Minnesota Legislature
HF 2329
as introduced - 94th Legislature (2025 - 2026) Posted on 03/13/2025 03:02pm
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 03/13/2025 |
Current Version - as introduced
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A bill for an act
relating to retirement; Teachers Retirement Association; lowering the age from
62 to 60 for the enhanced early retirement reduction; clarifying the postretirement
adjustment delay; amending Minnesota Statutes 2024, sections 354.44, subdivision
6; 356.415, subdivision 1d.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, 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 under
section 354.05, subdivision 13a, 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
as defined in section 354.05, subdivision 13a, multiplied by the following percentages per
year of formula service credit shall determine the amount of the annuity to which the member
qualifying therefor 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 as defined in section 354.05,
subdivision 13a, multiplied by the following percentages per year of service credit, determines
the amount the annuity to which the member qualifying therefor 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 paragraph 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 paragraph
and 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 salary, as defined in section 354.05, subdivision
13a, multiplied by 2.7 percent for each year of service for a basic member 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 salary, as defined in section 354.05,
subdivision 13a, 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). An employee who retires under the formula annuity
before the normal retirement age is entitled to receive deleted text begin the normaldeleted text end new text begin annew text end annuity deleted text begin provided in
paragraph (d), reduced as described indeleted text end new text begin undernew text end clause (1) or (2), as applicable.
(1) For a member who is at least age deleted text begin 62deleted text end new text begin 60new text end and has at least 30 years of service, the
annuity deleted text begin shall bedeleted text end new text begin is the normal annuity provided in paragraph (d)new text end 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.
(2) For a member who has not attained age deleted text begin 62deleted text end new text begin 60new text end or has fewer than 30 years of service,
the annuity deleted text begin shall bedeleted text end new text begin is the normal annuity provided in paragraph (d)new text end 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
deleted text begin shalldeleted text end new text begin mustnew text end 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.
(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 July 1, 2025.
new text end
Sec. 2.
Minnesota Statutes 2024, section 356.415, subdivision 1d, is amended to read:
Subd. 1d.
new text begin Annual postretirement adjustments; new text end Teachers Retirement Associationdeleted text begin
annual postretirement adjustmentsdeleted text end .
(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 end a 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:
| from January 1, 2024, through December 31, 2024 |
1.1 percent |
|
| 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 end 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, 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:
| from January 1, 2024, through December 31, 2024 |
1.1 percent |
|
| 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), or who retire new text begin under section 354.44, subdivision 6, paragraph
(c), clause (2), (d), or (e), new text end when the member is at least age 62 and has at least 30 years of
service deleted text begin under section 354.44, subdivision 6, paragraph (c), (d), (e), or (f), as applicabledeleted 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