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PERA NEWS: EMPLOYER EDITION
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Spring Newsletter | March 2025
Articles in this newsletter:
- 2025 Legislative Update
- Contribution Rate Increases for Correctional Plan
- When DCP Coverage is Mandatory
- No Threshold for Board or Commission Members to Join DCP
- Reminder: Get Updated Proof of Full-Time Student Status
- WEP and GPO Repealed by Social Security Fairness Act
- 2024 GASB 68 Toolkit Now Available
- PERA Board Appointment
- Quick Webinar Topic Survey
- Ask PERA: Applying New Correctional Plan Rates
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Employer Education
- March Q&A Session: Demographics Reporting
- April Webinar: Summer Earnings
- Other Upcoming Webinars
- On-Demand: Maintaining Member Records
- New Video: Exclusion Code Process
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The 2025 legislative session has started.
The Legislative Commission on Pensions and Retirement (LCPR) is expected to meet soon and will hear testimony on Minnesota State Retirement System (MSRS), Minnesota Public Employees Retirement Association (PERA), and Teachers Retirement Association (TRA) administrative bills.
PERA’s legislative agenda for 2025 is focused on administrative and technical changes:
Membership Eligibility Salary Threshold. Clarifies that defined benefit plan membership is mandatory from the date of hire for employees who are expected to earn more than $425 in a month. This means that all full-time and most part-time employees must be enrolled immediately.
Election Period for Optional Membership. Clarifies that the 30-day period to elect optional coverage applies to both defined benefit plans and the Defined Contribution Plan (DCP).
Elected Public Officials. Amends language so that the 30-day period to elect optional coverage begins when an individual takes office, rather than the date they are elected.
Optional Membership Election Forms. Clarifies that completed DCP election forms must be received by PERA within 60 days of the person taking office or starting employment. This gives employers 30 days to submit the completed membership form after the individual’s 30-day election period.
No Contribution Rate Requests. PERA is not seeking contribution rate increases for any plan during this session. The July 1, 2025, Correctional Plan increase was passed in the 2024 session. Refer to the article “Correctional Rate Increase” in this newsletter for more information about that change.
PERA will continue to monitor legislation as it is discussed with the LCPR. The session is expected to end in May. We will provide detailed information about what proposals are passed by the legislature in our next newsletter.
The LCPR website provides information and tracking of retirement-related bills from the Minnesota House of Representatives and Minnesota Senate. Many proposals are introduced throughout the legislative session; however, not all proposals will become law. You can access LCPR’s bill page at lcpr.mn.gov/billlog.
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As part of the legislation passed during the 2024 session,
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Employer contributions for the Correctional Plan will increase 1.5%, from 8.75% to 10.25%.
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Employee contributions for the Correctional Plan will increase by 1%, from 5.83% to 6.83%
It is important to update your payroll systems before July 1, 2025, to correctly apply the new Correctional Plan contribution rates to all pay issued on or after July 1, 2025, regardless of the associated pay period dates.
These are the only contribution rate increases set to take effect in 2025; rates for the General (Coordinated), Police & Fire, and Defined Contribution Plans will not change.
An individual who is first elected or hired to a position eligible for the Defined Contribution Plan (DCP) can make a one-time election to participate in the DCP within their first 30 days of work in the position. This one-time election is permanent and applies to all current and future service with the same employer.
However, if the public official or employee previously had PERA coverage with that same employer, they do not have a choice and must participate in the DCP. An exception may apply for positions that would otherwise require Coordinated Plan membership. Contact us if you have questions.
Example of Mandatory DCP Participation
Former employee Ari was a member of the Coordinated Plan with Township B and was recently elected as a township supervisor. As an elected official for Township B, Ari must participate in the DCP for their earnings as a supervisor. Township B has contributed to another PERA plan on their behalf, therefore Ari’s DCP participation is required to ensure IRS compliance.
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Individuals appointed to a board or commission of a governmental subdivision do not need to meet a minimum earnings requirement to be eligible for the Defined Contribution Plan (DCP).
Before July 1, 2023, only individuals appointed to a board or commission who earned more than $5,100 annually, or $425 monthly before January 1, 2015, were eligible to join the DCP.
Since July 1, 2023, Minn. Stat. 353D.01 Subd. 2 (a) (9) does not require a minimum earnings threshold to join the DCP.
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The full-time student exclusion for employees under the age of 23 can only be used if you have proof of the employee’s full-time student status.
It’s important to have current and updated proof of full-time student status even though you only submit the proof to PERA if we request it. If you do not provide adequate proof when requested, PERA must bill for missing contributions (unless a different exclusion applies).
Explain to student employees they must provide documentation of their full-time student status when they are hired and each semester the full-time student exclusion is used.
To prove they are a full-time student, employees must provide one of the following documents each semester:
If employees do not provide proof of their full-time student status to you each semester, and no other exclusion applies, contributions must be withheld. Immediately enroll the employee in PERA and contact us if there are missing contributions.
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The Social Security Fairness Act repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).
Repealing WEP and GPO does not impact PERA plans and benefits. However, a PERA member’s Social Security benefits may be impacted by the repeal of WEP and GPO if the member is employed in a PERA position that is not covered by Social Security and if they are or were employed in a position covered by Social Security.
