That Was Then; This Is Now

We had a fantastic success in Minnesota teachers’ defined-benefit pension plan last spring. Here’s what shaped that public employee pension adjustment bill:

What were the factors making it necessary to pass a pension bill?

Mortality Experience: An experience study in 2015 evaluated all actuarial assumptions (economic and demographic) and recommended an adjustment to the mortality tables — TRA members and retirees are living longer — on average an extra two years, adding significant cost to the fund.

Who has the longest average life expectancies in the USA?
…….people born in Hawaii, age 81.3
…….people born in Minnesota, age 81.1
…….people born in Connecticut, age 80.8
…….people with higher education
And which of these are Minnesota teachers?

Investment Return Expectations: A “mini-experience study” in 2017 of the economic assumptions recommended a lower investment return assumption, from 8.5% to 7.5%. This adds significant liability to the fund.

However, It isn’t over yet. Future legislatures and administrations could undo all of that, and there will certainly be a big push from Arnold Foundation millions to bring us all into their high fee brokerage firms with a defined-contribution plan. While we fight back at the polls, Minnesota TRA is heading toward stabilizing and advancing those hard won pension system benefits.

TRA logoTRA Strategic Planning – Four Goals

Engagement and education
TRA will provide information to empower members, employers, legislators and taxpayers to be informed and engaged about TRA’s governance structure as well as the value of a defined-benefit plan. Member educational materials should be clear, accurate, accessible and presented in innovative ways for all life stages.

Fund integrity balanced with equity in plan provisions
TRA will abide by its fiduciary duty to ensure the financial stability of the plan while working toward fairness in benefit structure and contribution rates. TRA will continually monitor the plan’s financial health. When needed, TRA will recommend adjustments to stabilize the fund while upholding the board’s guiding principles of shared commitment, intergenerational equity, long-term financial sustainability and maintaining the recruitment/ retention value of a TRA pension

Engaged, empowered, high-performing workforce
TRA will demonstrate dedication, stability and inclusivity. Leadership and staff will respect all perspectives and experiences. Succession planning and operational workforce planning will support the transfer of knowledge from outgoing employees and the recruitment and retention of new and existing employees.

Risk-intelligent organization
TRA will be a risk-intelligent organization with a robust, proactive and comprehensive risk-management program. TRA will continue to monitor and respond to known and emerging risks.

TRA’s Mission:

Retirement security for Minnesota teachers

Support state’s education system by attracting and retraining teachers


Retire early? You need ‘at least $5 million,’ according to Suze Orman

This lifestyle leaves you exposed if disaster strikes

Suze Orman just threw cold water all over the FIRE movement that’s been spreading across the internet.
FIRE is short for “financial independence, retire early.” Work hard, make money, SAVE!!!, and, then, stop slaving away for “the man.”
Envision your dream of a flexible future and do what it takes to make it happen. Sacrifice now, enjoy later. That’s the gist.
On Reddit, there are more than 433,000 subscribers gathering to discuss their FIRE tips and experiences daily. “At its core, FI/RE is about maximizing your savings rate (through less spending and/or higher income) to achieve FI and have the freedom to RE as fast as possible,” the group’s description reads.
For many a work-worn millennial, it’s the Holy Grail. For one of the biggest names in personal finance, however, the approach has disaster written all over it.
“I hate it. I hate it. I hate it. I hate it.”
Tell us how you really feel Suze.
“Listen everybody. I know you want to retire at 25. At 30. At 35,” Orman told the “Afford Anything” podcast ( “But… as you get older, things happen.”
What things, Suze? That’s when the interview turned dark:
“You get hit by a car. You fall down on the ice, You get sick. You get cancer,” she said. “If a catastrophe happens, if something goes wrong, what are you going to do? You are going to burn alive.”
Then, Orman, with a net worth estimated to be in the neighborhood of $30 million, dropped a reality bomb of self awareness.
“Listen, if you have 20, 30, 50 or 100 million dollars, be like me, OK?” she said. “If you have that kind of money and you want to retire, fine.”
If not, and that’s most of us, better build that cushion, because, she says, if you stop stashing money, you’re losing the compounding years of your life.
“When you are younger, the money that you invest makes money and that money makes money and that money makes money,” Orman explained. “You cannot make up for that with sums of money later on in life.”
When Paula Pant, the host, asked what level of wealth would be necessary to comfortably reach FIRE, Orman threw out some big numbers.
“You need at least $5 million, or $6 million… Really, you might need $10 million,” she said — short of that, it’s just not going to be enough for most people.
“You can do it if you want to. I personally think it is the biggest mistake, financially speaking, you will ever, ever make in your lifetime,” she said. “I think it’s just ridiculous. You will get burned if you play with FIRE.”
Listen to the full podcast for more:
There was a range of responses. Some FIRE devotees, like Thomas Insall, appreciated hearing the other side of the argument
“Hearing such a strong, contrarian view from someone who’s spent their life hitting the ground hard and made so much for themselves is great!” he writes in the comments section. “If anything at all, Suze challenges us to revisit, reassess, potentially implement a warier eye and more conservative safeguards over ourselves for if/when we FI/RE.”
Reddit’s FIRE board, however, was much less supportive, in general. Here are just some of the criticisms lobbed her way:
“Suze doesn’t want you listening to anyone but Suze. She only promotes advice that supports something she previously said, and FIRE is way outside of her wheelhouse.”
“This is a situation where the old saying ‘Consider the source’ applies.”
“She had made millions on being the expert to tell you how to manage your money. If you can learn how to meet your goals just by reading the FAQ on a subreddit, her business model is f**ked.”
“Suze Orman is right: private planes and private islands are not cheap.”
What’s your take on FIRE and Orman’s distaste for it?
For more on this topic, check these out:
Here’s why you shouldn’t retire super early even if you can (
Why early retirement IS all it’s cracked up to be
People may be missing the point on retiring early (
The bad things about early retirement nobody talks about (
-Shawn Langlois; 415-439-6400;

