Minnesota Legislature approves pension changes for teachers
While it still needs the signature of Gov. Tim Walz, the bill, among other things, includes reform for teacher pensions, lowering the age at which educators can expect to begin their retirement.
"This is a big victory for Minnesota teachers," said Denise Specht, president of the statewide teachers union Education Minnesota. "What we're doing with this bill is an opportunity to retire at the age of 60 with 30 years of experience."
According to the Teachers Retirement Association, educators become eligible to retire as early as age 55. However, the size of their pension would be reduced by a percentage for every year between the time of their early retirement and the normal retirement age of 65.
The TRA, however, stipulated that the reduction to their pension would be smaller if they were at least 62 years old with 30 years of service.
With the passage of Monday's legislation, teachers are now able to take advantage of that same benefit two years earlier at the age of 60.
Although there's still a reduction in the pension for retiring early, the penalty for doing so has also been reduced from 6% to 5% for those who qualify with their age and years of experience.
Teachers and their school districts contribute to teacher pensions. As part of the new legislation, $40 million was also dedicated to the Minnesota Teacher Retirement Association, which is the organization that manages teachers' pension accounts.
Teachers across the state have been advocating for pension reform for years. In 2023, the Legislature lowered the normal retirement age from 66 to 65.
Teachers hired before July 1, 1989, have a career "Rule of 90," which allowed teachers to retire once their age and their years of teaching experience equaled that number. There has been an effort to amend legislation surrounding teachers' pensions in recent years, since teachers who began teaching after the change to the rule in 1989 are now reaching retirement age.
Rochester Education Association President Vince Wagner said that although the new legislation is progressing in the right direction, there are teachers who would like to see even more reform to the system.
"By no means are we done talking about pensions," Wagner said. "It's a step forward."
Monday's legislation is the end result of teachers advocating for pension reform for years.
"This victory could not have happened without the tens of thousands of educators who came together in union to write, call and rally for a retirement benefit that's fair, flexible and sufficient," Specht said in a statement. "This is what educators can accomplish when we work together."
In addition to teachers' pensions, the bill also impacts public safety personnel.
According to a press release from the Minnesota House of Representatives, personnel represented by the Public Employees Retirement Association police and fire, there will be "a three-year cost-of-living adjustment delay once they retire. A year would be taken off in the bill. They would also get a one-time 3% cost-of-living increase in 2026 and 1% annually thereafter. These changes come with a $17.7 million cost in each fiscal year.
"At a cost of $2.3 million per year, every state patrol retiree would get a 1.25% annual cost-of-living increase — up from 1%," the release said.
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