Legislative Commission on Pensions and Retirement (LCPR) Interim Meeting Report, 23 October 2013

Yesterday afternoon, the Legislative Commission on Pensions and Retirement (LCPR) held a hearing on several topics, but took no action on pending items. 

 

One item on its agenda was continued consideration of alternative post-retirement increase mechanisms.  Discussion of this topic was delayed at the request of Sen. Julie Rosen. This topic will be taken up at the Commission’s next set of hearings which are scheduled for  November 6 (1:00 pm) and November 7 (9:00 am) in Room 123.

 

First on yesterday’s agenda, the LCPR heard testimony on a dispute between the Metropolitan Council and the City of Minneapolis regarding the Met Council’s obligation for employer contributions to the Minneapolis Employees Retirement Fund (MERF) which is a closed fund that was administratively merged in PERA in 2010.

 

Second on the agenda, the Commission discussed PERA’s minimum salary membership threshold (currently $425 a month) which is the subject of an interim study by PERA that has identified options for revising its membership definition.  PERA continues to work with its stakeholder groups on possible changes.  Representatives of Education Minnesota, SEIU, AFSCME Council 5, and the MN School Employees Association testified on this topic.

 

Lastly, the LCPR began consideration of its “Principles of Pension Policy” which are used as guidance to the LCPR staff when they comment on and critique pending legislation.  Kim Crockett with MN Free Market Institute/Center of the American Experiment, testified and called attention to the principle that indicates a preference for defined benefit (DB) plans over defined contribution (DC) plans.  She asserted that if the Legislature promises a DB, then they have to fund it and fund it in a manner that equalizes the financial burden across generations of taxpayers.  She criticized the practice of using 30-year amortization periods to pay down unfunded pension obligations, stating that a 30 year period is too long and violates the principle of equalizing across generations.  She also emphasized that it is wrong to increase benefits when a plan is not fully funded.

 

Courtesy of

Susan M. Barbieri

Communications Officer

Teachers Retirement Association

Public Employees Retirement Association

Minnesota State Retirement System

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Public education is democracy in action

What do we have to feel good about?

Minnesota has done relatively well in step up to the Affordable Healthcare Act. Minnesota has started to get money back into the public education stream. Minnesota has shown concern for people’s right to have free access to voting. Minnesota has accepted equality in life-style over bigotry. And Minnesota has one of the best public employee retirement systems on the planet or off. So why are we so adamant about needing your help to fight for teacher pensions?

The war on public employees, on the middle-class, on the poor and at-risk, on the undocumented, on children is like the relentless and insatiable jihad of the Taliban; ours is an enemy with many heads, which like the Hydra grows a new head for every head we cut off. We may never win, but we must never lose.

2014 is a big pension legislation year in the biennial cycle and the forces to strip more from those who have less and the least have been lining up, while we have been basking in the harvest of the 2012 elections and the stunning growth in investment returns since 2010. All that good news looks good to us, but it looks good to the big moneyed interests too. They never have enough. They believe they’re harder working, smarter, better than the rest of us. They believe they’re entitled to all of it. Well, we know the truth; they’re more ruthless, and they don’t really care about the truth.

Steven Klees of the University of Maryland argues:

“Unemployment, in particular, is put at education’s door, arguing education is not teaching what the economy needs. … There are two or more billion un- or under-employed people on this planet, not because they don’t have the right skills, but because full employment is neither a feature nor a goal of capitalism…Entrepreneurship is the result of our failure to make good on the promise of decent work and substitutes hope and prayer for effective economic policy that creates employment.” (http://educationincrisis.net/blog/item/1002-business-as-usual-distorts-education-part-i)

Theirs is a false argument in almost every way. The corporate lobbyists will argue financial hardship for employers as the reason to strip you of your pension rights. First, record profits cannot be seen as hardships in any way. Second, the biggest funders of the “free market” lobbying effort are not hiring with their profits; they’re squeezing more hours out of reduced payrolls. Not satisfied with that, they want to eat our lunch too!

We cannot rest. We are small individually, but we are many, and we are right. Our children and youth deserve a good and complete education to become fully prepared citizens in a democracy, not just cogs in the wheels of industry, not just the fallen leaves that feed the mighty and the grand. And those who provide and provided that education deserve the respect and dignity they have earned. Their role in the backbone of democracy has always been fundamental.

We must not allow the Tea Party Taliban to push their minions in St. Paul into casting us aside, forgetting that we had a contract that gave us the right to a pension, into which we contributed from our small salaries, accepting, in exchange, that future pension.

Yes, we have a lot to feel good about. Let’s not lose it. When your Committee of Thirteen asks you to vote, please vote. When your Committee of Thirteen asks you to phone, please phone. And when your Committee of Thirteen asks you to contribute, please give.