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The bill contains measures that would place the Public Employees Retirement Plan Police and Fire Fund (PERA P&F) on firmer financial footing.
(Published May 19, 2013)
The conference committee report on the omnibus pension bill, SF 489 (Sen. Sandy Pappas, DFL-St. Paul/Rep. Mary Murphy, DFL-Hermantown) was passed by the Minnesota Senate on a vote of 38-27 on May 17. The measure was passed on May 18 by the full House on a vote of 77-53. The next stop for the package is the governor’s desk.
The bill contains measures that would place the Public Employees Retirement Plan Police and Fire Fund (PERA-P&F) on firmer financial footing. It also repeals the Pre-Age 62 Supplemental pension option, and allows unmarried couples covered by a survivor option pension to rescind that decision upon mutual agreement.
The PERA-P&F legislation incorporates the following changes:
Legislation that would have implemented a $5 surcharge on auto and homeowner insurance policies to help fund public safety pension funds in the state stalled in the Tax Conference Committee. As of May 18, the Tax Conference Committee has included a $15.5 million general fund appropriation for this purpose.
The bill is expected to reach the governor’s desk in the coming days, and he is expected to sign the measure into law.
According to PERA’s actuaries, the plan currently has a funding deficiency representing approximately 7.9 percent of active members’ salaries. That means, absent any other changes to the plan, combined member and employer contributions would need to increase nearly 8 percent to fully fund the plan by 2038, the date mandated by law for full funding. Nearly all agree increasing contributions alone to address the problem is financially impossible. Although the 2012 merger of the Minneapolis fire and police relief associations with the P&F Plan bolstered the number of plan retirees, it does not factor into the plan's funding difficulties. The law providing for the merger mandates that any additional cost to the plan is the responsibility of the City of Minneapolis.
Questions? Contact Anne Finn at firstname.lastname@example.org or at (651) 281-1263.
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