Big News for Minnesota Educators: Pension Reform Bill Signed into Law

  • June 3, 2025

On May 19, 2025, Minnesota lawmakers passed a significant bipartisan pension reform bill and Governor Walz quickly signed it into law, underscoring the urgency and importance of the changes. This is a meaningful win for teachers and other public service workers across the state, strengthening retirement benefits and recognizing the essential work done by Minnesota educators.

What It Means for Teachers

For members of the Teachers Retirement Association (TRA), this legislation brings several positive changes:

  • Earlier Retirement Option: Teachers with 30 years of service can now retire at age 60—two years earlier than before.
  • Lower Early Retirement Penalty: The early retirement penalty has been reduced from 6% to 5%, allowing more financial flexibility for those retiring before full retirement age.

These updates reflect a clear message: Minnesota values the contributions of educators and is committed to providing more options and support for a secure retirement.

Additional Updates for Public Service Workers

While the TRA updates are major, the law also includes benefits for other public employees:

  • Cost-of-Living Adjustments (COLAs):
    • Retirees in the PERA Public Safety plan will receive a one-time 3% compounded COLA in 2026, followed by 1% annually.
    • State Patrol retirees will now receive 1.25% annual increases.
  • Faster COLA Access: Retirees will become eligible for COLAs one year sooner than under the previous rules.
  • Disability Enhancements: Public safety workers retiring on a duty-related disability will receive full wage replacement and five years of health care coverage.
  • Future Considerations: A working group has been established to study potential retirement plans for probation officers and 911 dispatchers.

What This Means for Your Financial Plan

This reform is more than good news—it’s a reminder that your retirement strategy should evolve alongside policy changes. Here are a few ways these updates may impact your plan:

  • Reassess Retirement Age: Retiring earlier with a reduced penalty may shift your ideal timeline.
  • Update Retirement Projections: Adjustments to COLAs and pension benefits should be reflected in your retirement income planning.
  • Review Disability Coverage: Enhanced disability benefits may affect how you plan for long-term care or insurance needs.

We're Here to Help!

These changes offer Minnesota educators new opportunities and more flexibility in planning for the future. At EFS Advisors, we’re proud to specialize in supporting teachers and public employees.

If you’re wondering how this new legislation impacts your personal retirement outlook, now is a great time to connect. Reach out to your EFS advisor or contact us directly to start a conversation and ensure your plan is aligned with the latest updates.