Agenda - Council Work Session - 08/25/2026

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Bill Summary 2026 Pension and Retirement Omnibus Bill (Chapter 106; HF 4074, 3rd Engr.) • Section 5 amends section 354.444, subdivision 3, by adding a new paragraph that states that a member who is at least age 59% may, before the effective date of retirement, enter into a written agreement to return to work. Sections 2, 3, 6, and 7 amend statutes governing TRA's disability benefits. The changes add physician assistants to the providers who can examine members and provide documentation to TRA for disability benefit purposes. Section 8 amends section 354A.011, subdivision 14b, to add a "licensed physician assistant" to the definition of "medical expert," which is applicable to the statutes governing St. Paul Teachers. Section 9 revises the audit requirement for St. Paul Teachers in section 354A.021, such that the audit will be conducted by the state auditor unless the auditor notifies St. Paul Teachers that the state auditor will not conduct the audit for a particular year. For any year that the auditor does not perform the audit, St. Paul Teachers must have an audit conducted by a CPA firm. Section 10 amends section 354A.12, subdivision 1, which sets out the percentage of salary an employee must contribute to St. Paul Teachers. Section 10 reduces the employee contribution rate from 9% to 8% of salary for coordinated members. (The employee contribution rate for basic members is reduced from 11.5% to 10.5% even though there are no active basic members.) Sections 11 and 12 add a new annual direct state aid of $3.4 million to be paid to St. Paul Teachers to fund the cost of reducing the employee contribution rate from 9% to 8%, as provided in Section 10. Section 11 amends section 354A.12, subdivision 3a, to add the new direct state aid. Section 12 amends subdivision 3c, which states that state aid, including this new state aid, will terminate the day after plan assets equal or exceed liabilities (i.e., at least 100% funded) for three years, or July 1, 2048, whichever is earlier. Section 13 revises the report requirement for St. Paul Teachers in section 356.219, subdivision 1, such that St. Paul Teachers does not have to submit a report to the state auditor if St. Paul Teachers is audited by the state auditor or submits to the state auditor an audit that was conducted in accordance with auditing standards generally accepted in the United States. Sections 14 and 15 amend session laws governing TRA and St. Paul Teachers. The changes extend by three years the suspension of the earnings limitation for retirees of TRA and St. Paul Teachers returning to teaching service that is scheduled to expire on January 1, 2029, and, without the extension, would impact annuity payments beginning in 2029. Under section 14, the earnings limitation will not apply to salary earned in fiscal years 2025 through 2030 for teachers covered by TRA, or calendar years 2025 through 2030 for teachers covered by St. Paul Teachers. Annuity payments to re-employed teachers covered by either TRA or St. Paul Teachers will not be deferred or forfeited during calendar years 2026 through 2031. Section 15 extends the expiration of the session law from 2029 to 2032. Sections 10, 11, and 12 are effective July 1, 2026. The remaining sections are effective the day following final enactment. Legislative Commission on Pensions and Retirement Page 5