The Retirement Systems of Minnesota provide retirement benefits to retired teachers, firefighters, judges, pilots, and other state and local government employees throughout the state

The new law will immediately eliminate $3.4 billion in unfunded pension liabilities and put the State of Minnesota on a path to fully fund state pensions within 30 years

ST. PAUL, MN – Joined by public servants from across state and local government, Governor Mark Dayton today signed bipartisan legislation (H.F. 3053/S.F. 2620) to ensure Minnesota’s public employee pension plans remain solvent, and that promises are kept to Minnesota workers and retirees. There are currently 173,000 retirees – teachers, firefighters, snowplow drivers, veterans home care workers, and other state and local government employees – and 511,000 total beneficiaries throughout Minnesota who will benefit from the reforms. The new law requires public employees, retirees, and state government to all collectively share the burden of ensuring the long-term solvency of the plans. Making these adjustments now will help ensure that more drastic and painful changes are not needed.

“Hard working Minnesotans who have dedicated their lives and careers to serving our state deserve the security of retirement benefits they have rightly earned,” said Governor Dayton. “This bipartisan legislation stabilizes pension benefits for 511,000 workers, retirees, and their families. I thank members of the pension commission, Legislators, and my terrific MMB Commissioner Myron Frans for securing the bipartisan enactment of these essential reforms.”

Before the enactment of this legislation, the State of Minnesota faced $16.2 billion in unfunded liabilities (future debt) for public pensions. The bill signed by Governor Dayton places the State of Minnesota on a path to fully fund state pensions within 30 years. In addition, the new law will immediately eliminate $3.4 billion in unfunded liabilities to ensure the security of workers’ hard-earned pensions and strengthen the state’s long-term fiscal security.

“Teachers, firefighters, police officers, snowplow drivers, veterans home care workers; public employees provide services that impact every single person in Minnesota,” said Management and Budget Commissioner Myron Frans. “This session, the Governor and the Legislature took a stand in support of these dedicated public servants, approving state contracts and passing meaningful pension reform. Not only will the pension reform signed today ensure all public employees are supported in their retirement, it reinforces Minnesota’s solid fiscal foundation and furthers Governor Dayton’s brand of sound fiscal management.”

The bipartisan legislation directs the State of Minnesota to contribute $27 million in 2019 and $114 million in 2020-21 to stabilize the public employee pension plans. In return, current employees are required to increase their contributions and current retirees will see changes to their cost of living adjustments in future years.

The bipartisan legislation also makes other reforms to ensure the benefits public employees and current retirees have earned remain available for decades to come. The legislation eliminates cost of living adjustments for employees who retire early until they reach normal retirement age, reduces the rate of increase for cost of living adjustments, and adopts more realistic assumptions for investment rates of return.

Protecting Retirement Benefits for 173,000 Minnesotans
The Retirement Systems of Minnesota provide secure retirement benefits to about 173,000 Minnesotans. Each year, the system provides pension benefits totaling $4.1 billion. Approximately 89 percent of recipients remain in Minnesota after retirement, benefiting the local economies of communities throughout the state. Read more below about how the state retirement system benefits Minnesota retirees and communities.