|
PERA NEWS: EMPLOYER EDITION
|
|
Winter Newsletter | December 2024
Articles in this newsletter:
- No Change to Contribution Rates January 1, 2025
- New Public Officials: 30 Dates to Elect Coverage
- Local Government Employers: Prepare for Calendar Year 2024 Reports
- Final Reminder: EFT Required for Most Employers as of January 1, 2025
- 2025 IRS Compensation and Contribution Limits
- Minnesota Paid Leave Starting in 2026
- Board of Trustees Seeking Candidates
- Ask PERA: Why is it important to regularly update our contact information?
-
Employer Education
- Upcoming Webinar: Maintaining Member Records
- On-Demand Employer Education
|
|
No Change to Contribution Rates January 1, 2025
Contribution rates do not change in 2025 for PERA’s General/Coordinated Plan, the Police & Fire Plan, and the Defined Contribution Plan.
Correctional Plan Rates Change in July 2025
The Pension and Retirement Policy and Supplemental Budget Bill, House File 5040, changed Correctional Plan contribution rates for all pay issued on or after July 1, 2025. No other plans will have a contribution rate change on this date.
|
Current
|
Effective July 1, 2025
|
Member
|
5.83%
|
6.83%
|
Employer
|
8.75%
|
10.25%
|
The Correctional plan multiplier also increases from 1.9% to 2.2% for service credit earned on or after July 1, 2025.
To learn more about current and historical contribution rates, visit the Contribution Rates page on our website.
Public officials newly eligible for optional PERA membership with an employer must sign the Membership Election Form within 30 days of their first day of work.
Do not withhold contributions until the official has made a written selection to participate in part B of the form. The completed form must be received by PERA within 60 days of their first day of work.
Individuals who do not make a decision within the 30-day period will be automatically opted out of optional PERA membership. Either election is final for all current and future service in optional PERA membership positions with that employer.
|
Membership Election Form Key:
Difference between Governing and Non-Governing
-
NON-GOVERNING does not vote on decisions.
- Examples: city or township clerk or treasurer, county auditor, or county attorney.
-
GOVERNING is a voting member of the governmental body.
- Examples: township supervisor, city council, school board, soil and water board, or county commissioner.
*Monitor the monthly pay of appointed or hired non-governing public officials who are not enrolled in the Coordinated Plan. If their monthly pay exceeds $425 in any month, Coordinated Plan contributions must begin immediately and DCP contributions must stop.
Two important annual reports are due soon from local government employers.
Annual Leave Report due January 31, 2025
Employers with one or more active PERA members must complete an Annual Leave Report. The report must list all authorized leaves that occurred in calendar year 2024 that resulted in any unpaid time. You must complete an Annual Leave Report even if there were no employees with an authorized leave during the year.
To learn more, review Chapter 9 of the Employer Manual or click the button below to watch our 2022 Leave Reporting webinar. Other recorded presentations and Q&A documents are available on the Employer Programs page of our website.
|
Annual Exclusion Report due February 28, 2025
All PERA-eligible local government units must file an Annual Exclusion Report. The report must list employees and elected officials who worked any amount in 2024 who did not have pension deductions withheld from their earnings.
As a reminder, the Annual Exclusion Report must include all public officials who are not participating in PERA.
Use exclusion code 201 for elected officials and individuals appointed to a board or commission of a governmental subdivision, including governing body elected positions such as city council, county commissioner, and township supervisors.
As of January 1, 2025, all employers who remit contribution payments of $1,500 or more for a single pay period will be required to use Electronic Funds Transfer (EFT) instead of mailing a paper check.
EFT is a secure and convenient way for employers to send a payment directly from their bank accounts to PERA’s account without writing a check. It provides added control because you choose the day funds will be deducted from your account and eliminates the risk of mailing delays.
There are two types of EFT— the ACH Credit method and the ACH Debit method:
-
ACH Debit Method: Uses PERA’s contracted vendor and allows you to authorize your EFT payment using either a special Internet system or an automated phone service.
-
ACH Credit Method: Uses either your own self-developed application or the software program of a financial institution. This process requires you to prepare and send a file to your bank in a specified format.
To begin using EFT, please call PERA. Generally, it takes two weeks to complete the enrollment process.
While PERA encourages EFT use for all employers, we will continue to accept paper checks from smaller-sized employers with less than $1,500 in contribution payments per pay period.
|
Restrictions Affect Small Percentage of Employees
The Internal Revenue Service (IRS) limits compensation applied to PERA defined benefit plans (DBP) and contributions made to the PERA Defined Contribution Plan (DCP). The limits are defined in IRC § 415 of the Internal Revenue Code (IRC) and are adjusted annually.
Although federal compensation and contribution limits affect a small percent of covered employees, employers and PERA are required to monitor each member’s salary and retirement contributions against the 2025 compensation and contribution limits.
2025 IRS Compensation Limits: DBP Members
IRC § 401(a)(17) limits compensation subject to retirement contributions.
