Pension Bill Passes

The new PERA Pension Bill has passed. HF3053 and SF2620

Public Employee Pensions have been a hot topic and the original proposals were to cut our annual Cost of Living Adjustment (COLA) down to a maximum of 1.5% with a minimum of 1%.

The PERA Corrections Pension under the new bill will be between 1% and a maximum 2.5% (COLA) based on the Federal cost of living index.

We have been at 2.5% and based on the economy should remain there for the foreseeable future.

See previous postings for all the grit.

Special thanks to Doug Anderson of PERA and the PERA Board for listening to Tom Perkins of MNPEA and myself and recommending to the legislature we cap out at our current 2.5% COLA. Also to my Representative Abigail Whelan for meeting with me and bringing our concerns to the Bill's authors to allow us to remain at the higher COLA.

To all CO's and retiree's out there remember, Teamsters Local 320, AFSCME Council 5 and LELS
had all agreed to cut our PERA Correctional COLA to 1.5%! They called it shared sacrifice.

Thank you legislature and PERA for hearing OUR voices.

PERA Correctional Pension Update

Good news on our Pension front. 

According to  PERA: Strong year for PERA investments.
The investment performance for PERA's three largest retirement plans--the General Employees, Police & Fire, and Correctional Plans--for the fiscal year ending June 30, 2017, was excellent. The Combined Fund posted a 15.1 percent rate of return for the 12-month period.

and from the PERA Newsletter 

CORRECTIONAL PLAN

The Correctional Plan legislative proposal includes a post-retirement increase to provide 100 percent of the Consumer Price Index (CPI), with a 1 percent floor, and a 2.5 percent cap until the Plan’s funding ratio drops below 80 percent for one year or 85 percent for two consecutive years. The funding ratio would be measured on the market value basis every year. If the funding ratio does not meet the required level, the post-retirement increase would be 100 percent of CPI, with a 1 percent floor, and a 1.5 percent cap. Once the lower cap applies, no further triggers would exist.

The proposal preserves the opportunity for a post-retirement increase as high as 2.5 percent provided that the funded ratio exceeds the existing trigger.

New Pension Bill

A new Bill has been introduced in the Minnesota  House and Senate affecting our PERA Correctional Pension (HF3053 and SF2620).

Originally the recomendation was to lump our PERA Correctional Plan in with all of the rest and give us only an annual cost of living adjustment (COLA) floor of 1% with a ceiling of 1.5% based on inflation. AFSCME called it "shared sacrifice." Teamsters and even LELS signed off on it. Willing to weaken the PERA Correctional Plan!

After Tom Perkins of MNPEA and myself met with PERA Executive Director Doug Anderson and the PERA Board, they recommended to the legislature that our PERA Correctional Plan have a floor of 1% with a ceiling of 2.5% based on inflation.

While I would prefer no change to our annual COLA of 2.5%, if change is going to come, at least we will maintain a COLA of 2.5% in times of inflation.

The new bills reflect that. Thank you Doug Anderson, PERA Board and legislatures.
Special thanks to Rep. Abigail Whelan for meeting with me early on and contacting the Bill's authors.

Liars, Representation and Pensions

On 2/16/18, Teamsters Local 320 Secretary Treasurer Brian Aldes had an editorial published in the Star Tribune.

I can't believe he had the audacity to discuss public employee pensions, "...pensions are promises employers make to their employees in the form of deferred compensation. Public employees pay into their pensions through contributions to the plan.."

Teamsters Local 320 actually had agreed to allow a cut in the Cost of Living for their CO's pension from 2.5% to 1.5% a year. They along with AFSCME, and LELS were unwilling to stand up for their CO's!  MNPEA was the only union to do so.

Brian's and the Teamsters main concern seems to be collecting dues rather than member representation. Had that been their goal the Hennepin County Detention Deputies and Dispatchers (911) wouldn't have decertified them in 2011, followed not much later by Minneapolis 911 who all went to MNPEA.

The crux of his editorial is the fear that Janus vs. AFSCME, Council 31 will be upheld by the Supreme Court. Why? Because then people won't have to pay dues if the Union isn't doing what they are being paid to do!

I am very pro-union, but if a union has forgotten they exist for the members, they serve no purpose.

PERA Board of Trustees approves legislative proposal for Correctional Plan

After meetings with myself and MNPEA Vice President Tom Perkins I am proud to share:

PERA Board of Trustees approves legislative proposal for Correctional Plan

The PERA Board of Trustees unanimously approved a legislative proposal for the Correctional Plan during their Jan. 9 special meeting. In December the Board approved legislative proposals for the General and Police & Fire Plans. The Board wanted PERA staff to receive additional input from stakeholder groups before voting on a legislative proposal for the Correctional Plan.

The modified Correctional Plan legislative proposal includes a post-retirement increase to provide 100 percent of the Consumer Price Index (CPI), with a 1 percent floor, and a 2.5 percent cap until the Plan’s funding ratio drops below 80 percent for one year or 85 percent for two consecutive years. The funding ratio would be measured on the market value basis every year. If the funding ratio does not meet the required level, the post-retirement increase would be 100 percent of CPI, with a 1 percent floor, and a 1.5 percent cap. Once the lower cap applies, no further triggers would exist.

