Updated October 8, 2026. Quick answer: A vested member of the Minnesota PERA Police & Fire Plan can retire with an unreduced pension at 55, or from age 50 with a permanent reduction of 5% per year before 55. The pension is 3.0% of high-five average salary for each year of service. The choice among Single Life and the 25%, 50%, 75% or 100% survivor options becomes irrevocable on the date the first payment issues. A refund returns employee contributions plus interest only and forfeits all future PERA benefits. The annual increase is 1.0%.
What this page covers and what it does not
This page works from documents published by the Public Employees Retirement Association of Minnesota (PERA): its Police & Fire Plan Handbook, which carries the line “Last Revised: November 2024”, four brochures and fact sheets, and two website pages, all read on October 8, 2026. Any figure here is PERA’s, or is labeled as a computed example from assumed inputs.
It covers one group, members of the Police & Fire Plan: “Participation in Police & Fire requires employment as a law enforcement officer or firefighter meeting certification and job-related duties specified by statute”, plus “Hennepin County paramedics and emergency medical technicians”. Several rules turn on hire date (July 1, 1989, July 1, 2010 and June 30, 2014). The PERA General plan, for other employees, is covered on Minnesota PERA General plan decisions. State tax questions are on Minnesota retirement taxes and does Minnesota tax pensions.
When a pension can start
The Handbook sets the unreduced age: “Full retirement age for vested members of the Police & Fire Plan is 55”. For members hired before July 1, 1989 there is a second route: “Individuals hired prior to July 1, 1989, also qualify for a full, unreduced pension when their age plus years of public service total at least 90 (Rule of 90), regardless of age”.
Before full retirement age, a reduced pension is available on two routes: “You are at least age 50 and have met vesting requirements”, or “You have 30 or more years of service, regardless of age, if first hired prior to July 1, 1989”. The Handbook adds that “there is a permanent reduction in benefits for retirement prior to age 55”.
Vesting decides whether any pension is payable at the minimum age. For membership that started before July 1, 2010, “Your vesting requirement is three years (36 service credits)”. For membership that started on July 1, 2010 or later there is a graded schedule: “At five years, you are 50% vested in the plan”, and “Vesting increases at 10% per year until you are fully vested after 10 years”. In the Handbook’s example, seven years of service (70% vested) and a $7,000 high-five monthly average give $1,470 before the vesting reduction and $1,029 after it.
How the monthly pension is figured
The Handbook writes the formula as “3.0% x Police & Fire service credit x high-five average salary”, and defines the average: “Your high-five average salary is your gross salary during the 60 consecutive months in which your salary was greatest”. For members first enrolled after June 30, 2014, the Handbook says “retirement benefits are capped at 99% of average salary”.
A computed example from an assumed $8,000 high-five monthly average salary and an assumed 20 years of service, not a PERA figure: 3.0% times 20 years is a computed 60% of salary, and 60% of $8,000 is a computed $4,800 a month at full retirement age.
The Handbook states the early reduction: “The reduction is a fixed rate of 5% per year, prorated on a monthly basis (5/12 per month)”. At an assumed retirement age of 52, three years before 55, 5% times 3 years is a computed 15%, so the $4,800 a month falls to a computed $4,080 a month. That agrees with PERA’s own table, which shows 51.00% of high-five average salary for 20 years of service at age 52.
| Years of service | Retire at 50 | Retire at 52 | Retire at 55 |
|---|---|---|---|
| 10 years | 22.50% | 25.50% | 30.00% |
| 15 years | 33.75% | 38.25% | 45.00% |
| 20 years | 45.00% | 51.00% | 60.00% |
The election: Single Life or one of four survivor options
The Single Life form: “A Single Life retirement benefit is paid during your lifetime only; no monthly payments will be made to any person after your death”. Unreturned contributions: “your designated beneficiaries would receive, if any, the remaining employee contributions you made to PERA that you have not yet received as a pension benefit”.
The survivor alternative: “you may select a 25%, 50%, 75%, or 100% survivor option”. The cost is a smaller check: “The monthly payments under a survivor option are smaller than the Single Life pension because they are paid over both your expected lifetime and that of your designated survivor”. The website adds that “the younger the survivor, the larger the reduction”. The pages read give no table of reduction factors for the survivor options.
| Option | What the member receives | What the survivor receives |
|---|---|---|
| Single Life | The largest monthly benefit option available | No monthly payment to anyone; any employee contributions not yet received as pension go to beneficiaries |
| 25% survivor | Reduced; more if the survivor is younger | 25% of the member’s monthly pension to the named survivor |
| 50% survivor | Reduced; more if the survivor is younger | 50% of the member’s monthly pension to the named survivor |
| 75% survivor | Reduced; more if the survivor is younger | 75% of the member’s monthly pension to the named survivor (age limits if not a spouse) |
| 100% survivor | Reduced; more if the survivor is younger | 100% of the member’s monthly pension to the named survivor (age limits if not a spouse) |
If the survivor dies first, the Handbook says “If you select a survivor option and your survivor dies before you, the amount of the pension will bounce back to the level of the Single Life benefit”. For the general trade-off, see single life vs joint and survivor pension.