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The 2024 GASB 68 Toolkit is now available for your financial reporting. This toolkit includes audit information, templates and suggested footnotes, and PERA reports and schedules.
Please note: several reports were updated on Tuesday, February 25 if you accessed the content prior to this date.
Governor Tim Walz and Lieutenant Governor Peggy Flanagan announced the appointment of two individuals to PERA’s Board of Trustees. The board welcomes David Minke and Barb Johnson.
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David Minke was appointed to a four-year term through January 2029. Trustee Minke is serving as the representative of counties.
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Barb Johnson was reappointed to a four-year term through January 2029. Trustee Johnson is serving as the representative of cities.
You spoke, and we listened! A new PERA website will be launching soon―it includes a separate employer website within mnpera.org designed just for you.
Over the past year, PERA’s Communications and Outreach team worked with a marketing firm to redesign our website to better reflect employer needs and services. The refreshed website will improve navigation and enhance your overall experience.
Website Highlights
Our updated website includes several new improvements:
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Updated navigation. The employer main menu and dashboard landing page have been updated to help you find the information you need easily and efficiently.
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Scannable content. The new website will be scannable, and it will be easier to find important information.
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Improved search. Content will be tagged to create better search results.
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Dashboard pages. You can find the content you need in one place. Each main menu navigation category will have a dedicated dashboard landing page and sidebar menu.
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Responsive design. The website will be responsive to the window size you are viewing our content on. It will be easier to view and navigate our website on your mobile phone, tablet, and desktop.
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Quick Webinar Topic Survey |
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We want your feedback!
We are seeking topic ideas for upcoming employer programs. Your comments will help us determine new content for future PERA education.
Complete the Employer Program Survey to submit your suggestions.
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Due to the increase of Correctional Plan contribution rates effective July 1, 2025, what rates should be applied in the following situations?
- A Correctional member is paid on July 3, 2025 for work performed June 11, 2025–June 24, 2025.
- A Correctional member is paid on July 11, 2025 for work performed June 18, 2025–July 1, 2025.
- A Correctional member is paid on August 31, 2025 for retroactive pay for the period of July 1, 2024–June 30, 2025.
- A Correctional member is paid on September 30, 2025 for payout of banked holiday hours at termination. The holiday hours were earned in 2024 and 2025.
In all the above situations, the new Correctional Plan contribution rates in effect as of July 1, 2025, must be applied to the full salary amount of each check.
Minnesota Statutes require the new rate be used for all pay issued on or after July 1, 2025, regardless of when it was earned, which includes retro pay and any pay earned in prior months.
For contribution withholding, use the check date to determine when the pay was issued.
When does the Correctional Plan contribution rate increase not apply?
The only time the new contribution rate does not apply is when an adjustment is made to correct a prior paycheck. In those situations, use the rate in effect when the original check was issued.
Example: A Correctional member was paid on June 20, 2025, for work performed May 28, 2025–June 10, 2025. Deductions were incorrectly withheld and must be corrected on the next paycheck, which is pay date July 3, 2025. The old rate should only be used to calculate deductions required to correct the June 20, 2025, pay date. All wages paid on the July 3, 2025, check for work performed during the June 11, 2025–June 24, 2025, pay period are subject to the new contribution rate.
Questions regarding the Correctional Plan rate increase should be directed to the Employer Representatives employer.reps@mnpera.org or by phone at 651.296.3636 or 1.888.892.7372 (toll free), option 2.
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Payroll, human resources, and other employer contacts can learn about PERA’s membership and reporting requirements. Attendees can ask questions and receive answers from our Employer Team at the end of each session.
PERA webinars are free to attend, but you must register in advance to access each session.
Q&A Session: Demographics Reporting
Join us for a brief presentation followed by a live Q&A session to learn about demographic reporting. You can drop in at any time to receive expert guidance about how to process your records. This is a great way to connect with us and receive answers to your questions!
Recommended for: Employers who use the electronic upload feature or anyone interested in switching to this process
Topic: Employee demographic reporting
Summer Earnings Webinar
This brand-new webinar is the final part of PERA’s reporting mini-series. You can learn about the Summer Earnings Report that is completed by schools. The report generates when PERA starts paying an estimated monthly benefit for a member; that benefit is based on the member’s highest average salary over 60 consecutive months, or five years. The earnings periods of any summer paychecks must be confirmed as a contract payment or actual hours worked before benefits can be finalized.
Recommended for: School employers and contractors
Topic: Summer earnings of school employees
Other Upcoming Webinars
We are planning additional education programs later in the year:
- Leave Reporting: May/June 2025
- Legislative Updates: Summer 2025
On-Demand: Maintaining Member Records
If you missed the February 27 webinar, it is now available to watch on-demand!
Learn how to accurately report your employees’ enrollment and employment status information.
Please Note: This recording does not have closed captioning automatically appear during the presentation. There is an option to select the closed captioning feature through the GoToWebinar platform. We are currently editing closed captioning and will have an updated version on-demand in the coming weeks.
New Video: Exclusion Code Process
As a PERA-covered employer, you are responsible for determining which of your employees should be excluded from PERA and which exclusion code applies.
In this brand-new video, we will:
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introduce the four levels of exclusion codes,
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describe the exclusion code process from start to finish, and
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explain how to determine which code applies to your employee.
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