On May 23, 2025, the 2025 Omnibus Pension and Retirement Bill (SF 2884 / HF 1889) was signed into law. The bill made several changes that affect TRA stakeholders.
60-and-30: The 2025 Omnibus Pension and Retirement bill changed TRA’s 62-and-30 early retirement provision. Now, eligible members who are age 60 or older with 30 years of service and choose to retire before their normal retirement age will receive a lower set of reduction factors under the Level formula.
- The reduction factor is now 5% with augmentation instead of 6% with augmentation.
Postretirement increase delay: Effective June 30, 2025, all new TRA retirees have a post-retirement increase delay until the January 1st following the year in which they reach normal retirement age. Sometimes referred to as a “cost of living adjustment” or “COLA,” this is an annual, compounding benefit increase for eligible benefit recipients.
Employer contribution rate increase: The changes noted above were funded through a combination of contribution increases and cost absorption. Approximately $20 million per year in additional State dollars will pay for a 0.31% employer contribution rate increase. The remaining 0.26%-of-payroll cost was absorbed by the TRA fund.
On July 1, 2025, the 0.31% employer contribution rate increase from the 2025 Omnibus Pension and Retirement Bill went into effect. In addition, the 0.25% employee contribution rate increase passed by the Minnesota Legislature in 2023 went into effect. This helped pay for the cost of reducing the normal retirement age (NRA) from 66 to 65, effective July 1, 2024.
The contribution rate schedule outlined below shows the updated Employer Contribution Rate for July 1, 2025, and after.
| Effective Dates | Employer Contribution Rate | Employee Contribution Rate |
|---|---|---|
| 7/1/2023 through 6/30/2025 | 8.75% | 7.75% |
| 7/1/2025 and after | 9.81% | 8.00% |
Please review the following frequently asked questions for the answers to common inquiries. If you require further assistance, contact us.
FAQs – 2025 legislative changes
- Those who did not terminate service before May 23, 2025, or who were on an approved leave of absence through May 23, 2025.
- Those who are active in the TRA fund or in another Minnesota state-sponsored fund through the law’s date of enactment:
- Minnesota State Retirement System (MSRS)
- Public Employees Retirement Association (PERA)
- St. Paul Teachers’ Retirement Fund Association (SPTRFA)
- Effective June 30, 2025, new TRA retirees who are younger than their normal retirement age will be subject to a postretirement increase delay. Those individuals will first be eligible for a postretirement increase on the January 1st following the year in which they reach their normal retirement age.
- Individuals receiving TRA disability or survivor benefits are not subject to this delay. This expanded post-retirement increase delay does not apply to individuals who commence receiving TRA disability or survivor benefits on or after June 30, 2025.
- myTRA is the tool members use to calculate their benefit estimates online.
- The myTRA estimate calculator produces retirement benefit estimates that reflect the 2025 legislative changes, including TRA’s 60-and-30 early retirement provision.
- No, they are not equivalent. The formula used to calculate member benefits under the new 60-and-30 law uses benefit factor percentages that are more favorable for members than the 62-and-30 provision. Since the new 60-and-30 early retirement provision is for members who have not yet reached normal retirement age, it offers a reduced benefit. The previous 62-and-30 early retirement provision was also a reduced benefit.
- Contact TRA to request an accurate retirement benefit estimate. The benefit calculation process is nuanced, and TRA is the best source of accurate information.
- Your TRA defined benefit plan provides a lifetime monthly retirement benefit. The benefit calculation is based on age at retirement, service credit, and high-five average salary.
- Service credit is used for vesting and to calculate monthly benefits. Paid sick leave, vacation days, and required attendance days count toward service credit.
- You cannot earn more than one year of service during any fiscal year. Service credit for part-time teaching, extracurricular pay, retro pay, and summer pay is prorated.
PreK-12: Service credit is calculated using a member’s salary relative to an “annual base salary.” If you are a PreK-12 teacher, “annual base salary” is the lowest Bachelor of Arts (BA) level, full-time teacher base contract salary in your district.
- Service credit is calculated by dividing your monthly salary by your employer unit’s monthly base salary. This number is multiplied by .111 to determine the monthly service credit. Service credit is capped at .111 per month.
- Annual service credit is calculated by adding monthly service credit amounts during the fiscal year. No more than one year of service is credited during a fiscal year.
- TRA members need to determine the “annual base salary” for their district to calculate the service credit. If a member works for more than one district, they would need to obtain the “annual base salary” for each different district to perform their calculations.
Minnesota State: Full-time service credit for Minnesota State members is determined by the definition of full-time employment in the Minnesota State collective bargaining agreement or in the applicable personnel or salary plan. Part-time service credit is the proration of equivalent full-time service.
- Your eligibility for this benefit change depends, in part, on your status as of the 2025 law’s enactment date, which was May 23, 2025.
- If you terminated from TRA-covered service before May 23, 2025 and were not active with another Minnesota public pension plan (MSRS, PERA, or SPTRFA), then you must return to covered service with TRA or another Minnesota public pension plan and earn at least one-half year of service credit in order to be eligible for the law change.
- If you were active with another Minnesota public pension plan on May 23, 2025, then you are considered eligible, provided you meet the age and service requirements.
- If you were on an approved leave of absence from your TRA-covered position on May 23, 2025, you are considered eligible for the benefit changes, provided you meet the age and service requirements.
- If you were on an approved leave of absence from your TRA-covered position on May 23, 2025, you do not need to purchase your leave of absence service credit to be eligible for the new 60-and-30 provision.
- TRA can provide estimates that would show your estimated TRA benefit with and without the purchase of service credit for a leave of absence.
- Any leave of absence that occurred prior to 2007 is ineligible for service credit purchase.
Each of Minnesota’s defined-benefit pension plans is administered differently. While new legislation introduces TRA’s 60-and-30 provision, the other plans have different benefit provisions. Contact Minnesota’s other defined-benefit plan(s) in which you are a member to learn about their specific parameters:
- Minnesota State Retirement System (MSRS)
651.296.2761 | 800.657.5757 | mnretire.gov - Public Employees Retirement Association (PERA)
651.296.7460 | 800.652.9026 | mnpera.org - St. Paul Teachers’ Retirement Fund Association (SPTRFA)
651.642.2550 | sptrfa.org
To understand your combined service annuity, you need to reach out to each fund individually and request a benefit estimate from all funds with the same benefit effective date.
Contact Minnesota’s other defined-benefit plans at:
- Minnesota State Retirement System (MSRS)
651.296.2761 | 800.657.5757 | mnretire.gov - Public Employees Retirement Association (PERA)
651.296.7460 | 800.652.9026 | mnpera.org - St. Paul Teachers’ Retirement Fund Association (SPTRFA)
651.642.2550 | sptrfa.org
Minnesota Statutes section 354.44, subdivision 9 states that “[a] former teacher who returns to covered service following a termination and who is not receiving a retirement annuity under this section must have earned at least one-half year of credited service following the return to covered service to be eligible for improved benefits resulting from any law change enacted subsequent to that termination.”
- Teachers with at least three years of allowable TRA service credit are entitled to purchase up to five years of allowable and formula service credit for periods of service as an elementary or secondary public or charter school teacher in another state.
- Request and submit an Out of State Purchase application to ensure eligibility to make a purchase and receive an actuarial cost to make that purchase.
- You should request estimates from TRA that would show your benefit with and without the purchased service credit to make an informed decision.
- Payment must be made by your termination of teaching service.