The proposal preserves the opportunity for a post-retirement increase as high as 2.5 percent provided that the funded ratio exceeds the existing trigger which calls for that the funding ratio does not drop below the 80 percent for one year or 85 percent for two consecutive years.

Thank you PERA Executive Director Doug Anderson and PERA Board! Thank you Minnesota Public Employees Association (MNPEA) for standing with us!

No thanks to Teamsters Local 320, AFSCME Council 5 or LELS who were willing to let their Corrections Officer's cap out at 1.5%!

NEW PERA RECOMENDATION

After meeting with PERA Executive Director Doug Anderson he has emailed me a second PERA proposal.

This still has to go to the PERA Board but I believe Mr. Anderson heard what was said and has come up with a very reasonable responsible second proposal.

Here it is:

Proposal 1: Change to 100% of CPI, 1% floor, 1.5% cap. 

Proposal 2: 
*Change current COLA to 100% of CPI, 1% floor, 2.5% cap (currently a fixed 2.5%).

* Maintain the current “trigger off”, which is that the 2.5% cap turns off when funding is < 80% once or < 85% for two consecutive years. 

*If/when the “trigger off” occurs, the benefit goes to 100% CPI, 1% floor, 1.5% cap. 

*Eliminate any future “trigger on”. If the plan triggers off, it could never trigger back on. The benefit would remain 100% CPI, 1% floor, 1.5% cap.

In other words if CPI (inflation) is at least 2.5% or more we are guaranteed the 2.5% COLA. Depending on inflation we are guaranteed at least 1% but can go higher than the earlier proposed 1.5%.

I wish it were left alone, but the writing is on the wall for the legislature to eliminate triggers. The O'Driscoll/Rosen Bill wants to cap us at 1.5%,. The PERA proposal 2 would allow us to go up to our current 2.5% recognizing the health of our plan.

If we drop below the trigger we will join ranks with the other plans. I am a fiscal conservative and believe that is fair. If our plan is doing well we reap the benefit, if it gets weak we tighten the COLA belt. At the end of the day we want a healthy pension.

I again express my gratitude to PERA Executive Director Doug Anderson for taking time to listen to MNPEA Vice President Tom Perkins and myself.

This is not a MNPEA response, the MNPEA Board will meet and respond on their own.

As an interesting aside. We also learned at that meeting that LELS also met with PERA and was on-board with cutting the COLA to 1.5% of their CO's!

Remember, the legislature makes the laws that govern our pensions. PERA executes those laws. There is no guarantee the legislature will follow their recommendation. But if it comes to a fight at the Capital it's another arrow in the quiver.

To be clear, I prefer no change to our current Pension, as it is doing well. IF, they are are going to eliminate the triggers, I prefer the second proposal of the 2.5% COLA to the 1.5% cap.

PERA meeting and recommendation

Today MNPEA Vice President Tom Perkins and I met with PERA Executive Director Doug Anderson and Shayna (?).

They very graciously gave us an hour and a half. We all have the same goal of keeping our pension healthy. They have tremendous pressure to move the plans to 100% funding, a goal I agree with.

There is a proposal to lower the actuarial tables from 8% to 7.5%. If passed, this changes the amount considered fully funded. Under current law it's 8% and our payouts are based on that.

If the actuarial is lowered to 7.5% the proposal is to eliminate the triggers (read previous posts) and go to an across the board COLA formula. An annual COLA of 1% (as a floor) with a max COLA of 1.5% based on inflation (CPI).

In effect this cuts the PERA Correctional COLA a full 1% and the other, not as well funded plans only .5% and  *maintains 1% with no cut to the Police and Fire COLA even though they require $9,000,000 a year just to keep current funding.

This all leads to an assumed funding for the PERA General Plan and Police and Fire to be at 110% in 2047.

Ok, but the PERA Correctional Plan would be funded at 120% in 2047. With "shared sacrifice" we sacrifice more. It reminds me of the book Animal Farm. "All animals are created equal. But some are more equal than others."

PERA does not make law, but are frequently asked for recommendations. These recommendations mirror the O'Driscoll and Rosen Bill.

They gave us this meeting because as stakeholders, MNPEA and retirees of MNPEA, had no input into what they will propose. Now we have, again thank you Doug Anderson.

The hope is when they meet in January they will recommend, like last year, no change to the PERA Correctional Plan.

*Post corrected 12/22/17 I originally posted P&F would get a .5% COLA.

Meeting with my State Rep about our Pension

Just finished a very productive meeting with my State Representative Abigail Whelan. She met me at our local Dunn Brothers Coffee and we had a very productive conversation about the recent bills (HF 565, SF 545) that sought to lower our COLA. She was in agreement with our position and will be talking to Rep.O'Driscoll (one of the authors) about it.

As you know Governor Dayton vetoed them, but they were part of the Omnibus Bill and very likely will be re-introduced.

