St. Paul Teachers Retirement Fund Association provisions modified, Independent School District No. 625 pension adjustment revenue increased, and money appropriated.

A bill for an act

relating to retirement; modifying provisions relating to the St. Paul Teachers

Retirement Fund Association; increasing the pension adjustment revenue for

Independent School District No. 625; appropriating money; amending Minnesota

Statutes 2024, sections 354A.12, subdivisions 1, 2a; 354A.29, subdivision 7;

Minnesota Statutes 2025 Supplement, section 126C.10, subdivision 37.

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

Section 1.

Minnesota Statutes 2025 Supplement, section 126C.10, subdivision 37, is

amended to read:

Subd. 37.

Pension adjustment revenue.

(a) A school district's pension adjustment

revenue equals the sum of:

(1) the greater of zero or the product of:

(i) the difference between the district's adjustment under Minnesota Statutes 2012, section

127A.50, subdivision 1
, for fiscal year 2014 per adjusted pupil unit and the state average

adjustment under Minnesota Statutes 2012, section
127A.50, subdivision 1
, for fiscal year

2014 per adjusted pupil unit; and

(ii) the district's adjusted pupil units for the fiscal year; and

(2) the product of the salaries paid to district employees who were members of the

Teachers Retirement Association and the St. Paul Teachers' Retirement Fund Association

for the prior fiscal year and the district's pension adjustment rate for the fiscal year. The

pension adjustment rate for Independent School District No. 625, St. Paul, equals
deleted text begin
2.3 percent

for fiscal year 2023, 2.5 percent for fiscal year 2024 and fiscal year 2025, and
deleted text end
3.25 percent

for fiscal year 2026
new text begin
and 5.95 percent for fiscal year 2027
new text end
and later. The pension adjustment

rate for all other districts equals 1.25 percent for fiscal year 2025 and 2.31 percent for fiscal

year 2026 and later.

(b) For fiscal year 2025, the state total pension adjustment revenue under paragraph (a),

clause (2), must not exceed the amount calculated under paragraph (a), clause (2), for fiscal

year 2024. The commissioner must prorate the pension adjustment revenue under paragraph

(a), clause (2), so as not to exceed the maximum.

(c) For fiscal year 2026 and fiscal year 2027, the state total pension adjustment revenue

under paragraph (a), clause (2), must not be prorated.

(d) For fiscal year 2028 and later, the state total pension adjustment revenue under

paragraph (a), clause (2), must not exceed the amount calculated under paragraph (a), clause

(2), for fiscal year 2027. The commissioner must prorate the pension adjustment revenue

under paragraph (a), clause (2), so as not to exceed the maximum.

(e) Notwithstanding section
123A.26, subdivision 1
, a cooperative unit, as defined in

section
123A.24, subdivision 2
, qualifies for pension adjustment revenue under paragraph

(a), clause (2), as if it was a district, and the aid generated by the cooperative unit
deleted text begin
shall
deleted text end
new text begin
must
new text end

be paid to the cooperative unit.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for revenue in fiscal years 2027 and later.

new text end

Sec. 2.

Minnesota Statutes 2024, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid by

each member is the percentage of total salary specified below for the applicable program:

Program

Percentage of Total Salary

deleted text begin

basic program after June 30, 2016, through June 30, 2023

deleted text end

deleted text begin

10

deleted text end

deleted text begin

basic program after June 30, 2023, through June 30, 2024

deleted text end

deleted text begin

10.25

deleted text end

deleted text begin

basic program after June 30, 2024, through June 30, 2025

deleted text end

deleted text begin

10

deleted text end

basic program after June 30, 2025, through June 30, 2026

11.25

basic program after June 30, 2026

11.5

deleted text begin

coordinated program after June 30, 2016, through June 30,

2023

deleted text end

deleted text begin

7.5

deleted text end

deleted text begin

coordinated program after June 30, 2023, through June 30,

2024

deleted text end

deleted text begin

7.75

deleted text end

deleted text begin

coordinated program after June 30, 2024, through June 30,

2025

deleted text end

deleted text begin

7.5

deleted text end

coordinated program after June 30, 2025, through June 30,

2026

8.75

coordinated program after June 30, 2026

deleted text begin
9
deleted text end

new text begin
8
new text end

(b) Contributions must be made by deduction from salary and must be remitted directly

to the association at least once each month.

(c) When an employee contribution rate changes for a fiscal year, the new contribution

rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective July 1, 2026.

new text end

Sec. 3.

Minnesota Statutes 2024, section 354A.12, subdivision 2a, is amended to read:

Subd. 2a.

Employer regular and additional contributions.

