Legislative Commission on Pensions and Retirement

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LCPR News and Developments

 Minnesota Secure Choice Retirement Program – Openings on the Board of Directors

On May 19, 2023, Governor Walz signed into law a bill establishing the Minnesota Secure Choice Retirement Program. Secure Choice is intended to benefit employees in the private sector who have no opportunity to save for retirement through an employer-sponsored retirement plan such as a 401(k) plan. Employers that do not sponsor a retirement plan for their employees are required to transmit a percentage of each employee’s pay to the Program, where it will be deposited into a state-sponsored individual retirement account (IRA) for the employee. Employees have the option to change the contribution percentage or opt out of participation altogether. Employees direct the investment of their accounts into a diversified array of investment funds offered through the State Board of Investment (SBI).

There are currently five vacancies to be filled on the Board of Directors for the Program. Three positions will be appointed by the Legislative Commission on Pensions and Retirement and two positions will be appointed by the Governor. For more information about Secure Choice, the duties of the Board, or to apply for a vacancy, please click here. The board positions are described in the drop-down list under “Open Positions”. Please note that creating an account is required and the materials you submit may be publicly available. Contact Commission staff if you have questions about the positions or completing an application.

 IRAP to TRA Work Group

The LCPR has convened a work group to discuss recommending general legislation that would allow for certain participants in the higher education individual retirement account plan (IRAP), administered by Minnesota State Colleges and Universities, to transfer to the Teachers Retirement Association. The first meeting of the work group took place on July 26, 2023, the second meeting took place on August 28, and the thrid meeting is scheduled for September 26. The agendas and meeting materials can be found here, when avaliable. The work group is mandated under Laws 2023, Ch 47, Art. 7, Sec. 3.

The LCPR has a new Deputy Director!

Sean Kelly joined Commission staff on July 31, 2023, as the new Deputy Director. Sean comes to the legislature from a Minneapolis law firm with a practice focused on representing employees in disputes related to their employment and employee benefits, including retirement benefits. Sean has five years of experience at the firm, most recently as its Case Development Coordinator. He is a graduate of St. John's University and was Managing Editor of the campus newspaper, The Record.

Sean's office is on the 6th floor of the State Office Building. His email address is sean.kelly@lcpr.mn.gov and his phone is 651.296.7820. Welcome, Sean, to the legislature and the wonderful world of public pensions!

The House on Saturday, May 20th, and the Senate, on Sunday, May 21st, passed HF 1938, the omnibus tax bill, which was signed by the Governor on May 23rd as Chapter 64.

The tax bill contains the following pension-related changes (see only the relevant pages of the bill):

• Effective July 1, 2025, normal retirement age is reduced from 66 to 65 for the Teachers Retirement Association and St. Paul Teachers Retirement Fund Association, and paid for with a 0.25% increase in employee contributions and a 0.75% increase in employer contributions, the latter funded by a corresponding increase in state funding to school districts and other state employers.
   
• Effective January 1, 2023, along with a subtraction from federal adjusted gross income for social security benefits, the bill contains a subtraction from federal AGI for up to $25,000 (for married taxpayers and surviving spouses) or up to $12,500 (for all others) of "qualified retirement benefits." "Qualified retirement benefits" are pensions paid to "basic" members, i.e., members whose pensions are based on service for which the member is not also receiving social security benefits such as from the PERA Police and Fire Plan and the MSRS State Patrol Plan. Both subtractions are phased out after $100,000 in AGI for couples and $78,000 AGI for singles.

The Legislature passed and the Governor signed the following bills:

1. Pension Policy Omnibus (HF2950, Chapter 47)
2. Pension Budget Omnibus (HF3100, Chapter 45)
3. Minnesota Secure Choice Retirement Program (HF782, Chapter 46)
4. Public Safety PTSD/Duty Disability (HF1234, Chapter 48)

➤   For the most recent summaries of these four bills, go to the 2023 Pension and Retirement Bills page.
 

Supplemental State Aid Work Group Report submitted to the LCPR.

The State Auditor convened a work group to discuss and articulate to the LCPR options for changing the method of allocating police and firefighter retirement supplemental state aid. The work group and report were mandated under Minnesota Laws 2021, Ch. 22, Art. 9, Sec. 2.

See previous LCPR News articles

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Minnesota News

Study report: Adequacy of Disability Benefits for Minnesota Police Officers.

During the 2022 session, the Minnesota Legislature passed Senate File 1547, a bill requiring the Department of Labor and Industry (DLI) to complete a study of police disability benefit adequacy with the assistance of the Public Employees Retirement Association (PERA). DLI partnered with researchers at the Institute for Urban and Regional Infrastructure Finance from the Humphrey School of Public Affairs at the University of Minnesota to work on completing the study by the designated due date, Jan. 15, 2023. See the report...

 In June 2023, the DLI issued an addendum to the study report that summarizes interviews conducted by DLI's research team of injured police officers and their families. The summaries supplement the findings in the study report with perspectives from the direct recipients of workers' compensation and PERA disability benefits.

State Board of Investment selects Jill Schurtz as next Executive Director and Chief Investment Officer.

The Minnesota State Board of Investment voted on August 24, 2022, to select Jill Schurtz to serve as the Executive Director and Chief Investment Officer, to succeed Mansco Perry III, who is retiring in October. Ms. Schurtz has served as the CIO and Executive Director of the St. Paul Teachers Retirement Fund Association since 2014. The SBI, which oversees over $120 billion in state pension and other funds, consists of Governor Tim Walz, State Auditor Julie Blaha, Secretary of State Steve Simon, and Attorney General Keith Ellison. Read more...

State Board of Investment reports -6.4% investment return for the Combined Funds for the Fiscal Year ending June 30, 2022.

The Combined Funds represent the assets for both the active and retired public employees in the statewide retirement systems, the biggest of which are the Public Employees Retirement Association (PERA), the Teachers Retirement Association (TRA), and the Minnesota State Retirement System (MSRS). The SBI commingles the assets of these plans into the Combined Funds. Read more...

See previous Minnesota News articles

National News

NASRA publishes rate of return assumptions for public pension plans as of February 2022

The National Association of State Retirement Administrators (NASRA) recently published investment return assumptions by plan. Read More...

Sagging Stocks Aren't the Only Threat to Pension Plans (Governing)

The National Conference of State Legislatures (NCSL) on market volatility and the state of the state of public pension funds (and the "smart moves" being made by certain funds to lower their investment ROR assumption).

"Last year, pension plans enjoyed big returns in the market, bringing their balances back to levels not seen since the Great Recession. They are still $1 trillion..." Read more...

See previous National News articles

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