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SF1937 (Legislative Session 94 (2025-2026))

Augmentation of deferred annuities restoral for members who left public employment before January 1, 2019

AI Generated Summary

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.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 26, 2025SenateFloorActionIntroduction and first reading
February 26, 2025SenateFloorActionReferred toState and Local Government

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill modifies the rules for augmentation rates for deferred annuities under section 352.22 for state employees.",
      "modified": [
        "Clarified augmentation rates for employees based on their service start date.",
        "Explicit deadline for non-augmentation after December 31, 2018, is established."
      ]
    },
    "citation": "352.22"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section 352B.08 has provisions affected by this bill regarding augmentation of annuities for a certain period.",
      "modified": [
        "Adjusted the augmentation rules and rates applicable to certain deferred annuities."
      ]
    },
    "citation": "352B.08"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill impacts the augmentation of deferred annuities for public employees under section 353.34.",
      "modified": [
        "Augmentation provisions for public employees are clarified for post-2018 service termination."
      ]
    },
    "citation": "353.34"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section 354.55 mentions modifications in rules concerning annexation for annuities for teachers.",
      "modified": [
        "Adjusted eligibility and augmentation rates for deferred annuities post-2018."
      ]
    },
    "citation": "354.55"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Alterations made in section 354A.37 about teacher's retirement annuity augmentation.",
      "modified": [
        "Defined specific periods and rates associated with augmentation.",
        "Indicated a cessation of augmentation post-2018."
      ]
    },
    "citation": "354A.37"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This section involves actuarial assumptions that impact the adjustment of retirement benefits.",
      "modified": [
        "Introduced updated tables and procedures reflecting a change in investment return assumptions from 5% to 6%."
      ]
    },
    "citation": "356.215"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Use of actuarial practices under section 356.214 in calculating augmentation changes.",
      "modified": [
        "Approved calculations and procedures by the actuary for implementing adjusted augmentation."
      ]
    },
    "citation": "356.214"
  }
]

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