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Work group considers MSRS subplan for probation officers and 911 telecommunicators after cost estimates
Summary
A Legislative Commission on Pensions and Retirement work group reviewed MSRS deferred‑comp options, proposed subplan design choices (multiplier, retirement age, COLA) and actuarial cost illustrations that show notable contribution increases for affected employees and potential transition costs for the general plan.
A Legislative Commission on Pensions and Retirement work group spent the day reviewing proposals to create a Minnesota State Retirement System (MSRS)‑administered subplan for probation officers and 911 telecommunicators and assessing the financial tradeoffs of moving those employees out of the existing general plan.
MSRS presenter Eron Leonard opened with an overview of the state’s deferred compensation (457(b)) program and emphasized portability, Roth/pre‑tax options and contribution limits (the 2025 under‑50 limit was noted as $23,500). The staff then outlined draft subplan features that stakeholders favor — a 2.0% service multiplier (1.9% as fallback), a target full retirement age of 60 (62 as fallback), early retirement provisions, and a 1.75% cost‑of‑living adjustment until the fund reaches a targeted funded ratio.
Why it matters: actuarial illustrations presented by MSRS and the actuaries show that a subplan with those parameters would raise the total normal cost for covered positions well above the existing general‑plan rate. Erin (MSRS staff) summarized an example in which the subplan’s total required contribution is roughly 18.27% of pay under a 2.0% multiplier and age‑60 retirement, versus the general plan’s total today around 12.25% — a difference of about 6 percentage points that must be addressed through employee contributions, employer contributions, legislative funding, or a combination.
Discussion among members focused on how to manage transition impacts. Doug Anderson, who presented the withdrawal‑liability primer, described two common measurement approaches and used illustrative numbers to show how shifting a group out of the general plan could leave a gap that must be covered by other participants, the departing group, or taxpayers. MSRS staff and stakeholder representatives emphasized options to amortize any transition cost, permit purchase of past service on an actuarial basis, or seek targeted legislative transition aid.
Stakeholders from the probation community presented a memo that prioritizes recognition of public‑safety‑adjacent work, transition assistance for near‑retirees, and the ability to purchase limited past service. PAR staff cautioned that any opt‑out or purchase mechanism must preserve tax‑qualified status and comply with IRS rules (for example, pre‑tax employee contribution rates must align to permit certain elections).
The work group did not vote on a single bill. Staff asked participants to submit draft bill language and clarifications on job classifications (for example, whether certain supervisors or Metro Transit positions should be included). Members asked for additional analysis on counts by age and service so the legislature can weigh dollars against policy choices. The group scheduled follow‑up meetings to refine draft language and definitions.
