Minnesota lawmakers approve $77.9M funding for police fire and educator retirement plans

In a recent meeting of the Minnesota Senate Committee on Finance, significant discussions centered around proposed changes to retirement benefits for public employees, including police, fire personnel, and educators. The committee outlined a plan to enhance cost-of-living adjustments (COLA) for these groups, which is expected to have a direct impact on their financial well-being.

One of the key highlights was the decision to decrease the COLA delay for police and fire employees by one year, allowing for an immediate 3% increase in 2026. Following this, a 1% increase is projected for 2027. This adjustment is part of a broader effort to provide direct state aid, totaling $17.7 million annually, to support the public employees' retirement plans.

Additionally, the State Patrol Retirement Fund is set to receive an annual appropriation of $2.3 million, contributing to a total of $20 million allocated for public safety retirement plans. The committee also discussed improvements to the Teachers Retirement Association (TRA), which will see changes in how retirement ages and penalties are calculated. Notably, the age for unreduced retirement will be lowered from 62 to 60, and the penalty percentage will decrease from 6% to 5%.

The meeting also addressed funding for educational institutions, with an annual appropriation of $569,000 designated for various agencies associated with TRA members. Furthermore, adjustments to the school payment system will provide additional resources to school districts, amounting to $36.8 million in 2026-27 and $39.3 million in 2028-29.

Overall, the total appropriation for the 2026-27 period is projected to be nearly $78 million, slightly exceeding the target set in the global agreement. These financial decisions reflect a commitment to enhancing the livelihoods of public servants and educators, ensuring they receive the support they need as they approach retirement. The committee's discussions underscore the importance of these adjustments in fostering a stable and secure future for Minnesota's dedicated workforce.