Annual Increase

ANNUAL INCREASE

The 2023 Pension Omnibus Budget Bill authorized a one-time payment to most PERA benefit recipients. This amount will be made as a lump-sum payment to eligible recipients by March 31, 2024.

WHO IS ELIGIBLE?

Eligible recipients include members receiving monthly benefits in Coordinated, Basic, Minneapolis Employees Retirement Fund (MERF), and Police & Fire, including consolidated relief associations eligible for PERA annual increases.

To qualify, you must have received a retirement, survivor, or disability benefit from one of these Plan for at least 12 full months before June 30, 2023.

Note: Correctional Plan benefit recipients will receive a 2.5% annual increase and do not qualify for the one-time payment.

WHAT IS THE AMOUNT?

The amount of the one-time payment is based on your 2023 gross benefit (as of December 31, 2023) and your 2024 annual increase.

This payment is NOT a 13th check. As it is a percentage of your benefit, it will be less than your regular monthly check. This one-time payment is non-compounding. Meaning, it is not added into your future benefits.

First, we find the difference between the approved overall increase percentage and the 2024 annual increase percentage. The increase difference is then multiplied by your 2023 annual benefit to calculate your payment.

For most recipients, the one-time increase percentage will be:

 » Coordinated: 1% (2.5% overall increase – 1.5% annual increase)

 » Basic and MERF: 2.5% (4% overall increase – 1.5% annual increase)

 » Police & Fire: 3% (4% overall increase – 1% annual increase)

Exceptions: For eligible Police & Fire members who do not qualify for the 2024 annual increase but still qualify for the one-time payment, your one-time increase will be 3%. For eligible recipients receiving a prorated 2024 annual increase, the one-time increase percentage will be difference between the overall increase and the partial annual increase. See scenario #2 and #3 below under “Calculate your one-time payment.”

Basic, MERF, and Police & Fire recipients do not receive Social Security benefits and therefore have a larger approved overall increase.

CALCULATE YOUR ONE-TIME PAYMENT

Calculating your one–time payment is easy to do! All you need is your one-time increase percentage from above and your 2023 annual benefit amount. All one-time payment examples listed below are gross amounts (before taxes).

Here are three scenarios with calculation examples to show you the process:

SCENARIO A: You are eligible for the full 2024 increase. Here are three calculation examples:

 » Coordinated: If your 2023 annual benefit is $12,000 ($1,000/month), then the one-time payment will be $120 (1% x $12,000).

 » Basic and MERF: If your 2023 annual benefit is $12,000 ($1,000/month), then the one-time payment will be $300 (2.5% x $12,000).

 » Police & Fire: If your 2023 annual benefit is $12,000 ($1,000/month), then the one-time payment will be $360 (3% x $12,000).

SCENARIO B: You are receiving a prorated 2024 increase (mostly applies to Police & Fire members). Here is a calculation example:

 » Police & Fire: Your 2023 annual benefit is $12,000 ($1,000/month). You received 39 months of benefits by December 31, 2023, and you qualify for 0.75% annual increase in 2024. Your one-time increase percentage will then be 3.25% (4% – 0.75%). Your one-time payment will then be $390 (3.25% x $12,000).

SCENARIO C: You are not receiving a 2024 increase (Police & Fire members only). Here is a calculation example:

 » Police & Fire: If your 2023 annual benefit is $12,000 ($1,000/month) and your 2024 annual increase is 0%, then the one-time payment will be $360 (3% x $12,000).

TAXES

For most members, the one-time payment will be fully taxable. PERA will withhold 10% federal tax and 6.25% MN state tax (state taxes apply to MN residents only) on the taxable portion of your one-time payment.

OTHER INFORMATION

You do not need to apply for the one-time payment. PERA will determine your eligibility and process your one-time payment.

The one-time payment will be made the same way you receive your current benefit payment: direct deposit or paper check.

Additional questions? The best way to reach us is through email at benefits@mnpera.org.

Annual increases for monthly benefits are determined by Minnesota Statutes. Increases are effective January 1 of each year for eligible benefit recipients. 

The increase percentage for Coordinated and Correctional members is tied to the same consumer price index (CPI) used by the Social Security Administration. Coordinated benefit recipients receive 50% of the Social Security increase, but not less than 1.0% or greater than 1.5%. Correctional benefit recipients receive 100% of the Social Security increase, but not less than 1.0% or greater than 2.5%. The Police & Fire increase is not currently tied to CPI and is fixed at 1.0%.

MERF and Basic benefit recipients receive the same increase amount as Coordinated. Minneapolis Police and Minneapolis Fire benefit recipients receive the same increase amount as Police & Fire.

Can PERA tell me my new 2024 benefit amount?

PERA benefit counselors will not be able to provide new benefit amounts at this time. 2024 benefit amounts, including gross benefit, taxes, other withholding, and net payment will not be available until the end of December. Please log into your myPERA account after December 21 to find this information.

New to receiving PERA benefits?

Your first increase will depend on the type of benefit you are receiving, the plan, and the start date. After your first increase, all future increases will be the full amount per statute. See you Plan’s increase fact sheet under the resource section for more information.

2024 Rates

PlanIncrease
Coordinated1.5%
Police and Fire1.0%
Correctional2.5%

YearCoordinatedPolice & FireCorrectional
19784.00%4.00% 
19790.00%0.00% 
19800.00%0.00% 
19813.21%3.21% 
19827.44%7.44% 
19836.85%6.85% 
19847.50%7.50% 
19856.91%6.91% 
19867.88%7.88% 
19879.79%9.79% 
19888.05%8.05% 
19896.92%6.92% 
19904.04%4.04% 
19915.10%5.10% 
19924.30%4.30% 
19934.55%4.55% 
19946.02%6.02% 
19953.99%3.99% 
19966.40%6.40% 
19978.04%8.04% 
199810.09%10.09% 
19999.83%9.83% 
200011.14%11.14% 
20019.53%9.53%9.53%
20024.49%4.49%4.49%
20030.75%0.75%0.75%
20042.10%2.10%2.10%
20052.50%2.50%2.50%
20062.50%2.50%2.50%
20072.50%2.50%2.50%
20082.50%2.50%2.50%
20092.50%2.50%2.50%
20102.50%2.50%2.50%
20111.00%1.00%1.00%
20121.00%1.00%2.50%
20131.00%1.50%1.00%
20141.00%1.00%1.00%
20151.00%1.00%2.50%
20161.00%1.00%2.50%
20171.00%1.00%2.50%
20181.00%1.00%2.50%
20191.40%1.00%2.50%
20201.00%1.00%1.60%
20211.00%1.00%1.30%
20221.50%1.00%2.50%
20231.50%1.00%2.50%
20241.50%1.00%2.50%