Bill
SF 5181
The bill creates a 60+30 career rule to adjust pension calculations, including formula retirement Annuity and early-retirement reductions for eligible teachers.
Purpose
- The bill aims to create a new career rule for certain public school teachers in Minnesota who are at least 60 years old and have at least 30 years of service. The rule seeks to adjust retirement calculations and pension terms for these qualifying educators, integrating them more flexibly into the retirement system.
Key Provisions and Changes
1) Pension adjustment revenue (Section 1)
- Amends Minnesota Statutes 2025 Supplement, section 126C.10, subdivision 37, to modify how pension adjustment revenue is calculated and administered.
- For the portion tied to district payroll (clause (2)), the bill specifies pension adjustment rates by district type:
- Independent School District No. 625 (St. Paul) would have a stated rate of 2.3% (fiscal year 2023), increasing to 2.5% (fiscal years 2024–2025), and 3.25% (fiscal year 2026 onward).
- All other districts would see 1.25% for fiscal year 2025 and 2.31% for fiscal year 2026 onward.
- Provisions address caps and prorating:
- For FY 2025, state total pension adjustment revenue cannot exceed the amount calculated for FY 2024 (proration required to stay within the maximum).
- For FY 2026 and 2027, no prorating is required.
- For FY 2028 and later, the state total cannot exceed the FY 2027 figure, with prorating to stay within the maximum.
- Cooperative units qualify for pension adjustment revenue as if they were districts, with aid paid to the cooperative unit.
2) Employer contributions to the retirement fund (Section 2)
- Amends Minnesota Statutes 2025 Supplement, section 354.42, subdivision 3, to detail employer contribution percentages:
- Minneapolis Special School District No. 1: regular employer contribution equal to applicable percentages of salary for coordinated and basic members; additional contribution of 3.64% for coordinated/basic members.
- Independent School District No. 709 (Duluth): regular employer contribution based on applicable percentages for the coordinated program.
- All other employers: 9.81% of the salary for coordinated members and 13.81% for basic members.
- When rates change, the new rate applies to the entire salary in the first payroll cycle of the fiscal year.
3) Formula retirement annuity computation; 60+30 rule (Section 3)
- Amends Minnesota Statutes 2025 Supplement, section 354.44, subdivision 6, to modify the computation of formula retirement annuities, including:
- Application of the standard formula based on the member’s average salary and service credit.
- Specific rules for members who became part of certain pension funds prior to or after 1989 and 2006, outlining different percentage multipliers for coordinated vs. basic members.
- A new (or clarified) provision for an early retirement reduction:
- For members aged 60+ with at least 30 years of service, the annuity is the normal amount (under the defined formula) reduced by a 5% per year early retirement factor, with adjustments for deferral-augmentation if retirement occurred after June 30, 2006 (and at different rates if employed before July 1, 2006).
- For other members, early retirement reductions apply as follows:
- Ages 55–58: 4% per year reduction.
- Ages 59 to normal retirement age: 7% per year reduction.
- Augmentation and deferral effects apply, with specific augmentation rates (2.5% or 3% depending on prior employment) phased down from 2019 to 2024 and then discontinued after mid-2024.
Affected Parties and Scope
- School districts, including the Minneapolis Special School District No. 1 and St. Paul’s district, are affected through pension adjustment revenue and employer contribution provisions.
- Cooperative units defined under 123A.24 participate in pension adjustment revenue.
- Members of teachers’ pension funds, including coordinated and basic members, with particular emphasis on those who are at least 60 years old with 30 years of service, and those who have specific prior fund affiliations (pre/post-1989 and pre/post-2006 cohorts).
Procedural/Timelines
- Status: Introduced and referred to the State and Local Government Committee on 04/20/2026.
- No explicit sunset or long-range timelines beyond fiscal year references (2025–2028+ for various provisions) are stated in the text provided.
Notes
- The bill establishes a “career rule” framework linked to the 60-and-30 eligibility, but the text primarily details pension-adjustment, employer contribution formulas, and retirement annuity calculations rather than a separate comprehensive career transition program.
Compiled from official sources — confirm details with the bill’s official record.
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