Lawmakers pass bill boosting pensions for Minnesota teachers, police and firefighters

Educators and public safety personnel would benefit greatly from the omnibus pension and retirement bill.

“With the passage of this bill, those Minnesotans that keep us safe and educate our kids will get a significant retirement improvement,” said Sen. Nick Frentz (DFL-North Mankato).

He and Rep. Leon Lillie (DFL-North St. Paul) sponsor HF1889/SF2884*, the omnibus pension bill that checks in at just under $78 million in new 2026-27 biennial spending and calls for $80.6 million more in the 2028-29 biennium.

Passed 133-1 by the House Monday, it now goes to the governor. The Senate passed it 55-12 Sunday.

“This year’s pensions bill is a significant step forward in our work supporting Minnesota’s fantastic teachers, police, and firefighters,” Lillie said in a statement. “We are improving enhanced early retirement benefits for our teachers and increasing cost-of-living adjustments for those who serve our communities and keep us safe. This is a bipartisan pension budget we can all be proud of.”

For public safety personnel who are members of the Public Employees Retirement Association (PERA) Police and Fire Plan, the law reduces the delay in receiving the first cost-of-living adjustment from three years to two. It also provides a one-time, compounded 3% cost-of-living increase in calendar year 2026, which thereafter reverts to the 1% COLA under current law. These changes come with a $17.7 million cost in each fiscal year.

At a cost of $2.3 million per fiscal year, every state patrol retiree would get a 1.25% annual cost of living increase — up from 1%.

[MORE: View the spreadsheet]

The Teachers Retirement Association pension plan would be improved, supporters say, by lowering the age at which a member becomes eligible for the enhanced early retirement reduction from 62 to 60 and lowering the associated benefit reduction percentage from 6% to 5%.

Currently, teachers hired before July 1, 1989, have a career “Rule of 90” (age plus years of service) that provides full pension benefits. Educators hired after that date have no such rule and face significant penalties if they retire and start collecting a pension before age 65.

“This provides a really great option for those teachers who are 60, 61 that need to retire. It reduces their pension discount almost in half. This is a big move,” said Rep. Danny Nadeau (R-Rogers).

“It’s not just those teachers that will choose to use the 60/30 rule to retire, it’s every teacher who can now consider it and decide whether it is best for them,” Frentz said.

It would also increase employer contributions to the Teachers Retirement Association from 9.5% to 9.81% for each coordinated member and from 13.5% to 13.81% for each basic member.

Other proposed changes include:

• for peace officers and firefighters who are members of the Police and Fire Plan and who leave active service due to a duty disability, the period of time that that employers must continue health insurance coverage is capped at 60 months, and once a duty disability determination is made, cities and counties are prohibited from challenging the continuation and payment of health coverage;
• implementing legislation recommended by the MSRS correctional plan eligibility work group, the amortization work group, and the state auditor’s fire relief association working group, which met during the interim;
• for defined benefit firefighter relief associations, increasing the maximum lump-sum pension amount for each year of service from $15,000 to $20,000 annually;
• adding penalties for noncompliance by employers required to participate in the Minnesota Secure Choice Retirement Program;
• requiring a working group to be convened to recommend the features of new pension plans to be administered by MSRS and PERA for probation officers and 911 telecommunicators who are public employees. A report is due to the Legislature by Jan. 15, 2026.

“They are not law enforcement and firefighters, but they deal side-by-side with them in some more dangerous positions than, other people do in the current classifications than they’re in. We’re going to try to right the system by those folks,” said Rep. Tim O'Driscoll (R-Sartell).

Added Sen. Jeff Howe (R-Rockville) in a statement: “This bill may not be the perfect solution all parties were hoping for, but it’s a good step that takes care of our public servants.”