Legislation

2024 LEGISLATIVE UPDATE

On May 15, 2024, the 2024 Omnibus Pensions and Retirement Bill (HF 5040 / SF 4643) was signed into law. The bill makes several changes affecting TRA members:

Advancing the Change to Normal Retirement Age 65

The Normal Retirement Age (NRA) is the age at which a pension plan member may begin receiving an unreduced benefit. Tier I members, those hired before July 1, 1989, have an NRA of 65. Tier II members, those hired after June 30, 1989, currently have an NRA of 66.

Last year, the 2023 Tax Finance and Policy Bill reduced the NRA for eligible Tier II members from age 66 to age 65, effective July 1, 2025. This year, the 2024 Omnibus Pensions and Retirement Bill (Omnibus Pension Bill) accelerates the NRA 65 effective date to July 1, 2024.

Effective July 1, 2024, the NRA for active and eligible deferred Tier II members will be reduced from 66 to 65. This law change will not apply retroactively to benefits started before July 1, 2024.

The Omnibus Pension Bill also provides a one-time $28.46 million State appropriation to cover the cost of moving the NRA to 65 one year earlier than previously planned.

Please Note: The Omnibus Pension Bill did not change the contribution rate schedule outlined below:

Effective Dates Employer Contribution Rate Employee Contribution Rate
7/1/2023 through 6/30/2025 8.75% 7.75%
7/1/2025 and after 9.50% 8.00%

You May be Wondering….

If I terminate employment before July 1, 2024, will I be eligible for the new normal retirement age of 65?

That depends.

If you are a Tier II member who terminated TRA-covered employment on or before May 24, 2023, you must return to service and earn at least one-half year of service credit to be eligible for the 65 normal retirement age.

If you are a Tier II member who terminated service after May 24, 2023, you will qualify without additional service.

Please Note: Resuming employment in a TRA-covered position, or any other public employment position, for even one day while deferring your retirement, eliminates your eligibility for augmentation. If you are currently deferring your benefit payments and considering a return to public employment, contact TRA to discuss the potential impact on your retirement benefit.

What will my normal retirement age be if I retire before July 1, 2024?

Tier II members who retire before July 1, 2024 have a normal retirement age of 66.

Beginning July 1, 2024, the normal retirement age for all eligible TRA members will be 65. The law change will not apply retroactively to benefits started before July 1, 2024.

Will taking a leave of absence impact my eligibility for the new normal retirement age of 65?

If you are a Tier II member on an approved leave absence on or after May 24, 2023, you are eligible for the 65 normal retirement age.

Extending the Reemployed Annuitant Earning Limitation Suspension

In 2022, a session law suspended the $46,000 earnings limitation for certain retirees who return to work in Pre-K-12 TRA-covered positions for fiscal years 2022, 2023, and 2024.

The Omnibus Pension Bill extended the earnings limitation suspension for three additional years. This means that retirees who return to work in TRA-covered Pre-K-12 positions in fiscal years 2025, 2026, and 2027 will not be subject to an earnings limitation and subsequent retiree benefit withholding in calendar years 2026, 2027 and 2028.

Please Note: The temporary suspension of the earnings limitation does not apply to retirees returning to Minnesota State positions. Both the $62,000 earnings limitation for members approved for the Annuitant Employment Program and the general $46,000 earnings limitation, whichever is applicable, will continue to be enforced for retirees returning to Minnesota State positions.

Post-Retirement Adjustment Delay

The 2018 Omnibus Pension Bill made numerous changes in order to stabilize the financial condition of Minnesota’s public pension plans. One of those changes goes into effect for TRA this summer.

Effective for retirements on or after July 1, 2024:

  • Post-retirement increases will be delayed until the member’s normal retirement age.
  • This does not apply to members retiring at age 62 or older with 30 years of service credit, members retiring under Rule of 90 (Step formula calculation), disability benefit recipients, or survivor benefit recipients.

For additional information on post-retirement adjustments, please visit: Post-Retirement Increases