October 03, 2018 17:39 ET (21:39 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.

Purposes of this blog

The Internet is a medium unique to the 21st century. It allows
communications which are virtually instantaneous and interactive. For current
teachers, the Internet is the primary or sole source of information. For some,
but certainly not all, retirees, the Internet is unfamiliar and unclear. Furthermore,
the rapidly changing landscape of the Internet challenges our adaptability and
should not be seen as a replacement for traditional media forms. Consequently,
the Internet has changed not only how we receive information but also changed
how we process that information, most especially how we trust what we see and
read – no matter its medium.
primary focus of the C of 13 Blog must be to effectively address our two
constituent groups: the retirees who depend upon their pensions and are more
willing to work to secure it, and the active teachers and principals who are
contributing from their paychecks into the retirement fund.

The groups have different perspectives on the pension fund and the messages sent to
them should be aligned with those perspectives. Yet our messages must be
consistent across both groups; they must never contradict one another. They
must also be well founded on the value to each group of the strength and
stability of the pension fund. What we say must be trustworthy, reasonable and
backed-up by evidence.

This must be accomplished in an age when truth is not the source of many messages
but rather the perceived truth derived from messages repeated loudly and often.

Jay C. Ritterson, editor

Legislative Update: 2018 Candidate Filings

     Filing for federal or state office in Minnesota is officially closed as of yesterday at 5:00 p.m., but not without some surprises. Last weekend, both political parties held conventions to endorse candidates for statewide office. However, multiple candidates who do not have the party endorsement are still seeking the support of voters of their respective parties in the primary, which will take place on August 14. Candidates currently filed for office have 48 hours to withdraw their name. The primary will determine which candidate will appear on the November ballot. Below is a summary of candidates who filed for statewide constitutional offices.
Governor – Lieutenant Governor (DFL)
Three tickets of well-known members of the Democratic-Farmer Labor Party have filed to run for Governor and Lieutenant Governor.
•     Rep. Erin Murphy & Rep. Erin Maye Quade (DFL-endorsed)
•     Congressman Tim Walz & Rep. Peggy Flanagan
•     Attorney General Lori Swanson & Congressman Rick Nolan

