SF4860
Pension adjustment revenue increase for Independent School District No. 625
Legislative Session 94 (2025-2026)
Related bill: HF4812
AI Generated Summary
Purpose
- Update how pension adjustment revenue is calculated and distributed to Minnesota school districts, with a focus on increasing pension adjustment revenue for St. Paul Public Schools (Independent School District No. 625). The change affects how districts receive funds tied to retirement system costs for teachers.
Main provisions
- Definition of pension adjustment revenue:
- For each district, revenue equals the sum of two parts:
1) The greater of zero or the product of:
- The difference between the district’s adjustment under the 2012 law (127A.50, subdivision 1) for fiscal year 2014 per adjusted pupil unit (APU) and the state average adjustment under the same 2012 law for fiscal year 2014 per APU, times the district’s adjusted pupil units for the fiscal year. 2) The product of:
- Salaries paid to district employees who were members of the Teachers Retirement Association (TRA) and the St. Paul Teachers Retirement Fund Association (SPTRFA) for the prior fiscal year, and
- The district’s pension adjustment rate for the fiscal year.
- For each district, revenue equals the sum of two parts:
1) The greater of zero or the product of:
- Pension adjustment rates:
- St. Paul ISD 625: 2.3% (FY 2023); 2.5% (FY 2024 and FY 2025); 3.25% (FY 2026 and beyond through FY 2027); 5.95% (FY 2027 and later).
- All other districts: 1.25% (FY 2025); 2.31% (FY 2026 and later).
- Revenue caps and proration:
- FY 2025: The total pension adjustment revenue for all districts must not exceed the amount calculated for FY 2024; the state must prorate to stay within the maximum.
- FY 2026 and FY 2027: No proration; total must follow the specified calculation.
- FY 2028 and later: The total must not exceed the amount calculated for FY 2027; prorating applies to stay within the maximum.
- Cooperative units:
- Cooperative units (as defined by law) qualify for pension adjustment revenue as if they were districts, and the aid generated must be paid to the cooperative unit.
Significant changes to existing law
- Establishes a new two-part calculation for pension adjustment revenue, tying district revenue to both historical adjustments per APU and current district employee retirement-related salaries multiplied by district-specific rates.
- Creates district-specific pension adjustment rates, notably a higher rate for St. Paul (625) than for other districts, with staged increases over multiple fiscal years.
- Introduces annual caps and prorating rules to limit total pension adjustment revenue in early years and governs how the caps are applied in later years.
- Extends eligibility for pension adjustment revenue to cooperative units, ensuring these units receive funding as if they were independent districts.
Key terms used in the bill
- pension adjustment revenue
- pension adjustment rate
- St. Paul Teachers Retirement Fund Association (SPTRFA)
- Teachers Retirement Association (TRA)
- Independent School District No. 625 (St. Paul)
- adjusted pupil unit (APU)
- cooperative unit
Practical effect
- The bill shifts and increases pension-related funding for St. Paul’s district and related retirement costs, while setting phased-in rates for other districts and adding cooperative units into the funding mechanism. It also introduces safeguards (caps and prorating) to control total state funding for pension adjustments over time.
Relevant Terms pension adjustment revenue, pension adjustment rate, St. Paul Teachers Retirement Fund Association, Teachers Retirement Association, Independent School District No. 625, St. Paul, adjusted pupil units, APU, cooperative unit, prorate, fiscal year, 127A.50.
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 25, 2026 | Senate | Action | Introduction and first reading | ||
| March 25, 2026 | Senate | Action | Referred to | State and Local Government |
Citations
[
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill amends Minnesota Statutes 2024 section 354A.12, subdivision 1, as part of the package relating to retirement and pension adjustment revenue for school districts and related entities (including ISD No. 625). The exact changes to the subdivision are not detailed in the excerpt beyond noting amendment.",
"modified": [
"Amends the statutory framework affecting pension adjustment revenues linked to retirement funding."
]
},
"citation": "354A.12",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill amends Minnesota Statutes 2024 section 354A.12, subdivision 2a, in connection with pension adjustment revenue provisions related to retirement funding.",
"modified": [
"Adjusts the calculation or eligibility framework for pension adjustment revenue consistent with the bill's overall pension reform provisions."
]
},
"citation": "354A.12",
"subdivision": "subdivision 2a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill amends Minnesota Statutes 2024 section 354A.29, subdivision 7, as part of the retirement/pension adjustment revenue provisions affecting districts such as ISD No. 625.",
"modified": [
"Updates or aligns subdivision 7 with the new pension adjustment revenue structure established in the bill."
]
},
"citation": "354A.29",
"subdivision": "subdivision 7"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill amends Minnesota Statutes 2025 Supplement section 126C.10, subdivision 37.1.7, to establish and detail the pension adjustment revenue framework for school districts, including district-specific rates and related prorating provisions.",
"modified": [
"Implements the pension adjustment revenue calculation, including district-specific rates (e.g., ISD No. 625 at higher rates) and annual targets, and introduces prorating rules for certain fiscal years."
]
},
"citation": "126C.10",
"subdivision": "subdivision 37.1.7"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill revises Minnesota Statutes 2025 Supplement section 126C.10, subdivision 37, to set out the pension adjustment revenue calculation and district rates, complementing the changes described for subdivision 37.1.7.",
"modified": [
"Specifies the pension adjustment rates for ISD No. 625 and other districts across fiscal years, and lays out related prorating rules and cooperative unit treatment."
]
},
"citation": "126C.10",
"subdivision": "subdivision 37"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill references Minnesota Statutes 2012 section 127A.50, subdivision 1, as part of the framework for calculating district adjustments used in the pension adjustment revenue calculation.",
"modified": [
"Notes the use of the 2012 version of 127A.50, subdivision 1, in determining district adjustments included in the pension adjustment revenue calculation."
]
},
"citation": "127A.50",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Notwithstanding 123A.26, cooperative units qualify for pension adjustment revenue as if they were districts; aid is paid to the cooperative unit."
],
"removed": [],
"summary": "The bill provides that, notwithstanding section 123A.26 subdivision 1, a cooperative unit qualifies for pension adjustment revenue as if it were a district, and the aid generated shall be paid to the cooperative unit.",
"modified": [
"Expands eligibility for pension adjustment revenue to cooperative units under the same terms as districts."
]
},
"citation": "123A.26",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "The bill references Minnesota Statutes 123A.24, subdivision 2, in the context of cooperative unit provisions related to pension adjustment revenue.",
"modified": [
"Aligns cooperative unit treatment with pension adjustment revenue provisions as described in the bill."
]
},
"citation": "123A.24",
"subdivision": "subdivision 2"
}
]Progress through the legislative process
In Committee