Stabilizing TRA moved one step closer to passage when all education organizations representing school districts, school boards, active teachers, and retired teachers testified Tuesday in support of SF 2620/HF 3053
Stabilizing TRA is MREA’s #1 legislative goal for this session. In his testimony to the Legislative Commission on Pensions and Retirement (LCPR), MREA Executive Director Fred Nolan pointed out that rural schools are facing a teacher shortage and, “a stable, defined benefit TRA plan is a critical factor in retaining and recruiting teachers.”
He put MREA on record as supporting SF 2620/HF 3053 as presented that evening because it is:
- Aligned with MREA’s platform calling for “shared responsibility” in maintaining a stable defined benefit
- Uses the Pension Adjustment with state aid for all six years of the plan to meet districts’ increased employer contributions.
Fully 40 percent of the stabilization in TRA comes from the reduction in COLA’s from 2% to 1% for five years, and then a slow recovery over years 6-10 to 1.5%.
The endorsement of the plan by retiree organizations including Retired Educators Association of Minnesota (REAM) and Education Minnesota Retired are important factors in moving this through the legislative process.
Education Minnesota Retired supports the bill as it stands, and, if the funding to school districts is approved. Retirees will make a considerable sacrifice in the reduced rate of the Cost of Living Adjustments, which will compound over several years.
MREA members will also support the bill because they remain committed to the students in those classrooms they have left behind and want schools to be able to attract and retain great teachers.
MREA remains committed to high quality education for our Minnesota kids and understands that a good solid defined benefit pension is an important factor in keeping great teachers throughout Minnesota.
Also testifying in support of the bill were Ed Minnesota, whose members will contribute with an increased employee contribution in 2023-24 of .25%, MSBA, AMSD, MASA, SEE and both principal associations.
As positive as this week was for stabilizing TRA, there is a long way to go before this plan into law. To use a sports analogy, we’re in the beginning of the fourth quarter of the biennium and quarterback Rosen, after being bottled up near her own goal line for most of the first half, has come out of the locker room with winning game plan with full support of the team and fans.
She has had a successful bill introduction in both the Senate and House, solid supportive testimony and now needs approval of the Legislative Pension Commission this Tuesday.
It will be important to see the vote on Tuesday of all 14 Commission members.
Securing that will put her on about her own 40-yard line. The next big play will be the Governor’s budget proposal and whether the Governor includes the pensions plan in his budget proposal.
SF 2620 and HF 3053 is a significant investment of state aid in pension contribution. Not only is $18.8 million is in this biennium for TRA and a total of $32.5 million for all funds—10% of the surplus, in the next biennium the state is investing $90 million in TRA and $133 million in all funds. Learn more about SF9037.
This is equivalent to paying forward 1% on the formula in the next biennium, and the increases continue for three years past the next biennium. There are many competing educational needs for state aid including making our schools safer in the aftermath of the Parkland shootings, and the ever increasing SPED cross subsidy.
It will be important for educational organizations including MREA to remember and continue to inform or our legislators that stabilizing TRA is our #1 priority.
Delay simply increases the costs and may have a negative impacts on schools’ credit ratings. Yet funding public employees defined benefit pensions is not a universally supported goal. Learn more