On May 19, 2023, the governor signed three bills into law that impact Minnesota public pension and retirement plans


SF3016/HF2950, the Pension and Retirement Omnibus Policy Bill (Policy Bill) 

This bill includes administrative changes requested by the Minnesota State Retirement System (MSRS).  There are no substantive changes to benefits in this bill.


SF3162/HF3100, the Pension Omnibus Budget Bill (Budget Bill)

The Budget Bill included a request from MSRS to use a more conservative investment assumption of 7% to value pension plan liabilities.
This was recommended by the MSRS actuary to reduce the assumption to a rate that is more reasonable based on projected economic conditions. 

The bill also included appropriations to MSRS pension plans totaling over $99 million to help reduce pension plan liabilities, enhance some benefits for active members of the General Plan, provide a one-time non-compounding increase to retirees, and extend supplemental funding for certain plans.

Below is a summary of the bill provisions, by plan: 

     General Plan/Unclassified Plan:
     $76,439,615 appropriation

  • $10+ million for the Governor’s COLA recommendation of a one-time 1% non-compounding payment to retirees.  
    This is in addition to the fixed 1.5% that is in current law for January 2024.
    $34+ million to reduce employee contributions to the plan to 5.5% for two years beginning July 1, 2023.
    $32+ million to reduce unfunded liabilities.
  • Remove the COLA delay for those who retire early.
  • Reduces vesting from five years to three years for employees  who are active on or after July 1, 2023.

     Correctional Plan:
     $10,446,410 appropriation

  • The appropriation funds a one-time 1% non-compounding COLA payment to retirees.
    This is in addition to the fixed 1.5% that is in the current law for January 2024. 
  • The remaining amount is deposited to the plan to reduce unfunded liabilities.
  • Extends the sunset date for supplemental funding for Correctional Plan to be three years at 100% or more.

     State Patrol Plan
     $11,970,568 appropriation

  • An appropriation to fund a one-time 3% non-compounding COLA payment to retirees.
    This is in addition to the fixed 1% that is in the current law for January 2024.        
  • $10 million to reduce unfunded liabilities due to increase of disabilities.
  • Extends the sunset date for supplemental funding for State Patrol Plan to be three years at 100% or more. 

     Judges Plan

  • $293,032 to fund a one-time non-compounding COLA payment to retirees.
    This is in addition to the fixed 1.5% that is in the current law for January 2024.
  • Extends the sunset date for supplemental funding for Judges Plan to be three years at 100% or more 

     Legislators Plan

  • $90,714 to fund a one-time non-compounding COLA payment to retirees.
    This is in addition to the fixed 1.5% that is the current law for January 2024.

SF1959/HF1234

This bill establishes a new psychological treatment program for State Patrol Plan members prior to approval for a duty disability retirement benefit.
The bill also creates a new total and permanent duty disability benefit for State Patrol Plan members. 
 


We appreciate your patience as we begin communicating and implementing these new changes. We will provide additional communication in our upcoming newsletters.