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

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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

House passes 2018 pension bill

May 21, 2018 from TRA Communications

Moments before the 2018 legislative session was gaveled to a close, the House unanimously approved the Omnibus Retirement Bill after a brief introduction by co-author and pension commission member Rep. Tim O’Driscoll. The bill now goes to Gov. Mark Dayton.
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 a 1 percent retiree cost of living adjustment 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 COLA payments 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). 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.

House Passes Pension Stabilization Bill

With minutes left, House passes pension stabilization bill

By Melissa Turtinen

With just minutes left in the 90th legislative session, the House and Senate passed the omnibus pension and retirement bill.

The House passed HF3053/ SF2620*, as amended to include the House language, 131-0 late Sunday night. The Senate, which passed its bill 66-0 March 26, then had to act quickly to repass the amended version. It did, 67-0, and sent the bill to Gov. Mark Dayton.

Sponsored by Rep. Tim O’Driscoll (R-Sartell) and Sen. Julie Rosen (R-Vernon Center), the bill would help stabilize pension plans for more than 500,000 Minnesotans, including teachers, police officers, firefighters and other public employees.

Members and stakeholders have stressed the bill needs to be signed into law this year because the amount going into pension accounts won’t be enough to pay benefits in the years to come due to increased liabilities. The bill would bring the funded ratio for the plans closer to 100 percent by adding funding and making benefit reforms to save on costs.

O’Driscoll told the House Government Operations and Elections Policy Committee earlier this month the proposal “is the 2016, 2017 and 2018 omnibus pension bill all rolled into one.”

Dayton vetoed the 2016 and 2017 bills. This year, he said stabilizing state pensions should be one of the Legislature’s top priorities and asked for a clean bill.

Administration officials told the committee the governor supports the bill. It also has the support of representatives of the state pension plans.

May 15, 2018: House Ways and Means Committee OKs Pension Bill

With just six days to go in the legislative session, the 2018 Omnibus Retirement Bill cleared a key hurdle on Monday evening, passing out of the House Ways and Means committee with no amendments added.
The pension bill now heads to the House floor, where it must be heard by midnight Sunday. The bill then will have to make another stop in the Senate because a couple of non-controversial amendments were added last week in the House. The full Senate already passed the pension bill on March 26.
The governor has indicated that he will sign the bill into law as long as no “poison pill” amendments or conditions are attached to it.
Meanwhile, the retirement systems are monitoring the conference committee in which the pension systems’ Minnesota IT Services (MnIT) exclusion is in play. Language has been inserted into a bill that would consolidate the retirement systems, the Minnesota State Board of Investment and Minnesota State Lottery IT operations into MnIT. These agencies have operated for years under an exemption, and there have been repeated efforts to strike this provision from statute.
This exclusion has allowed the pension systems, SBI and the lottery, financial behemoths dependent on state-of-the-art technology and security, to keep IT operations in-house. Due in part to assertive lobbying by the retirement systems, SBI and the lottery, the exclusion was preserved when the issue arose in 2017.
The retirement systems estimate that there would be a significant increase in IT costs if the systems were consolidated under MnIT. The additional cost would be about $2.4 million per year for TRA alone.

2018 Sustainability Bill Passes Out of Pension Commission

The Legislative Commission on Pensions and Retirement (LCPR) on Tues., March 13, passed the 2018 omnibus pension bill. The next stop for the bill is the Senate State Government Finance Committee, which will hear it on Thurs., March 15, at 1 p.m. in Room 1200 of the Minnesota Senate Building.
The bill includes sustainability measures for all four public 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).
Details on the bill, currently moving as SF 2620 (Senate version)/ HF 3353 (House version), may be viewed on the State Legislature website.
Minnesota Management and Budget Commissioner Myron Frans told commission members that Gov. Mark Dayton endorses the pension bill in its current form and will include the funds in his supplemental budget. Frans said the bill is a “very important sustainability package” that has been several years in the making and includes measures to improve the financial health of the pension funds and the state.
The bill reduces liabilities by about $3.4 million immediately, lowers the rate of return on investments to a “reasonable” 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, Frans said.

