Omnibus Pension Bill Progressing Toward Final Passage

While the package includes administrative changes for various plans, much of the bill focuses on public safety, including new work groups and fire relief association reforms.

On May 5, the Legislative Commission on Pensions and Retirement (LCPR) held its final meeting of the biennium to approve its omnibus pension bill SF 4276*/HF 4074 sponsored by Sen. Nick Frentz (DFL-North Mankato) and Rep. Leon Lillie (DFL-North St. Paul).

Work Group on duty disability and the public safety officer’s benefit account

In 2023, the Legislature provided $100 million to the Public Safety Officer’s Benefit (PSOB) account in an attempt to address a significant issue: the impact of duty disability claims on both the Public Employees Retirement Association (PERA) Police and Fire (P&F) plan and the continued health insurance requirement for public employers in the state.

Last year, lawmakers passed legislation limiting the continued health insurance obligation for cities to a maximum of 60 months for individuals who are not permanently disabled. Even with that change, however, the $100 million in the PSOB account is expected to be depleted within the next two years, making a long-term solution necessary. Numerous efforts were made this year to roll back some of the recent changes to duty disability requirements, but none received broad stakeholder support.

One proposal advance by Law Enforcement Labor Services would have required employers to provide continued health insurance coverage until age 65 for public safety officers with physical disabilities sustained in the line of duty, while maintaining the 60-month cap for those with mental health injuries. Other public safety stakeholders raised significant concerns about that approach.

Ultimately, a majority of stakeholders in the public safety community agreed to establish a work group tasked with developing legislative proposals to reform the duty disability process and secure permanent funding for the PSOB account. The League of Minnesota Cities, along with several other stakeholders, submitted a letter supporting the creation of the work group and will participate through the 2027 legislative session.

Read the League’s joint-letter of support for the creation of a duty disability work group (pdf).

Pension bill highlights

Other provisions in the bill would:

• Appropriate $12 million this year and each year thereafter to reduce the PERA P&F cost-of-living adjustment delay to one year.
• Establish a work group to examine changes to vesting and inclusion of emergency medical providers in fire relief associations and the Statewide Volunteer Firefighter Plan. Read more about the proposed fire relief association work group.
• Create a new PERA pension plan for probation officers and 911 telecommunicators.
• Require employer pension contributions for re-employed annuitants.
• Incorporate changes to fire relief associations recommended by the Office of the State Auditor’s fire relief association work group.

What’s next?

After passage by the LCPR, the omnibus pension bill has started moving through committees in both the House and Senate. Because the pension commission includes members from both chambers, the bill is unlikely to require a conference committee once it passes the House and Senate floors.

The expectation is that the omnibus bill will make it across the finish line and be signed into law by Gov. Tim Walz before the end of the legislative session. A full breakdown of the bill will be included in the League of Minnesota Cities 2026 Law Summaries, which will be released following the 2026 legislative session.

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