Local government correctional service retirement plan; employee and employer contribution rates reduced, and postretirement adjustments increased.

A bill for an act

relating to retirement; Public Employees Retirement Association; local government

correctional service retirement plan; reducing the employee and employer

contribution rates; increasing postretirement adjustments; amending Minnesota

Statutes 2024, sections 353E.03, subdivisions 1, 2; 356.415, subdivision 1g.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 353E.03, subdivision 1, is amended to read:

Subdivision 1.

Member contributions.

A member of the plan shall make an employee

contribution in an amount equal to
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6.83
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six
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percent of salary.

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EFFECTIVE DATE.

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This section is effective January 1, 2027.

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Sec. 2.

Minnesota Statutes 2024, section 353E.03, subdivision 2, is amended to read:

Subd. 2.

Employer contributions.

The employer shall contribute for a member of the

plan an amount equal to
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10.25
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nine
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percent of salary.

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EFFECTIVE DATE.

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This section is effective January 1, 2027.

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Sec. 3.

Minnesota Statutes 2024, section 356.415, subdivision 1g, is amended to read:

Subd. 1g.

Annual postretirement adjustments;
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PERA
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Public Employees Retirement

Association;
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local government correctional retirement plan.

(a) Annuities, disability

benefits, and survivor benefits being paid from the local government correctional retirement

plan of the Public Employees Retirement Association shall be increased effective each

January 1 by the percentage of increase determined under this subdivision. The increase to

the annuity or benefit shall be determined by multiplying the monthly amount of the annuity

or benefit by the percentage of increase specified in paragraph (b), after taking into account

any reduction to the percentage of increase required under paragraph (d).

(b) As of each January 1, The percentage of increase must be one percent unless the

federal Social Security Administration has announced a cost-of-living adjustment pursuant

to United States Code, title 42, section 415(i), in the last quarter of the preceding calendar

year that is greater than one percent. If the cost-of-living adjustment announced by the

federal Social Security Administration is greater than one percent, the percentage of increase

must be the same as the cost-of-living adjustment announced by the federal Social Security

Administration, but in no event may the percentage of increase exceed the applicable

maximum percentage in effect on January 1 under paragraph (c).

(c) The applicable maximum percentage in effect on January 1 is
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2.5
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three
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percent,

unless either of the following is true, in which case the applicable maximum percentage is

1.5 percent:

(1) the market value of assets equals or is less than 85 percent of the actuarial accrued

liabilities as reported by the plan's actuary in the most recent two consecutive annual actuarial

valuations; or

(2) the market value of assets equals or is less than 80 percent of the actuarial accrued

liabilities as reported by the plan's actuary in the most recent annual actuarial valuation.
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If,

on January 1 after a year during which the applicable maximum percentage was 1.5 percent,

neither clause (1) or (2) is true, then the applicable maximum percentage is 2.5 percent.
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(d)(1) If the recipient of an annuity, disability benefit, or survivor's benefit has been

receiving the annuity or benefit for at least 12 full months as of the June 30 of the calendar

year immediately before the effective date of the increase, there is no reduction in the

percentage of increase.

(2) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving

the annuity or benefit for at least one month, but less than 12 full months, as of the June 30

of the calendar year immediately preceding the effective date of the increase, the percentage

of increase is multiplied by a fraction, the numerator of which is the number of months the

annuity or benefit was received as of June 30 of the preceding calendar year and the

denominator of which is 12.

(e) An increase in annuity or benefit payments under this
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section
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subdivision
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must be

made automatically unless written notice is filed by the recipient with the executive director

of the Public Employees Retirement Association requesting that the increase not be made.

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EFFECTIVE DATE.

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This section is effective for postretirement adjustments beginning

on or after January 1, 2027.

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