SF3547

SF3547 (Legislative Session 94 (2025-2026))

Teachers Retirement Association employer and employee contributions increase and unreduced retirement annuity upon reaching the age of 62 with 30 years of service provision

AI Generated Summary

Purpose

The bill aims to change how retirement benefits are funded for teachers by increasing employee contributions to the Teachers Retirement Association (TRA) and by allowing an unreduced retirement annuity when a member reaches age 62 with 30 years of service.

Main Provisions

Amends Minnesota Statutes 2024 section 354.42(2) to set the employee contribution rate as a percentage of a member’s salary, with different rates for the Basic Program and the Coordinated Program.
Specific employee contribution rates by time period:
- July 1, 2014 – June 30, 2023: Basic 11%, Coordinated 7.5%.
- July 1, 2023 – June 30, 2025: Basic 11.25%, Coordinated 7.75%.
- July 1, 2025 – June 30, 2026: Basic 11.5%, Coordinated 8.0%.
- After June 30, 2026: Basic 11.5%, Coordinated 12.5%.
Rates are applied as payroll deductions and are based on the member’s salary, with the rule that if any portion of the salary is paid from non-public funds, the contribution must be based on the entire salary received.
If a fiscal year rate changes, the new rate applies to the entire salary for the first payroll cycle of that year.
Establishes a provision for an unreduced retirement annuity when a member reaches age 62 with 30 years of service (meaning benefits would be paid at full, unreduced levels at that threshold).

Significant Changes to Existing Law

Introduces a structured, increasing schedule for employee contributions to TRA over multiple time periods, culminating in higher rates for the Coordinated Program after 2026.
Adds a new entitlement: an unreduced retirement annuity at age 62 for those with 30 years of service.
Changes involve amendments to Minnesota Statutes 2024, specifically sections 354.42 (subdivision 2) and 354.44 (subdivision 6) to implement these contributions and benefits.

Administration and Implementation Notes

The changes are described as applying to public employee salaries and are implemented via payroll deductions through employers.
Rates are designed to apply consistently across all employer units within the first payroll cycle of the fiscal year.

Relevant Terms - Teachers Retirement Association (TRA) - Basic Program - Coordinated Program - Employee contribution rate - Employer contributions - Unreduced retirement annuity - Age 62 - 30 years of service - Minnesota Statutes 2024 - Section 354.42 - Section 354.44

Bill text versions

Introduction PDF PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 17, 2026	Senate		Action	Introduction and first reading
February 17, 2026	Senate		Action	Referred to	State and Local Government

Citations

[
  {
    "analysis": {
      "added": [
        "Adds a revised employee contribution schedule with multiple time-period rates for Basic and Coordinated programs."
      ],
      "removed": [],
      "summary": "This bill amends Minnesota Statutes 2024 section 354.42, subdivision 2, to modify the employee contribution rate schedule for the Teachers Retirement Association (TRS) Basic and Coordinated Programs.",
      "modified": [
        "Updates the employee contribution rates in subdivision 2."
      ]
    },
    "citation": "354.42",
    "subdivision": "2"
  },
  {
    "analysis": {
      "added": [
        "Potentially adds provisions aligning subdivision 3 with the new contribution schedule."
      ],
      "removed": [],
      "summary": "This bill amends Minnesota Statutes 2024 section 354.42, subdivision 3, related to the Teachers Retirement Association contribution framework (in the same statute as subdivision 2).",
      "modified": [
        "Adjustments to terms in subdivision 3 to harmonize with revised contribution rates."
      ]
    },
    "citation": "354.42",
    "subdivision": "3"
  },
  {
    "analysis": {
      "added": [
        "Adds or adjusts retirement benefit provisions and unreduced annuity eligibility."
      ],
      "removed": [],
      "summary": "This bill amends Minnesota Statutes 2024 section 354.44, subdivision 6, regarding retirement annuity provisions for the Teachers Retirement Association, including unreduced retirement eligibility.",
      "modified": [
        "Modifies retirement annuity provisions, including unreduced retirement annuity upon reaching age 62 with 30 years of service."
      ]
    },
    "citation": "354.44",
    "subdivision": "6"
  }
]