Swanson’s surprise decision earlier this week to run for Governor instead of seeking re-election has created an open seat for Attorney General, the first time the office hasn’t had an incumbent seeking re-election since 2006.
Governor – Lieutenant Governor (Republican)
Two tickets featuring members of the Republican Party have filed to run for Governor and Lieutenant Governor.
•     Hennepin County Commissioner Jeff Johnson & retired Lieutenant Colonel Donna Bergstrom (Republican-endorsed)
•     Former Governor Tim Pawlenty & Lieutenant Governor Michelle Fischbach
Secretary of State (DFL)
•     Incumbent Secretary of State Steve Simon is unopposed in the primary as he seeks re-election to a second term.
Secretary of State (Republican)
•     Former State Sen. John Howe is the Republican-endorsed candidate to challenge incumbent Democratic Secretary of State Steve Simon.
State Auditor (DFL)
Two candidates filed to run to receive the DFL nomination for State Auditor to succeed incumbent State Auditor Rebecca Otto, who is not seeking a fourth term.
•     Julie Blaha (DFL-endorsed)
•     Jon Tollefson
State Auditor (Republican)
•     Former state Rep. Pam Myhra was unanimously endorsed by the Republican Party of Minnesota to run for State Auditor and faces no competition in the primary.
Attorney General (DFL)
Six major candidates have filed to run to succeed Attorney General Lori Swanson, who announced she is running for Governor.
•     Matt Pelikan (DFL-endorsed)
•     Congressman Keith Ellison
•     Former Attorney General Mike Hatch
•     State Rep. Deb Hilstrom
•     Former Commerce Commissioner Mike Rothman
•     Former Ramsey County Attorney Tom Foley

Attorney General (Republican)
Three candidates have filed to run for Attorney General in the Republican Party.
•     Former State Rep. Doug Wardlow (Republican-endorsed)
•     Former State Sen. Robert Lessard
•     Sharon Anderson

U.S. House of Representatives – 5th District
With Ellison’s decision to run for Attorney General, his seat in the U.S. House of Representatives will be open. Current legislators who have filed for Ellison’s seat in Congress (District 5) include:
•     State Sen. Patricia Torres Ray,
•     State Sen. Bobby Joe Champion,
•     State Rep. Ilhan Omar.
•     Margaret Anderson Kelliher, former MN Speaker of the House
•     Julie Sabo, former State Senator
•     Kim Ellison, Minneapolis School Board member
•     Frank Nelson Drake
•     Jamal Abdi Abdulahi

Medicare Advantage Plans for 2019

Sourced from Senior Life Insurance

While Original Medicare rarely changes, many insurance watchers expect Medicare Advantage plans for 2019 to vary quite a bit from the previous years. Medicare Advantage plans, sometimes called Medicare Part C, can offer a beneficiary an alternate way to receive their healthcare benefits after being enrolled in Medicare Part A and Part B. Rather than having coverage delivered by the government, a Medicare Advantage plan has payments made by a private insurance company.

Changes to Medicare Advantage Plans for 2019

As always, it’s important to watch for updates during the Annual Election Period to see if any changes to your Medicare Advantage plan for 2019 will impact you. If you’re new to Medicare, you’ll also have a chance to compare Medicare Advantage plans for 2019 during your Initial Coverage Election Period for Medicare Part A and Part B. Continue on to learn about some changes to 2018 Medicare Part C that could impact premiums, benefits, and enrollment times.

2019 Premium and Benefit Changes for Medicare Advantage Plans

You’re probably most interested to know if your premiums will change for your Medicare Advantage plan for 2019. One of the reasons that interest in Medicare Advantage plans has grown so fast is that it is possible to join many of them with a very low or even a $0 premium. While your insurance company might not have released updates for rates yet, it’s possible to make some predictions based upon a press release from CMS about costs for Medicare plans for 2019:
•Anticipated increases in costs: Between 4% and 5%
•Anticipated revenue growth for insurers: Less than 2%

These cost and revenue increases may impact Medicare Advantage Prescription Drug plans, stand-alone Part D, and MA plans without drug benefits. In some cases, insurers may not pass along these costs as increases to premiums for customers; however, they might increase copayments, coinsurance, or deductibles.

The trend of finding fewer Medicare Advantage plans for 2019 with a $0 premium will probably also continue. At the same time, plan quality has continued to increase. For 2019, the government also hopes to tune the five-star rating system and to make it more transparent for consumers and insurance companies.

New Annual Election Period Medicare Advantage Plans in 2019

CMS also announced that they will do away with the Medicare Advantage Disenrollment Period for a Medicare Advantage plan for 2019. Beneficiaries used to only be able to drop their Medicare Advantage plan, enroll in Part D, and resume Medicare Part A and Part B during the first six weeks of the year.

There will now be a new Annual Election Period for the first three months of the year, and this in addition to the typical Annual Election Period each fall. This gives Medicare beneficiaries extra time to compare changes to their current Medicare Advantage plan, switch to a new plan, or even to drop out and just remain enrolled in Medicare Part A and Part B. This gives people more time to make sure they made the best choice. During this second Open Enrollment, only one plan switch is allowed.

