Minnesota committee approves $77.9M for police, fire, and educator pension reforms

In a recent meeting of the Minnesota Legislature's Committee on Finance, significant discussions centered around pension adjustments and funding for public safety and education sectors. The meeting, held on May 17, 2025, highlighted key financial appropriations aimed at enhancing benefits for police, fire personnel, and educators.

One of the most notable outcomes was the decision to decrease the cost-of-living adjustment (COLA) delay for police and fire retirement plans by one year, resulting in an immediate 3% COLA increase for the calendar year 2026. This adjustment is expected to provide substantial financial relief to these public safety employees, with an additional 1% COLA increase planned for 2027. The state will allocate $17.7 million annually to support this initiative, alongside a $2.3 million increase for the State Patrol Retirement Fund.

The meeting also addressed significant changes to the Teachers Retirement Association (TRA) benefits. The committee proposed improvements to the retirement calculation methods, allowing teachers to retire with unreduced benefits at age 60 instead of 62. This change reduces the penalty percentage for early retirement, reflecting a commitment to support educators. The total appropriation for these adjustments is estimated at $569,000 annually for various educational agencies, with school districts responsible for the remaining costs.

Furthermore, the committee discussed a pension adjustment revenue stream aimed at providing additional resources to school districts, amounting to $36.8 million in 2026-2027 and $39.3 million in 2028-2029. This adjustment is crucial as it addresses the complexities of school finance, which operates on a lagging payment schedule.

Overall, the total appropriations discussed during the meeting reached approximately $77.9 million for the 2026-2027 period, with projections of $80.6 million in subsequent years. These figures slightly exceed the targets set in the global agreement but remain within acceptable limits over a four-year basis.

As the committee prepares to finalize the bill, members expressed anticipation for the upcoming engrossments and further details on the proposed improvements. The discussions underscored a collective effort to enhance the financial security of public employees and educators, reflecting the state's commitment to supporting its workforce.