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.) • Subdivision 5 ("Payment by employer") requires the executive director of PERA to determine and notify the City and the eligible person of the amount of the payment required, which is the amount that the former employee and the City would have contributed for the periods in 2016, 2017, and 2018, had the former employee been correctly reported, plus interest. The City must pay the amount determined by PERA in a lump -sum within 60 days of the date on which the executive director notifies the City of the amount of the payment. • Subdivision 6 ("Collection of unpaid amounts") authorizes the executive director of PERA to take action to collect payment under section 353.28, subdivision 6, if the City fails to make the payment under subdivision 5. Section 353.28, subdivision 6, allows the executive director to seek collection by the county auditor or the commissioner of management and budget from property tax revenue or state aid payable to the City. • The effective date states that Section 2 is effective upon approval by the Minneapolis City Council and compliance with section 645.021. Section 645.021 requires that the legislation be approved by the City's governing body and that the City's chief clerical officer file a certificate of approval with the Secretary of State. If the certificate of approval is not filed before the first day of the next regular session of the legislature, the law does not take effect. Article 14: State Board of Investment (SBI) Source: LCPR Amendment 54276-6A Article 14 amends statutes governing the State Board of Investment (SBI) to clarify expense allocation and billing procedures, particularly with respect to the General Fund. Paraphrasing summaries provided to the Commission by SBI, the changes made to Minnesota Statutes, sections 11A.04 and 11A.07, are intended to give the SBI authority to allocate expenses to the state's General Fund in a manner similar to the approach currently applicable to other pools of capital under SBI's management. Under current law, SBI receives a fixed annual appropriation of $139,000 for the expenses associated with the General Fund. Considering the elimination of this fixed annual appropriation, which appears in Section 4 of Article 14, Minnesota Management and Budget estimates that the revenue reduction to the General Fund resulting from the changes in Article 14 will be $643,000 per year. Other changes address the annual settlement process for the payment and reconciliation of the Combined Funds administrative expenses. Currently, Section 11A.07, subdivision 5, paragraph (c), directs the pension funds to pay their estimated yearly portion of administrative expenses at the beginning of each fiscal year. The SBI conducts a reconciliation of the payment against the actual expenses incurred during the year and submits a refund of any surplus to the pension funds. The pension funds then immediately transmit the following year's administrative expense payment to the SBI. To simplify this process, changes in Section 3 provide that any annual surplus may be credited against the next fiscal year's portion of the administrative expenses, rather than the SBI issuing a refund immediately followed by an invoice for the next fiscal year's estimated expenses. Legislative Commission on Pensions and Retirement Page 21