KEY TRA PENSION BILL PROVISIONS
* COLA: 1.0% for 5 years (2019-2023), then increase by 0.1% per year in each of next five years (2024-2028) to 1.5%
* COLA delay to age 66  (effective 7/1/2024) (exempt: Rule of 90, disability, survivors, age 62/30 years)
* Early retirement: Increase penalties, 5-year phase-in (fiscal years 2020-2024), age 62/30 years exempt
* Employee contribution increase: +0.25% beginning in FY2024 (7.5% to 7.75%)
* Employer contribution increases: +1.25% phased in over 6 years, FY19-24 (7.5% to 8.75%)

Commission hears public comment on pension bill

The Legislative Commission on Pensions and Retirement (LCPR) on Tues., March 6, reviewed miscellaneous pension-related bills and again took up the 2018 Omnibus Retirement Bill. Numerous stakeholders spoke during the public testimony portion of the meeting.
Teachers Retirement Association (TRA) retirees from the group Retired Educators of Minnesota (REAM) said that REAM supports the pension bill as long as funding of the employer contribution portion is approved. REAM’s Lonnie Duberstein said that he is grateful for his defined-benefit pension and wants the same benefit to be preserved for the next generation of teachers.
Education Minnesota’s Rodney Rowe spoke to the recruitment and retention value of the TRA pension and said that his union supports the bill. Joan Beaver of REAM and Education Minnesota Retired and Louise Sundin of the Minneapolis Committee of 13 also spoke in support of the bill.
Representatives of school boards and administrators showed up in force to support the bill provided state pension adjustment aid is included. Scott Croonquist of the Association of Metropolitan School Districts thanked the commission for working out the pension adjustment formula, noting that because schools do not have general levy authority, such an aid provision is needed to offset increases in the TRA employer contribution.
Grace Keliher of the Minnesota School Boards Association, Valerie Dosland of the Minnesota Association of School Administrators, Fred Nolan of the Minnesota Rural Education Association, and Joel Albright of Schools for Equity in Education also testified in favor of the pension bill.
Public safety and firefighter representatives testified that a strong pension system is needed to recruit and retain police officers. Joe Dellwo of the Minnesota State Patrol Trooper’s Association noted that state troopers don’t get Social Security and said that the bill represents shared sacrifice by all parties.
Members of the Minnesota State Retirement System (MSRS) representing the state Pollution Control Agency and the University of Minnesota agreed that a healthy pension system helps attract and retain skilled public workers at a time when “brain drain” and succession planning are major concerns.
Public Employees Retirement Association (PERA) members from AFSCME testified that the 1 percent COLA outlined in the bill is hard to swallow, but the union supports the bill. It was noted that many PERA retirees have no Social Security coverage and are therefore deeply dependent on their state pensions.
Also on Tuesday, the commission reviewed separate bills dealing with state aid eligibility reporting for the Clearbrook Fire Department Relief Association, TRA coverage election authority for a Minnesota State employee, coverage for PERA part-time paramedics and emergency medical technicians employed by Hennepin Healthcare System, and clarifying PERA DC distributions for those still employed.
The pension commission intends to pass the bill at its next meeting, March 13 at 5:30 p.m. in Room 1200, Senate Office Building.

Courtesy TRA Communications

Cof13
 Committee of 13
Communications Extra:

It is important to let your Representative and Senator know how important the passage of the LCPR Pension Omnibus Bill is – to you and to all Minnesotan.
The Pension Bill has numbers in both houses:  SF 2620 and HF 3053.  Chair Rosen is working to get universal support in the Senate and Rep. O’Driscol, Vice Chair, is working to get support in the House. Governor Mark Dayton has agreed to put funding for pensions into his Supplemental Budget.