LCPR chair reluctant to act on sustainability this year, and what you can do!

The Legislative Commission on Pensions and Retirement (LCPR) met Tuesday evening to hear a number of pension bills, most of which were individual constituent bills.

At the end of the hearing, LCPR Chairman Tim O’Driscoll, R-Sartell, said that there will be one, perhaps two, more LCPR meetings during the session. He said that he has heard concerns from commission members about the sustainability proposals and that he is working on a “road map” for that legislation, which he plans to discuss with members at the March 29 LCPR meeting.

O’Driscoll said the sustainability proposals amount to a “$3 billion fix” that is not in sync with the budget cycle. He said he believes it is important for the LCPR to do it right the first time and avoid adopting a “half solution.” He said the commission’s staff and actuary need more time to evaluate the proposals and explore alternatives.

Sen. Sandy Pappas, D-St. Paul, said that it is unrealistic for O’Driscoll to plan for a one-time fix because problems and trends can be unpredictable. She said the commission should regularly monitor the pension systems’ funded status and make adjustments when needed. Rep. Mary Murphy, D-Hermantown, said that the LCPR needs to weigh in and take action this year. She indicated that she is not willing to wait, “but I am only one vote,” she observed.

In other discussion, the LCPR discussed legislation being drafted by O’Driscoll to increase PERA’s annual salary threshold for earning service credit from $5,100 to $14,800 for calendar-year employees and from $3,800 to $11,100 for school-year employees.

Julie Bleyhl and Sarah Lewerenz testified on behalf of AFSCME and expressed concerns about the negative impact of the proposal on lower-paid public employees who might be denied PERA service credit under the proposal. PERA Executive Director Doug Anderson testified that staff needs more time to analyze the actuarial impact of the proposal on the fund. LCPR took no action on the proposal.

Recap courtesy Susan Barbieri

What you can do.

Below is a letter that you may send to one or more members of the Legislative Commission on Pensions and Retirement
Here are the names of the members and their email and postal addresses. 

House Members:

Senate Members:

Representative Tim O’Driscoll, Chair
451 State Office Building,
Senator Sandra L. Pappas, Vice Chair
3205 Minnesota Senate Building, 651-296-1802
Representative Tony Albright
407 State Office Building,
Senator Julie A. Rosen, Secretary
139 State Office Building,
Representative Sarah Anderson
583 State Office Building,
Senator Barb Goodwin
2101 Minnesota Senate Building, 651-296-4334
Representative Sondra Erickson
479 State Office Building,
Senator Jeff Hayden
3109 Minnesota Senate Building, 651-296-4261
Representative Ron Kresha
531 State Office Building,
Senator Alice M. Johnson
3111 Minnesota Senate Building, 651-296-2556
Representative Mary Murphy
343 State Office Building,
Senator Tom Saxhaug
2111 Minnesota Senate Building, 651-296-4136
Representative Paul Thissen
267 State Office Building,
Senator Dave Thompson
131 State Office Building,

Here is a draft of a letter which may be copied and modified for your information and sent by email or post.

Dear (Senator or Representatives name),

As a voter in Legislative District (##A/B), and a participant in the Minnesota Teacher Retirement Association, I am appealing to you to support the 2016 TRA sustainability proposals. The TRA pension fund has been recovering steadily since the 2010 pension fix bill was passed, under which active teachers and principals accepted contribution increases during a time of flat salaries, effectively accepting cuts. The 2016 TRA sustainability proposals are not as severe as the 2010 fix but equally important. The TRA sustainability proposals help to distribute the adjustment costs fairly while achieving a realistic actuarial outlook. This seems to me to be the goal of any pension legislation action—to make the pension plan sustainable.

Without adjustment, Minnesota can expect a less sustainable plan and a more burdensome liability against state revenues in the future. After changes to the investment assumption rate and changes in the calculated morality rates, the contribution deficiency will fall to a negative four and a half percent. Furthermore, the total dollars lost, through foregone contributions and permanent COLA savings, will come to $106.5 million in one year. The future costs of recovering from this loss will be substantially greater than the amounts in the 2016 TRA sustainability proposals.

At an annual cost increase of $43 million to state’s education funding beginning in the 2017-2018 school year, passing the TRA sustainability proposals into law would seem very timely given the strong financial standing of the state for the last seven years and the prospects for continued financial stability in Minnesota. Failing to pass the TRA sustainability proposals into law further threatens our future financial stability, destabilizes the pension fund, and sends future teachers and principals elsewhere for jobs. Minnesota cannot afford to pay the price of falling from the ranks of best among state education systems, either academically or financially.

Please support the 2016 TRA sustainability proposals, and thank you for taking your time to listen.


(add your name and address)