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Increases in Your PERA Pension


 

A valuable feature of your PERA pension is that it is not a fixed amount.

Your benefit will see annual adjustments during your years of retirement. These increases, which also apply to benefits received by our disabled members and survivors, will help maintain your standard of living.

Annual benefit increases will be 1 percent for the General (Coordinated, Basic and MERF),and Police & Fire plans until they achieve 90 percent funding. The Correctional plan benefit increase is currently 2.5 percent.

Once a plan achieves 90 percent funding for two consecutive years, the benefit increase will return to the previous 2.5 percent per year.  Any time a plan again falls below 85 percent funding for two consecutive years, or plunges to 80 percent funding, the lower increase rate will be reinstated.

The lower increase rates were part of the 2010 Omnibus Pension Bill and are part of a multi-phased effort to ensure adequate funding for PERA benefits in the future.

For individuals retired less than 18 months in January (42 months for P&F members), initial increases will be a percentage of these amounts.

New Retirees May Receive Only a Portion of the First Pension Adjustment

For new retirees whose retirement effective date is July 1, a full post-retirement increase becomes payable 18 months after retirement (42 months for P&F members retired after June 30, 2014). For those who have effective dates other than June 1, a prorated increase will become payable in seven to 17 months (31 to 41 months for Police and Fire members).  The waiting period and size of your first post-retirement increase depend upon the number of months remaining in the fiscal year after your retirement effective date. Every succeeding year, however, you will receive the full increase that is awarded.

The tables below show the waiting periods and the percentage of any initial increase you will receive, based upon the effective date of your retirement. Retirements are effective the first day of the month following your termination from public employment. Your date of termination is the last day for which you are paid or the day your authorized leave of absence ends.  Thus, if you terminate PERA-covered employment March 15, your retirement becomes effective April 1. If you are an elected official, your effective date is the day after your elected term ends.

Prorated Amount of Retirement Increase

Retirement Effective Date Waiting Period Percent of Awarded Increase
January 1 12 months 50.0%
February 1 11 months 41.7%
March 1 10 months 33.3%
April 1 9 months 25.0%
May 1 8 months 16.7%
June 1 7 months 8.3%
July 1 18 months 100.0%
August 1 17 months 91.7%
September 1 16 months 83.3%
October 1 15 months 75.0%
November 1 14 months 66.6%
December 1 13 months 58.3%

 

Prorated Amount of Retirement Increase

For Police & Fire Plan members retiring after May 31, 2014, the following schedule is used:

Retirement Effective Date Waiting Period Percent of Awarded Increase
January 1 36 months 50.0%
February 1 35 months 41.7%
March 1 34 months 33.3%
April 1 33 months 25.0%
May 1 32 months 16.7%
June 1 31 months 8.3%
July 1 42 months 100.0%
August 1 41 months 91.7%
September 1 40 months 83.3%
October 1 39 months 75.0%
November 1 38 months 66.6%
December 1 37 months 58.3%

 

Annually, PERA pays more than $2 billion in benefits.

“I learned valuable information about my pension and wish I knew more about my pension when I was younger.”

89% of benefit payments are made to Minnesota residents.

*estimate based on June 2017 payments