Ways and Means advances pensions package with COLA fix, new probation and telecommunicators plan

At a meeting of the Minnesota House Ways and Means Committee, members voted to refer House File 4074 as amended to the general register after adopting a series of technical and funding amendments that adjust pension funding, restore delayed cost-of-living adjustments (COLAs) for police and fire, and establish a new plan for probation officers and 911/telecommunicators.

Representative Lilly, a co-chair of the pension commission, said the bill reflects bipartisan work from the commission and implements benefit and funding provisions for Saint Paul teachers, police and fire, and a new probation and telecommunicators subplan. “Weare excited to be before you,” Representative Lilly told the committee as she introduced the commissionwork.

Helen Roberts of the House fiscal staff reviewed the numbers. She described an SBI (State Board of Investment) accounting reallocation, $8 million in direct aid to police and fire to remove a COLA delay, employer contribution lines for affected state agencies and the Met Council, and direct aid lines for MSRS and PERA tied to a 20-month employee contribution reduction. Roberts gave the billtotals: “The total for the pension bill is on the final line, general fund, 15,369,000 in fiscal year '27 and then 12,697,000 in each year in the tails,” and she cited a $643,000 net cost from the SBI change.

Committee members praised the SBI provision as increasing transparency in accounting for investment-related costs. Representative Claiborne said the change improves how dollars are accounted for and brings modern methods to those expenses. Chair O'Driscoll and other members also emphasized the policy work that remains: O'Driscoll described an interim work group authorized to address an increase in duty-disability applications for police and fire, saying the surge in applications has a "huge fiscal impact" on those plans and that the commission will seek additional fixes before the next session.

The committee adopted a DE2 amendment to incorporate the pension commission's bill into the vehicle and approved an A8 correction to update late-arriving fiscal numbers. After discussion and the fiscal presentation, the chair renewed the motion; the committee approved referral to the general register by voice vote.

What the bill does and its near-term fiscal effects: the bill reallocates how the State Board of Investment assesses and allocates investment-related expenses (producing a small general fund cost in the fiscal presentation), provides roughly $8 million in direct aid to restore a delayed COLA for police and fire, funds employer contribution impacts for affected agencies and the Met Council, and includes direct-aid lines tied to a temporary employee contribution reduction for MSRS and PERA. The fiscal staff put the near-term change in expenditures at about $14.6 million for the 2026-27 biennium and cited $11.9 million in the tails.

The committee did not record a roll-call tally for the voice votes reported in committee; the clerk announced the motions carried with members responding 'Aye' and no named opposition. The chair referred House File 4074 as amended to the general register.

Next steps: Referral to the general register sends the bill forward in the legislative process; the bill will appear on the House general register for future floor action and committee consideration. The committee also noted the pension commission's ongoing work on duty disability and said staff and the work group will return with options for adjustments in a future session.