Pension commission OKs its staff bill on party line vote

MAY 10 – The Legislative Commission on Pensions and Retirement approved the omnibus pension bill this morning on a party line vote of 8-4. Members voting against the bill were Sen. Sandy Pappas (D-St. Paul), Sen. Dan Schoen (D-St. Paul Park), Rep. Paul Thissen (D-Minneapolis) and Rep. Mary Murphy (D-Hermantown).

The bill begins moving through other House and Senate committees starting today.

Before tboxhe bill passed, Pappas said she was disappointed there was not agreement in LCPR but indicated there is still potential to reach agreement on a bill that the governor would sign if everyone remains flexible. Pappas said most of the disagreements pertain to the TRA provisions and she is hopeful that with a few adjustments an agreement could be reached. Sen. Julie Rosen, (R-Vernon Center; LCPR chair), indicated she was willing to continue to work on the bill with the governor and feels that the commission has a good foundational bill.

Before considering a series of amendments to the bill, Thissen asked about funding to offset pension costs for state agencies and school districts. Rosen stated that as the bill moves through other committees, funding can be added, including a possible increase in the school aid formula for schools. Rosen said she and Rep. Tim O’Driscoll (R-Sartell) expected to meet with the governor on Monday regarding pensions but the meeting was cancelled.

Pappas said she has concerns about elimination of augmentation and the COLA delay, which she believes will create a rush to retire and have the unintended consequence of exacerbating the teacher shortage. She also advocated for more of a phase-in for lowering the investment assumption to 7.5 percent for TRA. Pappas criticized the 1 percent COLA proposal and the proposed increase in employee contributions, saying these measures are “too much” and do not achieve shared sacrifice.

With regard to a provision that would delay receipt of a retiree’s first COLA until the retiree reaches normal retirement age (66 for most TRA members), Pappas successfully offered an amendment to delay implementation from 2018 to 2023 for all the pension systems. She explained that members near retirement need time to accommodate the change. Rosen said she supported the amendment and it passed.

An amendment to replace the TRA provisions in the bill with proposals supported by the TRA Board of Trustees and stakeholders was offered by Pappas with support from Thissen, but the amendment failed on a party-line vote. Thissen noted that the commission usually proceeds with major pension changes only when the pension system boards and stakeholders are in agreement.

Thissen offered an amendment to remove PERA provisions from the bill since all who testified on these measures indicated opposition, including the PERA board, employees and retirees. This amendment failed on a voice vote.

Courtesy TRA Communications and Committee of Thirteen