Commission clarifies that Minnesota paid‑leave payments are ineligible salary for pensions; members may purchase service credit

The commission considered Senate File 43 73 with the A1 amendment clarifying how Minnesota Paid Family and Medical Leave payments are treated for pension salary calculations. Miss Wilson and LCPR staff said the amendment makes paid‑leave payments similar to workers' compensation — ineligible salary for pension calculation — but allows members to purchase service credit for that leave.

"This clarifies that the paid‑leave payments are ineligible salary. This means contributions are not taken on that payment and members then have the opportunity to purchase that service at a later date," said Amy Strini, PERA policy coordinator, testifying on behalf of PERA. PERA indicated it supports the proposal and listed it as a legislative priority.

Staff explained the A1 amendment also makes the treatment consistent across plans and allows Saint Paul Teachers members on paid family leave to purchase service under Saint Paul Teachers' rules. Members asked technical questions about purchase rates and calculation of high‑5 salary; staff said repurchase mechanics and thresholds can be addressed and that a member who wishes to buy back leave would pay both employee and employer contribution rates for the repurchased period.

The commission voted to recommend Senate File 43 73, as amended, to be incorporated into the 2026 omnibus pension bill.

Next steps: the bill, as amended, was forwarded to inclusion in the omnibus pension bill.