General employees retirement plan employee and employer contributions modification

2025-2026 Regular Session Introduced by Zaynab Mohamed

The bill lowers school employee contributions to 5.50% starting July 1, 2026, while increasing the employer share to 7.50% for school employees in the GERP.

Referred to State and Local Government

#educationandeducationdepartment #government-employees #retirement

Purpose and intent

The bill proposes changes to employee and employer contribution rates for the General Employees Retirement Plan (GERP) administered by the Public Employees Retirement Association (PERA).

Specifically, it alters the contribution percentages for school employees effective July 1, 2026, and maintains or clarifies existing rates for basic and coordinated members of the General Employees Retirement Plan.

Key provisions and changes

Section 1 — Employee contributions (Minnesota Statutes 2024, § 353.27, subd. 2)

For a basic member of the GERP: employee contribution remains at 9.10% of salary.

For a coordinated member of the GERP: employee contribution is set at a tiered rate depending on prior adjustments:

Effective after December 31, 2010: 6.25%
Effective January 1, 2015: 6.50%

For school employees:

Effective July 1, 2026: 5.50% of salary

Contributions are to be deducted from salary as defined in § 353.01, subd. 10, using the manner provided in subd. 4.

If any portion of a member’s salary is paid from non-public funds, the contribution base is the total salary from all sources.

Section 2 — Employer contributions (Minnesota Statutes 2024, § 353.27, subd. 3)

For a basic member of the GERP: employer contribution remains at 9.10% of salary.

For a coordinated member of the GERP: employer contribution is tiered similarly to employee contributions:

Effective after December 31, 2010: 6.25%
Effective January 1, 2015: 6.50%

For school employees:

Effective July 1, 2026: 7.50%

Employer contributions must be funded and made from funds available to the employing subdivision, using the methods specified in § 353.28.

Who is affected

Members of the General Employees Retirement Plan, including:

Basic members
Coordinated members
School employees covered under the GERP

Employers/subdivisions that fund PERA coverage

The changes primarily affect the contribution rates (percentages of salary) paid by employees and employers for school employees beginning July 1, 2026, while preserving existing rates for other member categories.

Procedural and timeline aspects

Effective dates:

For school employee contributions: July 1, 2026 (new rate of 5.50% for employees; 7.50% for employers).
For existing coordinated member contribution rates: unchanged by the bill beyond reaffirming the historical 6.25% (post-2010) and 6.50% (2015) steps.

The bill is introduced in the Minnesota Senate (SF 5182) in the 2025-2026 session and referred to State and Local Government.

Potential implications

Reduced employee contribution rate for school employees (5.50% starting July 1, 2026) relative to higher categories, which could improve take-home pay for school employees while shifting a greater share of retirement funding to the employer side at the specified rate (7.50% for school employees).

Overall funding for the General Employees Retirement Plan would be affected by the new mix of employee and employer contributions for school employees, possibly impacting plan funding requirements, employer budget planning, and PERA trust funding.

Administrative implementation will require payroll systems to update deduction calculations for eligible employees starting July 1, 2026.

Note: This summary reflects the bill as introduced (SF 5182) and focuses on the substantive changes to contribution rates and their applicability.

Bill