Minnesota House Passes Pensions Budget Bill
SAINT PAUL, Minn. – Today, the Minnesota House of Representatives passed SF 2884, the Pensions Budget bill, on a vote of 133-1. The legislation, authored by Rep. Leon Lillie (DFL-North St. Paul) and Rep. Tim O’Driscoll (GOP-Sartell), splits an $160 million global budget target between state aid pension improvements for the Teachers Retirement Association, the Police and Fire Plan, and the State Patrol Retirement Fund.
“This year’s pensions bill is a significant step forward in our work supporting Minnesota’s fantastic teachers, police, and firefighters,” said Rep. Lillie, the House DFL Lead on the Legislative Commission on Pensions and Retirement. “We are improving enhanced early retirement benefits for our teachers and increasing cost-of-living adjustments for those who serve our communities and keep us safe. This is a bipartisan pension budget we can all be proud of.”
SF 2884 improves the Teachers Retirement Association pension plan by lowering the age at which a member becomes eligible for the enhanced early retirement reduction from 62 to 60 and lowering the associated benefit reduction percentage from 6% to 5%.
The PERA Police and Fire Plan will receive $17.7 million in each Fiscal Years 2026-29 to pay for a one-year reduction in the period before a retiree may begin to claim Cost of Living Adjustments (COLA). The COLA is also given a one-time increase to 3% for 2026 and improved to 1% for all years after.
$2.3 million in each of Fiscal Years 2026-29 will go to the Minnesota State Retirement System State Patrol Retirement Fund to pay for a COLA increase to 1.25% annually. The bill also includes a bipartisan fix to the Duty Disability loophole and authorizes a work group to study a new pension plan for probation officers and 911 telecommunicators.
The pensions budget bill passed the Minnesota Senate yesterday with identical language to the one approved by the House today. The bill now heads to Governor Walz for his signature. More information on the bill can be found here.
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