Omnibus pension bill headed to governor

Changes in assumed rates of investment return and other technical fixes to Minnesota’s public pensions would become law under an omnibus retirement bill passed by the House late Sunday night.

Sponsored by Rep. Tim O'Driscoll (R-Sartell) and passed 131-0, HF1508/SF1398* contains dozens of technical changes, the deletion of obsolete language and changes to volunteer firefighter pension plans. Passed 53-11 on May 11 by the Senate, where Senate President Sandy Pappas (DFL-St. Paul) is the sponsor, the bill now awaits Gov. Mark Dayton’s consideration.

What it does

The bill would address four areas of the state’s public pension programs, O’Driscoll said: fixes for individual constituent issues; technical changes and language cleanup; standardization to provide pension recipients more predictability; and volunteer firefighter pension modifications.

Among the proposed updates is a change to the actuarial growth assumptions for the interest rate, salary rate and payroll growth for Minnesota public employee retirement plans and accompanying conforming changes. It is a move, O’Driscoll said, that makes permanent what was a temporary reduction from 8.5 percent in 2011.

A number of changes to volunteer firefighter plans would occur under the bill, including:

• a measure that would make supplemental aid to volunteer firefighter plans permanent;
• modifications to statewide volunteer firefighter retirement plan lump sum retirement division;
• an exception for the Roseville Volunteer Firefighters’ Relief Association that would allow an increase in the number of retired board members to serve as active members of the relief association; and,
• the creation of a new monthly benefit retirement plan division.

Other measures in the bill would:

• completely merge the defunct Minneapolis Employees Retirement Fund (MERF) into the General Employee Retirement Plan of the Public Employees Retirement Association (PERA) by eliminating references to the separate entity of the former Minneapolis retirement group;
• set the local employer supplemental contribution to PERA on behalf of former MERF plan members at $21 million annually from July 1, 2015 until Dec. 31, 2031, and sets the state contribution to PERA general plans on behalf of the former MERF Division at $16 million annually;
• delete obsolete date revisions and make various clarifications;
• updates language to comply with the federal Uniformed Services Employment and Reemployment Act and Internal Revenue Code;
• extend Unclassified Employees Retirement Program of the Minnesota State Retirement System coverage to part-time legislative employees; and
• exclude certain current Minneapolis Park and Recreation Board trades personnel from PERA general coverage.