PERA’s DBPs include the Coordinated, Correctional, and Police & Fire Plans. The compensation limits for individuals who first became a DBP member are listed below:
- On or after July 1, 1995: $350,000
- Before July 1, 1995: $520,000
To ensure continued IRS compliance, PERA evaluates
2025 IRS Contribution Limits: DCP Members
IRC § 415(c)(1)(A) limits the annual contributions a person can make to a defined contribution plan. For 2025, the contribution limit is $70,000. The retirement contribution limit represents the annual maximum amount of combined DCP employee and employer contributions that can be credited to a member.
Please monitor employee and employer contributions to ensure the total does not exceed the annual maximum of $70,000 in 2025.
Excess Salary or Contributions
If PERA finds that an employer has reported compensation or contributions that exceed these limits, we will contact you to coordinate an adjustment or refund.
Minnesota Paid Leave (MPL) is a new program administered by the Minnesota Department of Employment and Economic Development. Effective January 1, 2026, MPL will provide Minnesota employees with paid time off when a serious health condition prevents them from working, if they need time to care for a family member or a new child, for specific military-related events, or for certain personal safety issues.
PERA reviews existing statutes to determine how new benefits are addressed. Eligible salary for PERA contributions is determined by Minn. Stat. § 353.01, subd. 10 and discussed in Chapter 5 of PERA’s Employer Manual. These resources predate MPL, as well as the prior Earned Sick and Safe Time (ESST) law and COVID-era bonus pay, but the overall concepts apply and provide guidance for each situation.
-
According to the Minnesota Paid Leave website and the Frequently Asked Questions page, the MPL benefit is paid directly by the State to employees and is therefore NOT PERA-eligible salary. The website has not provided a calculation for benefit amounts yet.
-
Employers may offer the use of paid time off as “supplemental benefits” to allow the employee to receive up to full salary continuation during their leave. This salary is only PERA-eligible if it is medical leave and the employer-paid benefits are at least 50% of the employee’s regular earnings.
Employer Action for Minnesota Paid Leave
Report MPL absences as authorized leaves on your Annual Leave Report if they result in any unpaid hours on your employer payroll. For PERA purposes, treat MPL payments as you would short or long-term disability payments—which are not PERA-eligible salary. There is an Annual Leave Q&A publication on our website that supplements the “Leave Reporting” webinar. Review Section B – What to Report and pay close attention to questions B1–B7.
Our Employer Education team will plan an updated webinar for 2025 that includes Earned Safe and Sick Time (ESST) and MPL presentation topics.
|
PERA has two opportunities to serve on the PERA Board of Trustees! These positions are for a four-year term and appointed by the governor.
Two appointments are available: City Representative and County Representative.
HOW TO APPLY: Apply online using the Office of the Secretary of State’s website, sos.state.mn.us, under Boards and Commissions -> Open Positions.
|
As a recorded PERA employer contact, you are required to receive communication from PERA to stay current on important updates and reporting information.
We will be sending you communication by email through the govDelivery communication tool. If you unsubscribe, we will re-subscribe you.
If you are no longer a PERA employer contact, you must remove your contact information from ERIS. Contact your organization's ERIS administrator to update your assigned contact role.
|
|
Why is it important to update employer contact information regularly?
Maintain accurate contact information with PERA to ensure smooth communication and efficient service.
When your organization experiences a staffing change or a shift in responsibilities, update PERA with the correct contact information to prevent processing delays for contributions, reports, and other important tasks.
Each employer contact must have their own ERIS login credentials. Individual logins should not be shared between staff. This is not only best practice—it is also a safeguard for your organization. When updates or changes are made in ERIS, the username of the person who is logged in is recorded as a digital signature, providing clear accountability and a traceable record of the action.
Thank you for helping us serve you better! If you have questions about updating contacts or creating ERIS accounts, contact PERA at 651.296.3636 and select option 4, or email ERISResponses@mnpera.org.
|
|
|
This brand-new webinar is part 2 of PERA’s reporting mini-series.
Topics include:
- Enrolling members through ERIS
- Updating member employment statuses
- Periodic reports to maintain member information
Recommended for: Payroll, HR, and business managers that are new to PERA
When: Thursday, February 27
Time: 11:00 a.m.
Length: 1 hour and 30 minutes (45 minutes of presentation and 45 minutes for questions)
|
On-Demand Employer Education
PERA has a library full of on-demand webinars that you can watch at your convenience.
These webinars and helpful supplemental materials are available on the Employer Programs page of our website.
Each webinar focuses on a different topic for employers:
Guide to Reporting Salary
Learn how to complete and submit the Salary Deduction Report (SDR).
2024 Legislative Update
An overview of the 2024 Legislative Session, including changes to DCP election rules and P&F Plan eligibility.
Understanding ERIS
Learn how to complete your PERA reporting tasks using the Employer Reporting and Information System (ERIS).
Intro to PERA Eligibility
Learn what qualifies an employee for PERA membership, and what excludes an employee from PERA membership.
2023 Legislative Update
An overview of the 2023 Legislative Session, including changes to membership eligibility and extension of the leave purchase period.
2022 Leave Reporting Webinar
This webinar was held one year after the new Annual Leave Report was rolled out. We considered employer feedback and updated this educational program to help clarify instructions, address common frustrations, and improve the overall process for employers.
|
|
|
|
|