Pension Facts: History
The St. Paul Teachers’ Retirement Fund Association was organized October 1, 1909, under authority granted by the Laws of Minnesota, 1909, Chapter 343. Membership was voluntary, dues were 1% of salary and there were no deductions from payroll. The first benefits were paid one year later to 15 members, commencing at $30 per month. Increases came slowly over the next several decades.
Like many such programs, the SPTRFA ran a pay-as-you-go system, and did not begin reserving assets for future benefits until 1955. The State of Minnesota became the employer of record twenty years later, in 1975. Contributions were set in state law at a level insufficient to fully pre-fund future retirement benefits. Unfunded liabilities created at that time remain our greatest funding challenge 30 years later.
In 1978, the Coordinated Plan was created, which provides that members are covered both by our local retirement program, as well as Social Security. A tiered benefit structure was created in 1989, which resulted in improved benefits, but also created different classes of membership defined by a participant’s date of hire.
In 1997, the Legislature passed a sweeping measure that raised the benefit formula for our members and replaced our 13th Check post-retirement benefit increase with a guaranteed 2% annual increase coupled with an investment performance-related increase.
Recent years have witnessed increased interest at the Legislature in proposals to combine the four teacher retirement funds into a single statewide system. Such a consolidation would require the resolution of many technical and administrative issues. The Association’s trustees have steadfastly maintained that any such combination of plans would be acceptable if it first offered the members genuine benefit upgrades and equivalent value for equal periods of service.