HF4631

Purpose

The bill changes how much employees and employers contribute to the General Employees Retirement Plan (GERP) within the Public Employees Retirement Association (PERA). It sets and updates contribution rates for different member groups and specifies how those contributions are collected and funded.

Who is affected

• Basic members of the General Employees Retirement Plan
• Coordinated members of the General Employees Retirement Plan
• School employees covered by the General Employees Retirement Plan

Main provisions and what the bill changes

• Employee contributions (General Employees Retirement Plan, Subdivision 2)

  • Basic members: employee contribution is 9.10% of salary.
  • Coordinated members: employee contribution equals a base percentage plus any adjustment, with historical rates noted:
  • Effective after December 31, 2010: 6.25%
  • Effective January 1, 2015: 6.50%
  • Plus any contribution rate adjustment under subdivision 3b
  • School employees: a new employee contribution rate is established to take effect July 1, 2026 (specific rate tied to this provision in the bill).
  • Contributions are deducted from salary (as defined in the statute) and must be based on total salary from all sources if any portion of pay comes from non-public funds.

• Employer contributions (General Employees Retirement Plan, Subdivision 3)

  • Basic members: employer contribution is 9.10% of salary.
  • Coordinated members: employer contribution equals a base percentage plus any adjustment under subdivision 3b, with historical rates noted:
  • Effective after December 31, 2010: 6.25%
  • Effective January 1, 2015: 6.50%
  • School employees: a new employer contribution rate takes effect July 1, 2026 (the bill specifies how it must be funded).
  • For school employees, the employer contribution must be made from funds available to the employing subdivision, following the method described in section 353.28.

• Funding and collection details

  • All contributions are made by deduction from salary (as defined in section 353.01 subdivision 10) in the manner provided in subdivision 4.
  • If any part of a member’s salary is paid from sources other than public funds, the member’s contribution must be based on the total salary from all sources.

Significant changes to existing law

• Introduces and clarifies explicit contribution rates for basic, coordinated, and school employee groups.
• Applies a schedule of historical rate levels for coordinated members (6.25% post-2010, 6.5% post-2015) and links further changes to a contribution rate adjustment mechanism (subdivision 3b).
• Establishes July 1, 2026 as the effective date for new rates for school employees, with funding rules tying those contributions to the employing subdivision’s available funds and section 353.28.
• Reinforces that contributions are taken via salary deductions and, when applicable, based on total salary from all sources.

Practical impact (high-level)

• The bill sets concrete contribution percentages for most member groups, and creates a future change point for school employees in 2026.
• It tightens how contributions are calculated when salaries include non-public funds.
• It links school employee contributions to funding rules and the enrolling subdivision’s finances.

Relevant dates to note: December 31, 2010; January 1, 2015; July 1, 2026.

Relevant terms - General Employees Retirement Plan (GERP) - Public Employees Retirement Association (PERA) - employee contribution - employer contribution - basic member - coordinated member - school employees - contribution rate adjustment - subdivision 3b - section 353.01 subdivision 10 - section 353.28 - salary deduction - total salary from all sources - funding from funds available to the employing subdivision - July 1, 2026 - effective dates: 2010, 2015, 2026