SF1937

This bill seeks to restore the augmentation of deferred annuities for members of Minnesota's public retirement systems who left public employment before January 1, 2019. Augmentation refers to the annual percentage increase applied to deferred retirement benefits to help maintain their value over time.

Key Provisions:

1. Covered Retirement Systems:

   • Minnesota State Retirement System (MSRS)
     
   • Public Employees Retirement Association (PERA)
     
   • Teachers Retirement Association (TRA)
     
   • St. Paul Teachers Retirement Fund Association (SPTRFA)
     

2. Restoring Augmentation:

   • Deferred annuities of former public employees who left service before January 1, 2019, will once again receive annual increases.
     
   • The augmentation rates follow past formulas depending on when a person became a public employee.

3. Specific Augmentation Rates:

   • Employees before July 1, 2006:
     
     • 5% until January 1, 1981
       
     • 3% until age 55 or January 1, 2012 (whichever is earlier)
       
     • 5% from age 55 until December 31, 2011
       
     • 2% from January 1, 2012, to December 31, 2018
       
   • Employees after June 30, 2006:
     
     • 2.5% until December 31, 2011
       
     • 2% from January 1, 2012, to December 31, 2018
       

4. Eliminating the Augmentation Freeze:

   • The augmentation rate was reduced to zero percent for employees leaving after December 31, 2018. This bill seeks to restore increases for those who left before that date.

5. Actuarial Adjustment for Pre-1997 Retirees:

   • For individuals who left before July 1, 1997, their benefits will be recalculated on an actuarial equivalent basis to reflect past assumptions about investment return.

Purpose:

The bill aims to protect the value of deferred retirement benefits for individuals who left Minnesota public service before 2019 by reinstating previously promised annual percentage increases.