not apply to members who retire under section 354.44, subdivision
6
, paragraph (c), clause (3), deleted text beginordeleted text end who retire when the member is at least age 62 and has at
least 30 years of service under section 354.44, subdivision 6, paragraph (c), deleted text begin(d)deleted text endnew text begin clause (2)new text end,
new text begin or who retire under section 354.44, subdivision 6, paragraph new text end(e),deleted text begin or (f), as applicabledeleted text endnew text begin clause
(2)
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2022, section 356.59, subdivision 4, is amended to read:


Subd. 4.

Teachers Retirement Association.

The interest rates for the retirement plan
administered by the Teachers Retirement Association are as follows:

Annual
Monthly
before July 1, 2018
8.5 percent
0.71 percent
deleted text begin after June 30deleted text endnew text begin from July 1new text end, 2018new text begin, to June
30, 2023
new text end
7.5 percent
0.625 percent
new text begin after June 30, 2023
new text end
new text begin 7 percent
new text end
new text begin 0.583 percent
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end

Sec. 11. new text beginAPPROPRIATION; TEACHERS RETIREMENT ASSOCIATION.
new text end

new text begin $315,800,000 in fiscal year 2024 is appropriated from the general fund to the Teachers
Retirement Association for a onetime increase in the post-retirement adjustment effective
on January 1, 2024, and ending on December 31, 2024. This appropriation does not cancel,
but is available until June 30, 2025.
new text end

Sec. 12. new text beginAPPROPRIATIONS; TEACHERS RETIREMENT ASSOCIATION.
new text end

new text begin (a) $....... in fiscal year 2024 and $....... in fiscal year 2025 are appropriated from the
general fund to the Department of Education for increased employer pension contributions
to the Teachers Retirement Association. The base for fiscal year 2026 is $........ Beginning
with fiscal year 2027 and later, the base must increase annually by three percent of the prior
fiscal year's base.
new text end

new text begin (b) $....... in fiscal year 2024 and $....... in fiscal year 2025 are appropriated from the
general fund to the Minnesota State Academies for increased employer pension contributions
to the Teachers Retirement Association. The base for fiscal year 2026 is $........ Beginning
with fiscal year 2027 and later, the base must increase annually by three percent of the prior
fiscal year's base.
new text end

new text begin (c) $....... in fiscal year 2024 and $....... in fiscal year 2025 are appropriated from the
general fund to the Perpich Center for the Arts for increased employer pension contributions
to the Teachers Retirement Association. The base for fiscal year 2026 is $........ Beginning
with fiscal year 2027 and later, the base must increase annually by three percent of the prior
fiscal year's base.
new text end

new text begin (d) $....... in fiscal year 2024 and $....... in fiscal year 2025 are appropriated from the
general fund to the Minnesota State Colleges and Universities for increased employer
pension contributions to the Teachers Retirement Association. The base for fiscal year 2026
is $........ Beginning with fiscal year 2027 and later, the base must increase annually by three
percent of the prior fiscal year's base.
new text end

Sec. 13. new text beginEDUCATION APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin The sums indicated are appropriated from
the general fund to the Department of Education for the fiscal years designated. These sums
are in addition to appropriations made for the same purpose in any other law.
new text end

new text begin Subd. 2. new text end

new text begin General education aid. new text end

new text begin For general education aid under Minnesota Statutes,
section 126C.13, subdivision 4:
new text end

new text begin $
new text end
new text begin .......
new text end
new text begin 2024
new text end
new text begin $
new text end
new text begin .......
new text end
new text begin 2025
new text end

new text begin The 2024 appropriation includes $0 for 2023 and $....... for 2024. The 2025 appropriation
includes $....... for 2024 and $....... for 2025.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2023.
new text end