Employer and employee pension contributions will be adjusted in an attempt to help state employee and teacher pension funds reach financial sustainability, under a new law.
Sponsored by Rep. Mary Murphy (DFL-Hermantown) and Sen. Don Betzold (DFL-Fridley), the law makes adjustments to several retirement accounts, including the Minnesota State Retirement System plan that covers more than 50,000 active employees and currently pays monthly benefits to over 20,000 retirees, survivors and disabled employees.
Other affected plans include: General Employees Retirement Plan for the Public Employees Retirement Association, Teachers Retirement Association, Duluth Teachers’ Retirement Fund Association, St. Paul Teachers’ Retirement Fund Association, Minneapolis Employees Retirement Fund and the State Patrol Plan.
The law adjusts the inflow and outflow of money by using various strategies, including reducing cost-of-living adjustments, reducing interest on deferred benefits and eliminating interest on re-employed retiree accounts. Administrative functions of MERF and PERA are merged in the law.
Murphy said the state made a promise to public employees in their pension plans and it should be kept.
The law has various effective dates.
HF3281/
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