Important Minnesota Pension Changes: How Does This Affect Public School Teachers?
New Pension Update for Minnesota Educators: Good News for Your Retirement!
We’re excited to share some unexpected, positive changes to Minnesota’s pension system that could give public educators more flexibility in their retirement planning. The Minnesota Legislature recently passed a significant pension reform bill that especially benefits our educators.
What Changed in the Minnesota Pension System?
The biggest change affects teachers who have 30 years of service. Previously, if you wanted to retire before age 65, you would face substantial pension reductions. Now, you can choose to retire at age 60 with 30 years of service and face a much smaller penalty. The reduction rate has improved from 6% to 5%, resulting in a higher monthly retirement check.
Understanding Your Tier:
Tier 1 teachers (hired before July 1, 1989) already have access to the “Rule of 90,” allowing retirement when age plus years of service equaled 90
Tier 2 teachers (hired after July 1, 1989) will particularly benefit from this new change, as it provides retirement flexibility closer to what Tier 1 teachers have
What Does This Mean for You?
There are three main things you should know in relation to your retirement planning as a Minnesota teacher:
If you are considering early retirement, you may have better options than you did before.
The new rules take effect June 30, 2025
For “Tier 2” educators, this brings benefits to nearly 97% parity with the “Rule of 90” at age 60
Important Note: The Minnesota Teachers Retirement Association (TRA) is currently updating its systems with new calculations. This means we can’t yet provide specific numbers for individual situations, but we expect these updates in the coming weeks.
What are Your Next Steps?
At the time of this article’s publication - June 11, 2025 - the TRA calculations are not yet published. However, your next step should be getting an appointment on my calendar. We can get the ball rolling on personally reviewing your retirement strategy and potentially adjusting your plan, in light of these new developments.
You can call my office directly or schedule an appointment through my online portal. You are also more than welcome to just call and ask any questions you have about your personal situation.
Remember, while this is exciting news, these changes can be complex. Let's talk about how they affect your specific retirement plans. My team and I are here to help you understand your options and make informed decisions about your future. We can discuss how these changes fit into your broader retirement strategy and ensure you’re positioned to benefit from these improvements when they take effect.
Thank You for Your Dedication to Education!
As someone who has spent my career helping educators secure their financial futures, I understand the importance of these pension changes to you and your family. Teachers spend their lives investing in our children’s futures, and you deserve to have someone equally invested in your retirement. My team and I are committed to helping you navigate these new opportunities with the same dedication you’ve shown to your students.
Whether you are years away from retirement or actively planning your next chapter, we’re here to help you understand how these recent changes affect your family’s situation. Every teacher’s story is different, and I am looking forward to sitting down with you, answering your questions, and helping you make the most of your hard-earned benefits!
(The Lincoln Investment family of companies nor any of its representatives is affiliated with the Teacher Retirement Association (TRA) and TRA does not sponsor, authorize, or endorse the retirement educational services described in this or other communications of Lincoln Investment.)