2019 Changes to Dual-Eligible Medicare Advantage Plan Enrollment

People who have both Original Medicare and Medicaid may choose a dual-eligible plan only one time during each quarter during the initial nine months of the year. They used to have the option of a month-to-month Special Enrollment Period. This includes Medicaid-Medicare options for Special Needs Plans SNPs or typical HMO MAPD plans.

Other Enrollment Notes for Medicare Advantage Plans for 2019

Medicare Part C won’t change its enrollment qualifications for 2019. Basically, you must have Original Medicare and not suffer from End Stage Renal Disease ESRD. People who have ESRD have other options. You can also find Special Needs Plans to help manage other chronic illnesses or situations.

Once you enroll in a Medicare Advantage plan, expect your insurer to send you a new ID card. You will usually take this card to the hospital, doctor, or another healthcare provider instead of your Medicare Part A and Part B ID card.

Popular Choices for Medicare Advantage Plans for 2019

It’s too early to know exactly how people will choose their Medicare Advantage plan in 2019. It is possible to publish some recent statistics of enrollment to make some predictions.

These are some enrollment statistics for Medicare Advantage plans in the past year:
•Total enrollment in a Medicare Advantage plan: Over 18 million
•Percent of enrollment out of all qualified for Medicare Part A and Part B: 33 percent
•Increase in enrollment in MA plans one year: two percent
•Percent in Health Maintenance Organization HMO plans: 63 percent
•Total Preferred Provider Organization PPO plans: 33 percent

Tips to Compare Medicare Advantage Plans for 2019

2019 Changes to Part D and MAPD

You can enroll in a MAPD that will bundle Part D drug benefits with medical benefits. In this case, make sure you check the formulary, or covered drug list, to find any prescriptions that you rely upon. Note that each insurer will have Prescription Drug tiers or drugs that they may cover at different benefit levels. For instance, you will probably have to pay more of the cost of brand-name medicine than for generic medicine.

In 2019, the infamous “Donut Hole,” or gap in RX coverage with Medicare Part D, will be closing. AARP reported that this gap has been slowly closing since the ACA implementation in 2010 and wasn’t expected to completely close until 2020. Now, it’s expected to close a year early in 2019, so many seniors will spend less for their prescriptions.

Understanding Kinds of Medicare Advantage Plans

The vast majority of choices for a Medicare Advantage plan for 2019 will rely upon provider networks to help control costs. Medicare Part A and B do not use networks, so if you’re used to original Medicare, you may need to spend some time understanding how these provider networks work.

If you choose an HMO, you need to get almost all of your covered health services from in-network providers. You also need a primary care doctor, or PCP, to give you referrals to specialists and certain other medical care. This means that you need to be sure that your favorite doctor and hospital are associated with the network. A PPO may charge higher rates, but it will cover out-of-network services. You still will save money with a PPO if you find in-network doctors and other medical providers.

Changes to Look for with Medicare Advantage Plans in 2019

Some MA plans offer additional benefits that you can’t get with Medicare Part A and Part B. These could include wellness programs, coverage for routine hearing and dental, and so on. Every year, you should check changes to provider networks and drug coverage to make sure the plan still serves your needs the best. Beyond this, you may expect modest increases in premiums or decreases in benefits or provider networks in 2019.

Governor signs 2018 pension bill

Gov. Mark Dayton has signed the 2018 Omnibus Retirement Bill into law.Governor signs 2018 Pension Bill

“That’s the last bill I’ll sign as governor of Minnesota and what a great way to end on,” Dayton said at the May 31 signing ceremony in the Capitol rotunda, which was packed with Minnesotans from all walks of public service.
The bill includes sustainability measures for all four of Minnesota’s public employee pension systems: the Teachers Retirement Association (TRA), the Public Employees Retirement Association (PERA), the Minnesota State Retirement System (MSRS), and the St. Paul Teachers Retirement Fund Association (SPTRFA).

For TRA, the law calls for reducing the retiree cost of living adjustment from 2 percent to a 1 percent for five years (2019-2023), then increasing by 0.1 percent per year in each of the following five years (2024-2028) to 1.5 percent. The law also includes a provision to delay the initial COLA to age 66 (effective July 1, 2024). This provision exempts those who retire under Rule of 90, age 62 with 30 years of service, disability benefits or survivor benefits.

The 2018 law includes a 0.25 percent employee contribution increase beginning July 1, 2023 (from 7.5 percent to 7.75 percent) and an employer contribution increase of 1.25 percent, from 7.5 percent to 8.75 percent, phased in over six years (fiscal years 2019-2024).

