Lawmakers pass bill boosting pensions for Minnesota teachers, police and firefighters

Educators and public safety personnel would benefit greatly from the omnibus pension and retirement bill.

“With the passage of this bill, those Minnesotans that keep us safe and educate our kids will get a significant retirement improvement,” said Sen. Nick Frentz (DFL-North Mankato).

He and Rep. Leon Lillie (DFL-North St. Paul) sponsor HF1889/SF2884*, the omnibus pension bill that checks in at just under $78 million in new 2026-27 biennial spending and calls for $80.6 million more in the 2028-29 biennium.

Passed 133-1 by the House Monday, it now goes to the governor. The Senate passed it 55-12 Sunday.

“This year’s pensions bill is a significant step forward in our work supporting Minnesota’s fantastic teachers, police, and firefighters,” Lillie said in a statement. “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.”

For public safety personnel represented by Public Employees Retirement Association police and fire there is a three-year cost-of-living adjustment delay once they retire. A year would be taken off in the bill. They would also get a one-time 3% cost-of-living increase in 2026 and 1% annually thereafter. These changes come with a $17.7 million cost in each fiscal year.

At a cost of $2.3 million per year, every state patrol retiree would get a 1.25% annual cost of living increase — up from 1%.

[MORE: View the spreadsheet]

The Teachers Retirement Association pension plan would be improved, supporters say, 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%.

Currently, teachers hired before July 1, 1989, have a career “Rule of 90” (age plus years of service) that provides full pension benefits. Educators hired after that date have no such rule and face significant penalties if they retire and start collecting a pension before age 65.

“This provides a really great option for those teachers who are 60, 61 that need to retire. It reduces their pension discount almost in half. This is a big move,” said Rep. Danny Nadeau (R-Rogers).

“It’s not just those teachers that will choose to use the 60/30 rule to retire, it’s every teacher who can now consider it and decide whether it is best for them,” Frentz said.

It would also increase employer contributions to the Teachers Retirement Association from 9.5% to 9.81% for each coordinated member and from 13.5% to 13.81% for each basic member.

Other proposed changes include:

• if a public safety member goes out on duty disability they would receive full wage replacement and five years of health care;
• recommendations from a fire relief association working group, including the right to a direct rollover; and
• a working group would be established to recommend a pension plan to be administered by the Minnesota State Retirement System for probation officers and 911 telecommunicators who are state employees. A report is due to the Legislature by Jan. 15, 2026.

“They are not law enforcement and firefighters, but they deal side-by-side with them in some more dangerous positions than, other people do in the current classifications than they’re in. We’re going to try to right the system by those folks,” said Rep. Tim O'Driscoll (R-Sartell).

Added Sen. Jeff Howe (R-Rockville) in a statement: “This bill may not be the perfect solution all parties were hoping for, but it’s a good step that takes care of our public servants.”