Omnibus pensions bill clears House, awaits Senate action

This year’s omnibus pension and retirement bill contains good news for probation officers and 911 telecommunicators.

Passed 129-5 Wednesday by the House, the bill, among its provisions, would create a Public Employees Retirement Association-administered pension plan for those who work for local governments, and a subplan within the Minnesota State Retirement System for state-employed probation officers and 911 telecommunicators.

The bill, amended twice with technical changes, consists of 16 bills approved by the Legislative Commission on Pensions and Retirement during the 2026 legislative session.

“It’s an incredible bill. It’s amazing work we were able to accomplish,” said Rep. Leon Lillie (DFL-North St. Paul), who sponsors HF4074 that now awaits Senate approval. The bill checks in at just under $15.37 million in new Fiscal Year 2027 spending and almost $25.4 million more in the 2028-29 biennium.

[MORE: View the spreadsheet, list of source bills and substantive amendments]

The 2025 pensions law required the convening of a working group to create pension plans for probation officers and 911 telecommunicators. Its end product is a focus of this year’s bill.

“They’ve been working on this for decades, so to be able to do this is actually historic. It’ll make a huge difference in the lives of these workers,” Lillie said.

[MORE: View the working group’s report and appendix]

Another key point of the bill is providing $8 million direct state aid to the Public Employees Police and Fire Plan by Oct. 1, 2026, and each Oct. 1 thereafter to fund reducing a postretirement adjustment — or COLA — delay. This would reduce the waiting period for a retiree or benefit recipient to receive a full COLA from 24 months to 12 months, and from 13 months to 1 month the waiting period for a partial COLA.

Rep. Pete Johnson (DFL-Duluth) said buying down that two-year wait puts it on par with all other state retirement plans for public workers. “For firefighters and police officers under that plan prior to last year and this year they had to wait three years for a cost-of-living adjustment. When you pair that with inflation that we saw and everything else, the buying power for those folks really dropped.”

To address funding deficiencies of more than $700 million, the 2018 pension law included sustainability measures for the state’s public pension systems, including increased employee contributions.

“One of the things that we said is that when these plans start stabilizing and growing and getting to the levels that we need to, the Legislature would look at restoration of benefits,” Rep. Tim O'Driscoll (R-Sartell) told the House Ways and Means Committee May 7.

The bill also includes $3.4 million for lowering by 1% the employee contributions for coordinated members of the St. Paul Teachers’ Retirement Fund Association and increasing the postretirement adjustment for retirees from 1% to 1.5%. Rep. Josiah Hill (DFL-Stillwater) said both match levels of the Teachers Retirement Association.

A $139,000 savings would come from reallocating how the State Board of Investment assesses its costs for investing in various funds.

“It adds transparency, accuracy and brings us into modern methods of accounting for expenses,” Rep. Ginny Klevorn (DFL-Plymouth) said at the May 7 meeting. The provision comes from her HF4367.

Other aspects of the bill include:

• reducing from 62 to 59 1/2 the age at which a teacher covered by the Teachers Retirement Association can enter into a return-to-work agreement before the effective date of retirement and still commence receipt of a retirement annuity from the association;
• revising how a deputy state fire marshal, fire/arson investigator, becomes covered by the fire marshal subplan;
• clarifying pension plan changes needed due to the Minnesota Paid Leave program; and
• modifying the process to terminate a firefighter relief association retirement plan.

A pair of working groups are called for: Vesting and Emergency Medical Providers in Firefighter Relief Associations and the Statewide Volunteer Firefighter Plan and a Duty Disability and the Public Safety Officer’s Benefit Account.

“There’s a lot of people out there doing EMS work and other things who are not covered in the local pension plans,” Lillie said. “… There’s things that we can do more to help in this space.”