The Unclassified Retirement Plan is a defined contribution retirement plan. The plan is "tax-deferred," which means you don't pay taxes until the money is withdrawn.
Retirement benefits are based on the value of your account when you retire and the age at which you start to collect your benefit. The account balance is comprised of contributions from you and your employer, plus any investment gains or losses.
You have the freedom to choose how contributions to your account will be invested.
To learn more, see the Unclassified Retirement Handbook (pdf).
Employee and employer contribution rates are established by Minnesota law. Contributions are a percentage of pay.
| Employee Contribution | Employer Contribution |
|---|---|
| 6.00% | 6.25% |
| 5.50% (temporary reduction starting 7/1/2023 to 6/30/2025) | 6.25% |
You are immediately eligible for monthly benefits -- or what we call vested -- in the Unclassified Plan. You are eligible to begin collecting a retirement benefit at age 55 or older.
Unclassified Plan membership is determined by Minnesota law. Participation is mandatory unless you elect to be covered by the General Employees Retirement Plan (if eligible for that provision).
Most positions covered by the Unclassified Plan are determined by political election; generally, at-will, appointed positions that may result in a shorter period of service. For example, employees at the legislature and upper-level state government management are members of this plan. For a complete list of positions covered by the Unclassified Plan, see MN Statute 352D.02, Subd. 1.
Note: Some positions are called "unclassified" but may not be covered by this plan. The position must be specifically outlined in law to participate in the Unclassified Plan. Please contact our office at 1-800-657-5757 to determine if your position is covered by this plan.
Contributions to the Unclassified Plan are automatically invested in a Target Retirement Fund closest to your retirement year (the year you turn age 65). For example, if you will reach age 65 in 2022, the default investment option is the Target Retirement 2020 Fund. You can leave your account balance in this fund or transfer it to any of the other funds offered by the plan.
To learn more, see:
Elected officials, legislators, judges and constitutional officers are not eligible for these special provisions.
Transfer Rights During First Year of Employment
If you previously contributed to the General Employees Retirement Plan (General Plan) or another Minnesota public pension plan, you may transfer your employee and employer contributions (plus interest) from the previous pension plan to the Unclassified Plan. To request a transfer, complete Election to Transfer Prior Service Contributions (pdf).
If you took a refund of your employee contributions from another public pension plan, you may repay the refund of your contributions plus interest, and transfer both employee and employer contributions to the Unclassified Plan.
It may not always be beneficial to transfer your assets to the Unclassified Plan. In some cases, it is better to leave your money with the other retirement plan and take advantage of the Combined Service Law. The General Plan and Unclassified Plan offer different survivor benefits that should be compared before switching plans.
Converting to the General Employees Retirement Plan
Unclassified Plan members have the option to convert to the General Employees Retirement Plan (General Plan), which is a defined benefit (traditional pension) plan.
To compare your options, contact MSRS to request an estimate of benefits under both plans or see Unclassified Retirement Plan Transfer Options (pdf).
Transfer timeline
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If hired after June 30, 2010, you must complete an election form (pdf) within the first seven years of each position appointment. If you end employment anytime during the 7-year period, you have 30 days after your termination date to elect coverage under the General Plan.
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If hired before July 1, 2010, the complete an election form (pdf) any time after 10 years of state service but must be made within 30 days of leaving state service.
The funds in your account are available once you end state service. There are several withdrawal options to consider, including a lifetime monthly retirement benefit, lump sum payout, rollover of your account balance, or partial lump sum payout with a monthly retirement benefit.
Service credit -- or allowable service -- is the credit you earn each month retirement deductions are withheld from your salary. Service credit does not impact your monthly retirement benefit if you elect benefits under the Unclassified Retirement Plan. However, if you convert to the General Employees Retirement Plan, service credit is an important part of how we determine your retirement benefit.
To learn more, see Withdrawal Options & Service Credit.
If you die before you begin to collect monthly retirement benefits from the Unclassified Retirement Plan, your marital status determines who will receive survivor coverage and the type of coverage available.
Surviving spouse coverage under the Unclassified Plan is automatic and continues upon remarriage. You can elect a non-spousal beneficiary; however, both you and your spouse must sign a waiver in the presence of a notary to have the surviving spouse benefits waived.
Upon your death, your surviving spouse will have a choice among the following options:
If your surviving spouse dies with value remaining in the account, the balance of your account is paid to your spouse's children in equal shares, spouse's parents, or to your spouse's estate.
- Lifetime monthly payments based on your spouse's age and the value of your account.
- The value of the lifetime payments can be accelerated that would last 10, 15 or 20 years.
- A lump-sum payment of the cash value of your account, which would be taxable unless rolled into a qualified plan.
- A combination of a lump-sum payment and monthly benefits based on the remainder of the account value. If a lump-sum payment is selected, the monthly benefit must begin immediately.
The value of your account will be paid to your designated beneficiary. If there is no beneficiary, the value of your account is payable to your children in equal shares, if no children, to your parents, if no parents, to your estate.
As a member of the Unclassified Plan, you may be eligible to convert to the General Plan (pdf). Here are some things you should consider with regard to the survivor benefits:
To receive an estimate of survivor benefits each plan would pay, call MSRS at 1-800-657-5757.
- Often, the monthly surviving spouse benefits payable from the General Plan are greater than the survivor spouse benefits payable from the Unclassified Plan.
- If you become seriously ill or if surviving spouse coverage is important to you, it may be beneficial to switch to the General Plan.
- The Unclassified Plan generally provides higher value to a non-spouse beneficiary. Under the General Plan, a beneficiary is only entitled to your contributions, plus interest. Under the Unclassified Plan, the beneficiary receives the entire value of your account, including the employee and employer contributions, and any investment gains.
As a member of the Unclassified Plan, you have total and permanent disability protection. The benefit is based on your age and your account value at the time you begin to collect monthly benefits. Contact MSRS for more details regarding disability eligibility and benefits.
If you are eligible to convert to the General Plan, it will likely provide higher monthly disability benefits.
To learn more, see Disability Benefit.