Minnesota House of Representatives


State Representative Mary Murphy

343 State Office BuildingState Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.

For more information contact: Matt Swenson 651-297-8406

Posted: 2010-05-17 00:00:00
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ST. PAUL, MN – The recession continues to inflict severe damage on state, county, and city employee pensions. In fact, pension plans are currently only 60 to 70 percent funded. Rep. Mary Murhpy (DFL – Hermantown) worked hard this session to find a solution to ensure a secure retirement for Minnesotans who spent their careers in service to our state.

Murphy’s bill (HF3281), signed into law by Governor Pawlenty this weekend, adopts a ‘shared sacrifice’ approach that responsibly sustains the pension funds that ensure a secure retirement for Minnesotans who spent their professional careers in service to our state. It calls for higher employee and employer contribution rates and a reduction in retiree cost-of-living adjustments (COLAs) to sustain the funds.

“This is a reasonable, responsible solution to a very difficult situation," said Rep. Murphy. “Even if the stock market skyrockets, and the economy turns around tomorrow, these pensions would still be in trouble. It would take years for these pensions to earn back everything they lost.

“We had to do something to keep these pensions solvent, and return some financial stability to the people who have served our state so well.”

Here’s what the bill does:

• Through a shared-sacrifice approach stabilizes funds in the:
o Minnesota State Retirement System (MSRS)
o Public Employees Retirement Association (PERA)
o Teachers Retirement Association (TRA)
o Duluth Teachers Retirement Fund Association (DTRFA)
o St. Paul Teachers Retirement Fund Association (SPTRFA)
o Provides ½ billion dollars a year in savings for the plans
• Expands the definition of seasonal employees and contains other recommendations from the State Auditor’s Volunteer Firefighter Relief Association Working Group
• Eliminates certain requirements related to wrongful discharge annuity repayment requirement statement
• Establishes uniform procedure for all public pension plans to correct errors when someone is reported to the wrong pension plan
• Requires third-party administrators hired by MSRS to follow Minnesota data privacy laws
• Creates new mechanism for employees on voluntary or mandated furlough to obtain service/salary credit
• Moves TRA from an hours-based tracking system to a salary-based formula

Governor Pawlenty signed Murphy’s bill into law Saturday night. Solutions included in the bill will not bring back everything lost to the recession. But Murphy says the changes will restore stability to the pension funds, and provide some security for state employees moving forward.

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