A computed example from an assumed $4,000 monthly pension after the survivor reduction, not a PERA figure: the 75% option leaves the survivor 75% of $4,000, a computed $3,000 a month, and the 50% option leaves a computed $2,000 a month. The $4,000 is invented; the pages read publish no reduction factors.
Spouses, non-spouse survivors and age limits
The Handbook says “If you are married, your spouse is required to sign your benefit application”, and that “Failure to do so will result in a default 50% survivor option if you have chosen either the Single Life or 25% survivor option”.
A member may name someone other than a spouse, with limits on the 75% and 100% options. The survivor options fact sheet states “If you name your spouse as your survivor, there are no age restrictions”, and “The adjusted age must be no more than 19 years younger than the member for the 75 percent option and no more than 10 years younger for the 100 percent option”.
What is irrevocable, and the deadlines
The Handbook warns: “Some of the decisions you make become irrevocable on the date PERA issues your first payment”. It names the choices: “These include the pension option you choose and your named survivor”.
A narrow exception exists after payments begin. PERA says: “Once benefits begin, the only time a survivor option can be rescinded is in the case of a mutual agreement by both the PERA retiree and the chosen survivor”.
On timing, the Handbook says “While a retirement application can be filed up to six months prior to your effective date, we suggest you submit your application at least 60-90 days prior to your retirement date”. The older brochure says “Submit it to PERA at least 60 days before your retirement date”. The Handbook adds that “you must also provide PERA with a Verification of Termination form signed by your employer”.
On the start date, the Handbook says “your pension with PERA is effective the first day of the month following your termination from public employment”, and “PERA will pay you an estimated pension approximately three weeks after the effective date of your retirement”, while the older brochure says “You will receive your first retirement benefit about two weeks after your retirement effective date”. A separation rule applies: “A right to a retirement benefit requires a complete and continuous separation from all public employment for 30 days”.
Lump sums, partial lump sums and DROP
The website frames the choice at the top of its benefit options page: “You can choose to collect your monthly benefit for life, or you can receive a lump sum of your employee contributions plus interest”. The lump sum it means is the refund of the member’s own contributions with interest, covered below, and it carries a hard consequence: “If you take a refund or roll over, you forfeit all future benefits from PERA and will not receive a monthly benefit”.
The pages read do not describe a lump-sum retirement option that pays part of the pension’s value in cash, a partial lump sum, or a deferred retirement option plan (DROP). For the general framework on weighing cash against a monthly benefit, see pension refund vs leaving it.
Leaving before retirement: defer, start early, or take a refund
A vested member who leaves has more than one path. The Handbook says “If your public service ends after you are vested for a benefit but before age 50, you may leave your contributions with PERA and qualify for a deferred pension at retirement age”. On timing, “You can begin receiving a lifetime benefit any time after reaching age 50, but benefits must begin before your IRS required minimum distribution (RMD) age”.
A refund can still follow later: “you may leave your contributions in PERA and apply for a refund at any time before a deferred benefit is paid”.
A member who is not vested and does nothing eventually loses the money: “If you remain out of PERA service, are not vested, and do not apply for a refund within five years after your last member contribution was made, you will forfeit your member contributions and interest”.
Taking a refund: what it pays and what it ends
The rule: “If you end your public service and remain out of public employment for more than 30 days, you may elect to receive a refund of your contributions instead of leaving them with PERA for a future pension”. What it pays: “The refund consists of your employee contributions plus interest, compounded annually”. PERA says the employer’s matching contributions “are not refundable. They remain with PERA”. On the consequence: “When you collect a refund of employee contributions, you forfeit all future PERA benefits, such as a lifetime pension”.
The website lists a “Notarized Refund Application”, and the refund brochure adds “Only applications with original ink signatures will be accepted”. The Handbook adds: “A refund is payable as a lump sum between 30 and 120 days after PERA receives your completed application”.
The pages read do not say whether a spouse must consent to a refund, so a married member should ask PERA before applying. Compare the refund against leaving the money in on pension refund vs leaving it.
Repaying a refund is possible: “If you return to public service in Minnesota after receiving a refund, you may repay a lump-sum payment of all previously forfeited service, plus interest, to restore prior service credit with PERA”.
How a refund is paid and what is withheld
Paid to the member, a refund triggers withholding: “PERA will automatically withhold 20%”, and PERA will automatically withhold the “default tax rate of 6.25% (MN residents only)”. The brochure also warns that “you may be subject to an additional 10% federal early withdrawal tax”, and that “The tax penalty may not be applicable if you terminate public service and receive your refund during or after the year you reach age 55 (age 50 for qualified public safety employees)”.
A direct rollover avoids the immediate tax: “your refund will not be taxed at the time of the transfer”. If the money is paid out first, “You can still transfer all or part of the refund to a qualified plan within 60 days from the payment date”.
