HF2237

Purpose of the Bill

The purpose of this bill is to modify how retirement benefits are calculated for members of the Minnesota State Retirement System. Specifically, it aims to increase the multiplier used to determine the annuity amount for general state employees and adjusts the postretirement benefits for several state retirement plans.

Main Provisions

• Annuity Calculation Changes:
  • For employees who joined the retirement system before July 1, 1989, the retirement annuity will be calculated using 1.2% of the average salary per year of allowable service for the first ten years, and 1.7% for each year thereafter through June 30, 2025. For service after that date, the percentage increases to 1.9% per year.
  • For employees who joined on or after July 1, 1989, similar rules apply, with the 1.7% multiplier rising to 1.9% after June 30, 2025.
• Postretirement Adjustment: The bill proposes an increase in postretirement adjustments for members of the general state employees retirement plan, the legislators' retirement plan, and the unclassified state employees' retirement program.

Significant Changes to Existing Law

• Previously, retirement annuities were calculated at lower percentages (1.7%) for years worked, whereas this bill increases the multiplicative factor to 1.9% for years of service after June 30, 2025.
• Enhances the postretirement benefit adjustments for state employees, potentially resulting in higher annual benefits after retirement.

Relevant Terms

retirement annuity, multiplier, allowable service, average salary, postretirement adjustment, Minnesota State Retirement System