(a) The employing units
deleted text begin

shall
deleted text end
new text begin
must
new text end
make the following employer contributions to the teachers retirement fund

association:

(1) for each coordinated member of the St. Paul Teachers Retirement Fund Association,

the employing unit
deleted text begin
shall
deleted text end
new text begin
must
new text end
make a regular employer contribution to the retirement fund

association in an amount equal to the designated percentage of the salary of the coordinated

member as provided below:

deleted text begin

after June 30, 2022

deleted text end

deleted text begin

8.8 percent

deleted text end

deleted text begin

after June 30, 2023

deleted text end

deleted text begin

9 percent

deleted text end

after June 30, 2025
new text begin
, through June 30, 2026
new text end

9.75 percent

new text begin

after June 30, 2026

new text end

new text begin

12.45 percent

new text end

(2) for each basic member of the St. Paul Teachers Retirement Fund Association, the

employing unit
deleted text begin
shall
deleted text end
new text begin
must
new text end
make a regular employer contribution to the respective retirement

fund in an amount according to the schedule below:

deleted text begin

after June 30, 2022

deleted text end

deleted text begin

12.3 percent of salary

deleted text end

deleted text begin

after June 30, 2023

deleted text end

deleted text begin

12.5 percent of salary

deleted text end

after June 30, 2025
new text begin
, through June 30, 2026
new text end

13.25 percent of salary

new text begin

after June 30, 2026

new text end

new text begin

15.95 percent of salary

new text end

(3) for each basic member of the St. Paul Teachers Retirement Fund Association, the

employing unit
deleted text begin
shall
deleted text end
new text begin
must
new text end
make an additional employer contribution to the respective fund

in an amount equal to 3.64 percent of the salary of the basic member;
new text begin
and
new text end

(4) for each coordinated member of the St. Paul Teachers Retirement Fund Association,

the employing unit
deleted text begin
shall
deleted text end
new text begin
must
new text end
make an additional employer contribution to the respective

fund in an amount equal to 3.84 percent of the coordinated member's salary.

(b) The regular and additional employer contributions must be remitted directly to the

St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts

are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district or

technical college employees who are paid from normal operating funds must be made from

the appropriate fund of the district or technical college.

(d) When an employer contribution rate changes for a fiscal year, the new contribution

rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective July 1, 2026.

new text end

Sec. 4.

Minnesota Statutes 2024, section 354A.29, subdivision 7, is amended to read:

Subd. 7.

Postretirement adjustments.

(a) Except as set forth in paragraph (c), each

person who has been receiving an annuity or benefit under the articles of incorporation, the

bylaws, or this chapter, whose effective date of benefit commencement occurred on or

before July 1 of the calendar year immediately before the adjustment, is eligible to receive

an annual postretirement adjustment
deleted text begin
, effective as
deleted text end
of
new text begin
1.5 percent on January 1, 2027, and
new text end

each January 1
deleted text begin
, as follows:
deleted text end
new text begin
thereafter.
new text end

deleted text begin

(1) there shall be no postretirement adjustment on January 1, 2019, and January 1, 2020;

and

deleted text end

deleted text begin

(2) the postretirement adjustment shall be one percent on January 1, 2021, and each

January 1 thereafter.

deleted text end

(b) A postretirement adjustment is to be applied as a permanent increase to the regular

payment of each eligible member on January 1. For any eligible member whose effective

date of benefit commencement occurred after January 1 of the immediately preceding

calendar year, the amount of the postretirement adjustment must be reduced by 50 percent.

(c) Each person who retires on or after July 1, 2024, is entitled to an annual postretirement

adjustment, effective as of each January 1, beginning with the year following the year in

which the member attains normal retirement age.

(d) Paragraph (c) does not apply to members who retire under section
354A.31,

subdivision 6
, paragraph (b), or who retire when the member is at least age 62 and has at

least 30 years of service under section
354A.31, subdivision 7
.

new text begin

EFFECTIVE DATE.

new text end

new text begin

This section is effective for postretirement adjustments beginning

on or after January 1, 2027.

new text end

Sec. 5.
new text begin
EDUCATION APPROPRIATIONS.
new text end

new text begin

Subdivision 1.

new text end

new text begin

Department of Education.

new text end

new text begin

The sums indicated in this section are

appropriated from the general fund to the Department of Education for the fiscal years

designated. These sums are in addition to appropriations made for the same purpose in any

other law.

new text end

new text begin

Subd. 2.

new text end

new text begin

General education aid.

new text end

new text begin

(a) For general education aid under Minnesota Statutes,

section 126C.13, subdivision 4:

new text end

new text begin

$

new text end

new text begin

.......

new text end

new text begin

.....

new text end

new text begin

2027

new text end

new text begin

$

new text end

new text begin

.......

new text end

new text begin

.....

new text end

new text begin

2028

new text end

new text begin

(b) The 2027 appropriation includes $0 for 2026 and $....... for 2027.

new text end

new text begin

(c) The 2028 appropriation includes $....... for 2027 and $....... for 2028.

new text end