The law also changes reduction calculations for early retirement over a five-year phase-in period (fiscal years 2020-2024). Those who retire at age 62 with 30 years of service are exempt.
These measures reduce liabilities by $2.0 billion for TRA alone.

Upon passage in the Senate in March, pension bill co-author and chair of the  Legislative Commission on Pensions and Retirement (LCPR) Sen. Julie Rosen praised the engagement of those who have worked for three years on a pension sustainability package with “significant benefit reforms” as well as contribution rate increases for employers and employees. Rosen said the effort reflects “true shared sacrifice.”

The bill reduces liabilities by about $3.4 million (all four systems) immediately, lowers the rate of return on investments to 7.5 percent, puts the plans on the path to full funding, provides funding to schools to offset increased pension contributions, ensures that unfunded liabilities won’t weigh down bond ratings, and safeguards the retirement security of public employees for the future.

Minnesota Management and Budget Commissioner Myron Frans earlier this year described the effort as a “very important sustainability package” that would improve the financial health of the pension funds and the state.

“We couldn’t have done it without the support of all stakeholder groups,,” said TRA Executive Director Jay Stoffel. “This is a great step forward for the retirement security of the members, for the health of the pension fund and for the state of Minnesota.”

Passage of a pension sustainability package comes after failed attempts in 2016 and 2017 to address funding issues resulting from changes in public employee longevity and lower anticipated investment returns.

The TRA Board of Trustees endorsed the sustainability measures with the stipulation that contribution increases be funded, and that legislation reflect the board’s guiding principles: shared commitment, long-term financial stability, intergenerational equity and maintaining the recruitment and retention value of the TRA pension.

Among the administrative provisions affecting TRA are updates to actuarial assumptions used to assess the plan’s financial health. The most significant of these is a lowering of the assumed rate of return on investments from the current 8.5 percent to 7.5 percent. The assumed rate of return is a powerful mechanism; lowering it increases TRA’s liabilities and lowers the plan’s funded ratio.

Courtesy of Minn TRA Communications

End of Medicare Part C Freedom (cost) Insurance


If you are one of the 400,000 seniors in Minnesota on Medicare who have Blue Cross Platinum Blue, Medica Prime Solution, or Health Partners Freedom plan as your health insurance plan, your plan is a “cost plan.” Cost Plans were closed to new members as of December 31, 2017. However, those of us who had/have these plans were allowed to keep them through the end of 2018. Cof13If you have Blue Cross Platinum Blue, Medica Prime Solution, or Health Partners Freedom you will receive an ANOC (Annual Notice of Changes) letter sometime in June informing you that your plan is being cancelled. You will also receive a letter from your cost plan company passively enrolling you in an Advantage plan of your current carriers’ choosing. The plan assigned to you will be a networked plan which may or may not have your doctors included! That plan may also have very high co-pays and/or deductibles as high as $10,000 out-of-pocket expense! If you do not OPT OUT you will be deemed automatically enrolled by the carrier.
(If you do not have one of these Medicare supplement plans but rather have an Advantage Plan, these changes will not impact you.)
Your Retiree Health Care Coalition (MRTI, RTC59, & C of 13) is offering several general information meetings to explain what this cancellation means to you, and what new options will be available to you, AND how to opt out of a plan you do not want. You are invited to attend one of the meetings listed to become aware of the status of Medicare Health Insurance supplements in Minnesota. Sign up by June 30. Leslee Gold, MN Medicare Consultants, will be our resource for this meeting.


Monday, August,20 10:00 am-noon, MFT 59 Office, 67 Eighth Ave. NE, Minneapolis
To attend this session contact: Denny Lander @ or 612 926-8478

Tuesday, August 21, 10:00 am-noon, MFT 59 Office, 67 Eighth Ave. NE, Minneapolis
To attend this session contact: Joanne Lambrecht @ or 952-212-2255

Wednesday, August 22, 10:00 am-noon, EAGLES Club, 25th St. & 25th Ave. S., Minneapolis
To attend this session contact: Gayle Marko @ 952-920-1395

Thursday, August 23, 10:00 am-noon, EAGLES Club, 25th St. & 25th Ave. So., Minneapolis
To attend this session contact: Elmer Koch @ or 952-888-7321

At these meetings we will announce dates for a set of small group meetings beginning in October to ensure each and every member gets the opportunity to receive assistance selecting a suitable Medicare insurance supplement that will best fit their needs.
If you live in Greater Minnesota and cannot make one of these metro meetings, please contact Louise Sundin 612-868-6042 to explore ways to get information to you.