House Government Operations Committee OKs pension bill

The House Government Operations Committee approved the omnibus pension bill (HF 565) this morning on a voice vote.  TRA’s provisions remain in the bill. The bill was referred to the House State Government Finance Committee, which could meet as early as Monday at 10 am (in Room 10 State Office Bldg) to consider the bill. That Committee has not yet posted an agenda for its Monday hearing.

Rep. Tim O’Driscoll, as author of the pension bill, described the provisions of the bill and said that he did not have an amendment to delete TRA out of the bill (as was done Thursday in the Senate Finance Committee) and that there is still “work in progress” with TRA’s section of the bill.  In response to questions about funding for the bill, O’Driscoll acknowledged that there is no funding mechanism in the bill and that as the bill moves forward to other committees, he hopes pension funding will be added as part of a global agreement.  Rep. Mike Nelson stated that he could not support the bill, especially since no funding is included.

Several people testified on the bill. TRA’s Executive Director Laurie Hacking and Deputy Director Jay Stoffel testified and stated that while the bill met oboxne of the board’s four goals relating to financial stability, the bill did not meet the other goals of inter-generational equity, maintaining the recruitment/retention value of pensions and shared commitment.  Hacking pointed out that under the proposed bill, members (active and retirees) would bear 87 percent of the cost of the reforms (66 percent by actives and 21 percent by retirees).

Julie Bleyhl, AFSCME Legislative Director, read a statement on behalf of the 20 organizations that make up the Public Employee Pension Coalition and indicated that the group supports the governor’s pension proposal.  She pointed out that while some of the groups in the coalition support certain provisions of the proposed bill, they may have concerns with other provisions.

Education Minnesota Secretary-Treasurer Rodney Rowe stated his support for the TRA Board proposal because of its shared responsibility approach.  He voiced opposition to the proposed bill and warned that the benefit cuts in the bill would make the dire teacher shortage situation much worse. Retired Educators Association of MN President Lonnie Duberstein testified about how pensions are critical to the recruitment and retention of teachers. He said teachers are willing to accept modest wages from teaching if they can be assured of a modest retirement.

Doug Anderson, PERA executive director, indicated that while PERA supports lowering the investment assumption to 7.5 percent, its board opposes inclusion of the PERA General Plan provisions in the bill. Anderson commented that the board had reviewed the General Plan and found that it is sustainable with no changes needed at this time. Anderson indicated opposition to the bill’s proposed changes to the PERA Correctional plan but support for the PERA Police and Fire Plan changes, which are consistent with board recommendations.

Minnesota School Boards Association Government Affairs Director Grace Keliher testified that she was shocked by action taken by the Senate Finance Committee yesterday to remove TRA from the bill while the committee acted to include funding in the bill for other employer costs. She said that TRA has had several major cost increases for school districts in the past 10 years, and the latest proposal is “too much,” requiring the state to provide funding to cover the costs. Minnesota Association of School Administrators Executive Director Gary Amoroso similarly stated that additional dollars from the state are needed to cover the costs.

Jill Schurtz, SPTRFA Executive Director, testified in strong support of the bill and indicated that the St. Paul school district, retirees and actives are all supportive of the proposal.

courtesy of Minnesota TRA Communications