No Change to Contribution Rates January 1, 2026
Contribution rates do not change in 2026 for PERA’s General/Coordinated Plan, the Police & Fire Plan, the Correctional Plan, and the Public Employees Defined Contribution Plan.
To learn more about current and historical contribution rates, visit the Plan Rates page on mnpera.org/employers.
Membership in the Public Employees Defined Contribution Plan (Public Employees DCP) is optional for public officials in their first 30 days of work with that PERA employer.
Participation in Public Employees DCP
To participate in optional PERA membership,
Definition for First Day of Work: The first day of work is the first day that the public official performs work in which they earn pay. It is not necessarily the day the public official is sworn in nor the day they are elected or appointed—unless they have earnings as a public official at that time. Return the completed Membership Election Form for Public Officials to PERA even if the public official did not sign it or if they selected no PERA coverage. Individuals who do not make a decision within the 30-day period will be opted out of optional PERA membership for all current and future service with that employer.
If the public official previously had PERA coverage with the same employer that they are now a public official for, they must participate in the Public Employees DCP. An exception may apply for positions that would otherwise require Coordinated Plan membership.
Public Official Eligibility Overview
To learn more about PERA eligibility for public officials, refer to the Public Official Eligibility Overview or Chapter 4 of the Employer Manual. A recording of the Public Official Eligibility webinar will be available soon at mnpera.org/employers > Resources > Employer Programs.
Questions?
Contact us if you have any questions. Our contact information can be found on our Employer Contact page on mnpera.org/employers.
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Paid Family and Medical Leave (PFML) is a new program administered by the Minnesota Department of Employment and Economic Development (DEED) effective January 1, 2026. Using PFML, eligible Minnesota employees with qualifying events receive payments and job protection. Pay that an employee receives during their leave may be eligible for PERA contributions.
PFML Payments Are Not Eligible Salary
PFML payments are not eligible for PERA contributions because PFML payments are not PERA-eligible salary. Minnesota statue determines which payment types are eligible salary. PFML payments are like disability insurance payments and workers’ compensation payments—both of which are ineligible salary under Minn. Stat. § 353.01, sub. 10 (b)(7).
Even though PFML payments are not specifically named in the statutes that govern PERA, employers must treat PFML payments as ineligible salary—whether the payment comes from the State, a private vendor, or an employer with a plan equivalent to the State’s. PERA is proposing legislation to list PFML payments as ineligible salary in statute effective January 1, 2026.
Used PTO May Be Eligible Salary
Used PTO may be eligible for PERA contributions.
- PTO used for workers’ compensation leave is eligible for PERA contributions when that PTO increases the employee’s salary up to 100% of their regular average salary.
- PTO used for medical leave is eligible for PERA contributions when:
- an employee uses all their PTO in a pay period, or
- an employee uses some but not all of their available PTO to increase their salary to 50% or more of their regular average salary in a pay period.
- PTO used for non-medical leave is eligible for PERA contributions when:
- an employee uses all their PTO in a pay period, or
- an employee uses some but not all of their available PTO to increase their salary to 100% of their regular average salary.
With the support of our board of trustees, PERA is proposing legislation for all used PTO to be eligible for PERA contributions as of July 1, 2026. The legislative session begins February 17, 2026; we will inform you of any updates. At this time, follow PERA’s current guidance regarding used PTO salary eligibility and wait for the updated legislation to be in effect before making any changes to your processes.
Pay from Time Worked Is Eligible Salary
Pay from hours worked during an intermittent leave is PERA-eligible salary. In addition, if the leave is not for workers’ compensation and the employee is also using PTO at a reduced rate during that pay period, add the used PTO pay to the pay from hours worked. If the total is at least 50% of the employee’s regular pay during a medical leave, or 100% of the employee’s regular average salary during a non-medical leave, the used PTO is also PERA-eligible salary.
Report Unpaid Hours Or Ineligible Pay Annually
Do not update an employee’s status for PFML; military leaves are the only leave type you must report as an employment status change. Report leaves that resulted in unpaid hours or ineligible pay on the Annual Leave Report. Only include the number of hours that were unpaid or had ineligible salary during the leave.
Learn More
To learn more about how PFML affects PERA benefits refer to the on-demand PFML webinar, the PMFL slides, or PFML Q&A.
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The Governmental Accounting Standards Board (GASB) is an independent organization that establishes accounting and financial reporting standards for states, local governments, and school districts. PERA provides employers GASB 68 financial reporting information to account for PERA pension liabilities and expenses.
The GASB 68 schedules should be available mid-February on our main website under About > Finance > GASB 68 Toolkit.
Two important annual reports are due from local government employers:
Annual Leave Report: Due January 31, 2026
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 2025 that resulted in any hours that were unpaid or ineligible for PERA contributions. 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, check out the Leave Reporting Overview, or watch the on-demand Leave Reporting webinar at the link below.
Annual Exclusion Report: Due February 28, 2026
All PERA-eligible local government units must file an Annual Exclusion Report. The report must list employees and public officials who worked any amount in 2025 and 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.
To learn more, review Chapter 9 of the Employer Manual, check out the Membership Eligibility Overview, or watch the on-demand Membership Eligibility webinar at the link below.
Limits Impact Small Percentage of Employees
The Internal Revenue Service (IRS) limits compensation applied to PERA Defined Benefit Plans (DBPs) and contributions made to the Public Employees Defined Contribution Plan (Public Employees DCP). The limits are defined in section 415 of the Internal Revenue Code (IRC) and are adjusted annually.
Although federal compensation and contribution limits impact only a small number of PERA-covered employees, employers and PERA are required to monitor DBP PERA-eligible salary and Public Employees DCP retirement contributions to ensure IRS compliance.
2026 IRS Compensation Limits: DBP Members
IRC § 401(a)(17) limits compensation that is subject to retirement withholding for defined benefit plan members. Coordinated, Correctional, or Police & Fire members may be impacted by the 2026 annual compensation limits.
These limits depend on when an individual first contributed to a Minnesota public retirement plan. Employers and PERA must evaluate PERA-eligible salary each pay period.
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On or after July 1, 1995
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Before July 1, 1995
Members who first began contributing to a Minnesota public retirement plan before July 1, 1995 have different pay period limits based on the annual limit of $535,000. The higher limit applies to all individuals whose first contribution was before July 1995, even if they had a break in service and PERA membership.
2026 IRS Contribution Limits: DCP Members
IRC § 415(c)(1)(A) limits annual employee and employer contributions made on behalf of an individual who participates in a qualified Public Employees Defined Contribution Plan. The federal contribution limit for calendar year 2026 is $72,000 and includes both employer and employee Public Employees DCP contributions.
For each Public Employees DCP member, the employer must monitor annual employee and employer contributions and discontinue contributions if the 2026 federal limit of $72,000 has been reached.
Excess Salary or Contributions
If PERA determines an employer reported compensation or contributions that exceed the 2026 IRS compensation and contribution limits, employers will be contacted to coordinate an adjustment or refund.
This information is also available on mnpera.org/employers under Eligibility > Eligible Salary > IRS Compensation and Contribution Limits.
Contribution rates are determined by the Minnesota Legislature, and members are required to contribute at those established rates. PERA cannot accept additional contributions into the member's account.
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