A computed example from an assumed $10,000 taxable refund paid to the member, not a PERA figure: 20% of $10,000 is a computed $2,000 withheld for federal tax, 6.25% is a computed $625 withheld for Minnesota, and the cash left is a computed $7,375. The final tax can be more or less than what is withheld. See 20% withholding on a pension lump sum.
Buying service credit
For military leave from public employment, the Handbook says “you may purchase credit for any or all of your leave, up to a maximum of five years”. For strikes, “You may purchase up to one year of service credit for any period of time you participate in a public strike without pay”. For unpaid authorized leaves, “The leave purchase is optional, but may result in a larger monthly benefit when you retire”.
The pages read give no price for any purchase, only the method. A general tool is the pension buyback calculator.
The annual increase after retirement
PERA’s fact sheet states “Per statute, the Police & Fire annual increase is 1.0%”. A new retiree waits before the first one: “You are eligible for your first increase after completing the required waiting period, which ranges from 19 to 30 months”.
PERA’s own illustration starts with a $5,000 monthly benefit in March 2026 and shows $5,016.66 from January 2028 and $5,066.83 from January 2029, if both increases are 1.0%.
If a member dies before retiring
For active members the Handbook says “If you are an active member of the fund, are partially or fully vested, and die prior to retirement, your spouse is eligible for a lifetime survivor benefit”. “This benefit is based on 50% of your average salary during the six months of public service immediately preceding your death”.
The Handbook’s table of monthly survivor benefits for a non-duty death shows, for a $4,000 average salary, $2,000 for a surviving spouse, $2,400 for a spouse and one dependent child, and a $2,800 family maximum.
A refund is an alternative in some cases: “your surviving spouse may forgo the survivor benefit in favor of a refund of your employee contributions plus interest”.
Working after retirement and tax on the pension
A retiree who goes back to PERA-covered work faces earnings limits: “If you return to PERA-covered employment and are under full Social Security retirement age, you must remain within the annual earnings limits set by Social Security”.
On the pension itself, the Handbook says “Your PERA benefits are subject to federal and state taxes (based on residency)”.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of PERA’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. PERA’s refund brochure describes the same 20% federal withholding on a refund paid to the member and the same 60-day rollover window. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The pages read give no table of reduction factors for the 25%, 50%, 75% and 100% survivor options; they say only that the reduction depends on the survivor’s age.
- The pages read do not state whether a spouse must consent to a refund.
- The pages read do not describe a partial lump sum or a DROP, and do not describe a lump sum at retirement other than the refund of employee contributions.
- The pages read give no price for the military, leave or strike purchases.
- The 2017 application brochure says the first payment follows the effective date by about two weeks, while the November 2024 Handbook says approximately three weeks; the newer Handbook is the safer guide, and PERA can confirm.
- The Handbook is a general summary, and the Minnesota Statutes it relies on and the individual forms were not worked through.
- Disability retirement, which the Handbook covers separately, was not examined on this page.
Common mistakes
- Treating the survivor choice as changeable later; PERA says the option and the named survivor become irrevocable on the date the first payment issues.
- Naming a younger non-spouse survivor and expecting the 100% option; age limits apply to the 75% and 100% options when the survivor is not a spouse.
- Taking a refund because the check looks large; it forfeits all future PERA benefits and leaves the employer’s contributions with PERA.
- Retiring at 50 expecting a full pension; the reduction is 5% per year before 55 and is permanent.
- Expecting a refund in full when paid directly; 20% federal and a default 6.25% Minnesota withholding apply unless the money is rolled over.
Related on this site: public pension retirement decisions by system, Minnesota retirement taxes, does Minnesota tax pensions, Minnesota PERA General plan decisions, pension refund vs leaving it and single life vs joint and survivor pension.
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Answer againSources
- Public Employees Retirement Association of Minnesota (PERA), Police & Fire Plan Handbook (last revised November 2024): https://www.mnpera.org/sites/default/files/police-and-fire-plan-handbook.pdf
- Minnesota PERA, Survivor options explained, member education fact sheet (dated 05.09.2017): https://www.mnpera.org/sites/default/files/survivor-options-explained.pdf
- Minnesota PERA, Benefit Options (web page, read October 8, 2026): https://www.mnpera.org/members/plan-retirement/benefit-options
- Minnesota PERA, Refunds & Rollovers (web page, read October 8, 2026): https://www.mnpera.org/job-changes/refunds-rollovers
- Minnesota PERA, Applying for a Refund, PUB M90008 (December 2023): https://www.mnpera.org/sites/default/files/applying-for-a-refund.pdf
- Minnesota PERA, Police & Fire Annual Increase, PUB M90012 (October 2025): https://www.mnpera.org/sites/default/files/annual-increase-police-and-fire-plan.pdf
- Minnesota PERA, Applying for Police & Fire Plan Retirement Benefits (brochure dated 9.13.2017): https://www.mnpera.org/sites/default/files/applying-for-police-and-fire-plan-retirement-benefits.pdf
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 8, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.