Pension Commission Chair and Senator Julie Rosen (GOP-Fairmont) has introduced SF 2620 to get the ball rolling quickly this session on changes needed to the pension funds, including the Teachers Retirement Association (TRA).
Recent attempts to resolve solvency issues with the TRA have failed to pass into law the last two legislative sessions. Pressure is mounting to get TRA back on stable footing this year. Learn more about this issue and what’s needed.
Rosen plans fast action and will meet Tuesday evenings for the next three weeks to review the bill with a goal of sending a final omnibus pension bill to the House and Senate by March 13.
This doesn’t mean the House and Senate leadership will take the bill up right away. More likely they will keep it as leverage on education interests for the remainder of session.
The Pension Commission is a joint House and Senate entity charged with reviewing the various public employee pension plans. This Commission typically originates major legislation related to changes to the various pension plans.
What does the bill do?
Rosen’s bill immediately reduces current retiree cost of living adjustments (COLAs) from 2 percent to 1 percent and then steps them back up one tenth of a percent per year from 2024-2028 to a rate of 1.5 percent.
It raises employee contributions from 7.5 percent to 7.75 percent in 2023-24 (FY ’24).
It steadily increases employer contributions from 7.5 percent to 8.75 percent from July 1, 2018 through 2023-24 (FY ’24).
The bill carries an appropriation aimed at covering the employer increase and uses the pension adjustment to distribute revenues to school districts. The pension adjustment is a more accurate reflection of the employer contribution given differences in salary schedules across the state. Read the TRA exerpt of the bill.
Finding a stakeholder and political consensus on TRA solvency has been difficult. Sen. Rosen’s bill is a strong effort and already has garnered bi-partisan support from DFL Senator Sandy Pappas.
Keeping the coalition together this session will be the key to seeing a major step forward on TRA solvency actually becoming law.