Omnibus pension and retirement law

Firefighters, 911 operators and teachers will be affected by the omnibus pension and retirement law.

Sponsored by Rep. Michael Nelson (DFL-Brooklyn Park) and Sen. Julie Rosen (R-Fairmont), the law takes effect July 1, 2021, unless otherwise noted.

The requested changes come from the Legislative Commission on Pensions and Retirement.

Among its provisions, the law will create a working group to consider changes to the pension benefits for 911 operators. A report will be due the pension commission by March 1, 2022. Supporters note 911 operators are not in the correctional plans, which has early retirement, full retirement dates. This section is effective May 26, 2021. (Art. 9, Sec. 1)

Effective June 30, 2021, a working group is to study options for allocating firefighter supplemental aid and report to the commission by Dec. 31, 2022. (Art. 9, Sec. 2)

The law will delay until July 1, 2023, the required employee contribution rate increase from 7.5% to 7.75% of their salary in the St. Paul Teachers Retirement Fund Association to coincide with a similar increase in the Teachers Retirement Association. It is effective May 26, 2021. (Art. 5, Sec. 1)

Other provisions in the law include:

• extending until June 30, 2022, the application of pre-2017 factors used in converting a lump sum to an annuity under the unclassified plan for legislative employees; (Art. 1, Sec. 1)

• beginning Jan. 1, 2022, the Judges Retirement Plan postretirement adjustment will be reduced from 1.75% per year to 1.5% per year and the trigger that automatically increases a cost of living adjustment when certain funding thresholds are met is removed; (Art. 1, Sec. 2)

• effective May 26, 2021, compliance with federal law regarding Minnesota State Retirement System and Public Employees Retirement Association eligibility for H-1B , H-1B1 and E-3 visa holders; (Art. 2, Secs. 1-2)

• current employees and employees who left in the past year are permitted to purchase MSRS service credits for the period they were excluded from coverage; (Art. 2, Sec. 3)

• extending the minimum period from one to three years during which an employee who returns from military service can purchase service credits for a period of military leave, and makes technical changes to PERA statutes; (Art. 3, Sec. 3)

• effective for aids payable in 2022 and thereafter, and only for departments with full-time and volunteer firefighters, municipalities can use part of their fire state aid that would otherwise be paid into PERA’s Statewide Volunteer Firefighter Plan upon filing an aid allocation plan with PERA; (Art. 4, Sec. 2)

• effective Jan. 1, 2022, recommendations from the state auditor’s Fire Relief Association Working Group, including relief associations can eliminate service credit for former firefighters who leave active service before being vested in their pension benefit and do not return to active service within five years; (Art. 6, Secs. 1-8);

• effective May 26, 2021, providing full vesting and distribution of accounts to firefighters assigned to the new Nowthen Fire Department, whose employment with Ramsey is terminated in 2021; (Art. 6, Secs. 9-11)

• effective May 26, 2021, pension funds and agencies must submit bill drafting requests to the Legislative Commission on Pensions and Retirement by Nov. 1; (Art. 7, Secs. 1-4)

• increased pension payments to a former House of Representatives and Labor Department employee who received an erroneous benefit estimate from MSRS; (Art. 8, Sec. 1) and

• transferring about nine years of service credits from the MSRS General Plan to the MSRS Correctional Plan for a current Department of Human Services employee to reflect an error made when he was hired. This is effective May 26, 2021. (Art. 8, Sec. 2)

HF1758/SF1712*/CH22

SF1712* / HF1758 / CH22