Minnesota
Overview
Major public employee retirement systems in Minnesota include the Minnesota State Retirement System (SRS), the Minnesota Teachers Retirement Association (TRA), and the Minnesota Public Employees Retirement Association (PERA).
Minnesota SRS administers pension and other benefits to state employees and employees of universities, cities, counties, and other political subdivisions that have elected to participate. The system consists of six defined benefit plans and two defined contribution plans.
TRA of Minnesota administers retirement and other benefits to most of the state's public school teachers, administrators, and state college faculty.
Minnesota PERA administers pension and other benefits to employees of approximately 2,000 cities, counties, school districts and other political subdivisions in the state. The system administers three defined benefit plans, the largest of which (Public Employees Retirement Fund) makes up more than 90% of active membership. Other plans exist for public safety personnel and corrections officers. PERA also manages a defined contribution plan for employees of local ambulance services, physicians at public hospitals, and local elected officials.
The assets of Minnesota's state and local defined benefit plans are managed by the State Board of Investment (SBI). The SBI consists of the governor, secretary of state, attorney general, and state auditor.
Plan Design
Defined benefit plans serve as the primary retirement benefit for substantially all public employees in Minnesota.
According to the US Government Accountability Office, 93 percent of employees of state and local government in Minnesota participate in Social Security.
Authorizing Statutes and Board Structure
MN Stat § 352.03 establishes the State Retirement System Board of Directors, which consists of 11 members.
MN Stat § 354.06 establishes the Teachers' Retirement Association Board of Trustees, which consists of 8 members.
MN Stat § 353.03 establishes the Public Employees' Retirement System Board of Trustees, which consists of 11 members.
Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.
Fiduciary Duty/Prudence Standard
MN Stat § 11A.09 pertains to the activities of the State Investment Board:
In the discharge of their respective duties, the members of the state board, director, board staff, and members of the council and any other person charged with the responsibility of investing money pursuant to the standards set forth in sections 11A.01 to 11A.25 shall act in good faith and shall exercise that degree of judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived therefrom. In addition, for the investment of pension fund assets, the members and director of the state board and members of the Investment Advisory Council shall act in accordance with chapter 356A.
MN Stat § 356A.04 pertains to Minnesota retirement systems generally:
Subdivision 1. Duty. A fiduciary of a covered pension plan owes a fiduciary duty to:
(1) the active, deferred, and retired members of the plan, who are its beneficiaries;
(2) the taxpayers of the state or political subdivision, who help to finance the plan; and
(3) the state of Minnesota, which established the plan.
Subd. 2. Prudent person standard. A fiduciary identified in section 356A.02 shall act in good faith and shall exercise that degree of judgment and care, under the circumstances then prevailing, that persons of prudence, discretion, and intelligence would exercise in the management of their own affairs, not for speculation, considering the probable safety of the plan capital as well as the probable investment return to be derived from the assets.
Legal Protections of Retirement Benefits
No explicit constitutional protection for public pension benefits, but courts apply promissory estoppel and contract theories to protect reasonable pension expectations. Housing and Redevelopment Authority of Chisholm v. Norman, 696 N.W.2d 329 (Minn. 2005)(public employer's promise in CBA to pay retiree healthcare premiums was enforceable on contract grounds); Law Enforcement Labor Services, Inc. v. County of Mower, 483 N.W.2d 696 (Minn. 1992)(upon retirement in reliance on the county's promise of pension benefits a retiree's right is vested for the life of the retiree and cannot be altered absent the retiree's express consent); Christensen v. Minneapolis Mun. Employees Retirement Bd., 331 N.W.2d 740 (Minn. 1983)(promissory estoppel precludes arbitrary changes to a retirement plan but recognizing that public interest in modifying pension plan needs to be considered). Courts also provide limited protection against contract impairment based on MN CONST Art. 1, §11. (MN CONST., Article 1, §11) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits
See also the following search tools:
Retirement System Account Interest Policies | Economic Actuarial Assumptions | Retirement and Investment Board Characteristics |
Information about interest rates applied to account balances of inactive plan participants | Assumed rates of investment return and inflation | Composition and characteristics of public retirement and investment oversight boards |
Mortality Assumptions | Plan Design Features | Post-retirement Employment Policies |
Public retirement system actuarial assumptions for mortality | Numerous elements of retirement plan design | Policies governing return-to-work for retirement system annuitants |
More Data
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Population (2024) 5,793,151 |
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Minnesota public pension statistics, |
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Assets |
$95.7 billion |
Active Members |
345,579 |
Annuitants |
269,302 |
Benefits Paid |
$6.1 billion |
Employee Contributions |
$1.5 billion |
Employer Contributions |
$2.5 billion |
Systems |
Three state systems that together account for 98 percent of assets and 96 percent of public pension plan participants in the state. The Census Bureau also reports 434 local systems. |
More Data
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Roll Call (members-only)
Other Resources
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Large Public Pension Plan Investment Report, Office of the Minnesota State Auditor (January 2013)
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Retirement Plan Design Study, Minnesota Statewide Retirement Systems (June 2011)
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Measuring the Impact of Minnesota's Retirement Systems, Andrea Lubov, Ph.D. (March 2008)