SF5182

Purpose

• This bill would modify how employee and employer contributions are calculated for the General Employees Retirement Plan, which is part of the Public Employees Retirement Association (PERA). It amends Minnesota Statutes 2024 section 353.27 (subdivisions 2 and 3) to establish specific contribution rates and the method of calculating and collecting them, including how they apply to different member groups and when certain rates take effect.

Main Provisions

• General Employees Retirement Plan – employee contributions (Subdivision 2)

  • Basic members: employee contribution set at 9.10% of salary.
  • Coordinated members: employee contribution is a percentage of salary plus any contribution rate adjustment under subdivision 3b; historical reference points include 6.25% effective after December 31, 2010 and 6.5% effective January 1, 2015.
  • School employees: contributions begin with an effective date of July 1, 2026 (specific percentage for school employees not shown in the excerpt).
  • Deductions: contributions must be deducted from salary as defined in section 353.01, subdivision 10, and in the manner provided in subdivision 4.
  • If any portion of a member’s salary comes from non-public funds, the employee contribution must be based on the total salary received from all sources.

• General Employees Retirement Plan – employer contributions (Subdivision 3)

  • Basic members: employer contribution set at 9.10% of salary.
  • Coordinated members: employer contribution is a percentage of salary plus any contribution rate adjustment under subdivision 3b; historical reference points include 6.25% effective after December 31, 2010 and 6.5% effective January 1, 2015.
  • School employees: contributions begin with an effective date of July 1, 2026 (the specific percentage is not shown in the provided text).
  • Funding source and method: these contributions must be made from funds available to the employing subdivision (7.5) by the means and in the manner provided in section 353.28.

• Administrative notes

  • The bill references the deduction method and the requirement to base employee contributions on total salary when any portion is paid from non-public funds.
  • The “contribution rate adjustment under subdivision 3b” is referenced for coordinated members and while the exact mechanism isn’t fully detailed in the excerpt, it indicates a potential adjustment process tied to subdivision 3b.

Significant Changes to Existing Law

• Establishes or formalizes fixed employee contribution rates (9.10% for basic members; related rates for coordinated members) and a framework for school employees with an effective start date of July 1, 2026.
• Aligns employer contributions with the same rate structure (9.10% for basic members; adjustments for coordinated members; future date for school employees).
• Clarifies deduction procedures from salary and how to handle salary earned from non-public funds.
• Ties school employee contribution changes to a future date (July 1, 2026), indicating a staged or phased change rather than immediate implementation.

Relevant Terms - Minnesota Statutes 2024 section 353.27 - General Employees Retirement Plan - Public Employees Retirement Association (PERA) - employee contribution - employer contribution - basic member - coordinated member - school employees - deduction from salary - salary from all sources - contribution rate adjustment under subdivision 3b - effective dates (2010, 2015, 2026) - section 353.28 - subdivision 2 - subdivision 3 - funds available to the employing subdivision - 7.5 (funding mechanism)