I cannot stress enough, please contact your State Representatives and Senators. Rep. Whelan also recommends this.

Stress that our PERA Correctional Pension is well funded.

There is no need for 'shared sacrifice' with less well run pensions.

There is already a trigger in our pension that if it drops below 80% funding our COLA automatically cuts to 1%. (We are funded at 95.7%).

PERA did not recommend any adjustments to our pension, only the Authors of the Bill (HF 565, SF 545) did.

I will be meeting soon with my State Senator Jim Abler.

I cannot thank Rep. Whelan enough for meeting me to hear our issue.

Some Details

As with most of you, I am a fiscal conservative. I have watched pension plans crash and burn. Like the Teamsters Central States pension.

To Minnesota's Credit, the PERA Board and legislature have historically done a great job of keeping our pensions solvent.

The last eight years were not particularly good for many pensions. The MSRS Correctional Plan, PERA Police and Fire, TRA (Teachers Union) and Judges pensions are not doing so well
and wisely some adjustments are being made to insure they remain solvent into the future.

Among proposals by Sen. Rosen in SF545 is to reduce the Cost Of Living Adjustment (COLA) of some of the plans, but not equally. Among them is to cut MSRA Correctional from a 2% annual COLA to 1.5% and to cut our PERA Correctional COLA from 2.5% to 1.5% so they are uniform.

Wait a minute. MSRA Correctional is way under funded and only gets a .5% reduction in it's COLA. The PERA Correctional Plan which is funded at 95.7% is asked to take a 1% cut in COLA!

The Legislative Commission's own actuarials on the PERA Correctional Plan state, "The funded status of the plan will increase gradually towards a 100% funded ratio."

It's disturbing to see Republicans like Sen. Rosen and her counterpart in the House, Rep. O'Driscoll, wanting to make things uniform. That sounds more like socialism than conservatism. Sadly, the vote was 100% in the Senate for this.

I can understand the cut to the MSRA Correctional Plan, but not the PERA Corrections Plan. They are two separate pensions, separate funding and one plan is anemic, the other healthy. Why give the healthy plan the bigger cut? This is unfair to County Corrections Officers.

Here's a large part of the problem. The largest Unions representing County Corrections Officers are MNPEA and LELS. We had no input!

The two groups that had input were Teamsters Local 320 (who lost almost all of their CO's) and AFSCME.  They were more interested is shoring up the pensions of their General Groups and Police, which make up a majority of their members.

AFSCME actually threw their approximately 100 CO's at the Hennepin County Workhouse under the bus. On their AFSME Council 5 website they call for shared sacrifice! Cutting our COLA does not help MSRS! If I were a Hennepin County Workhouse CO I'd scream bloody murder at AFSCME.

I leave you with a picture from AFSCME Council 5, calling for shared sacrifice! They plan on working against County CO's again in 2018. We have much work ahead.

Pension Watch Pt 3, what we are up against.

Watch the video, in it Sen. Rosen, Chairman of the Legislative Commission on Pensions and Retirement speaks of her bill.

Of note is the stated goal at the 3 minute, 30 second mark of "stabilizing the pensions at 90%."

Watch the video and then look at my comment son You Tube.

Pension Watch Part 2

So after much digging around here’s what I found out.

The PERA Board made no recommendations to change our pension.
It is 100% politically driven by the legislature.

The Bill (HF565) was introduced into the House by Rep. Tim O’Driscoll (R-Dist 13) and in the Senate (SF545) by Sen. Julie A. Rosen (R-Dist 23).

It died last time because Gov. Dayton vetoed it. But my understanding is it’s coming back.

Our PERA Correctional Plan already pays out the lowest benefit of any corrections or law enforcement pension in the state.

The Police and Fire pension pays out at a rate of 3% of their high 5 with a 1% annual COLA. They are only funded at 87.7%. (and they have a seat on the PERA board).

The State Corrections pension pays 2.4% a of their high 5 with a 2% COLA. (and they have a seat on their MSRS pension board).

Our PERA Correctional Plan pays out at 1.9% of our high 5 with a 2.5%  annual COLA because we are funded at 95.7%.

This Bill is patently unfair to PERA CO’s and Detention Deputies. We have the healthiest pension and the lowest payout! If they want to limit our COLA then make it fair and at least give us the 2.4% payout the State Corrections Officers get!

Rep. Tim O'Driscoll

The good news is that nothing can really be done on this until this summer. Our COLA is safe for 2018 and probably 2019 by the time they get anything done.

If we can get the authors of the Bill to withdraw the Bill or at least the part affecting us, we’ll be fine.

If not our pension will not keep up with the cost of living.

Contact Rep. Tim O'Driscoll  rep.tim.odriscoll@house.mn and ask him to withdraw our portion from his Bill.
Home: Sartell P.O. Box 225, 56377

Sen. Julie A. Rosen

Contact Sen. Julie A. Rosen sen.julie.rosen@senate.mn

Home: Vernon Center P.O. Box 428 56090

Ask her to withdraw out potion from her Bill.

When you contact them stress the unfairness.
Our pension is fully funded with the lowest payout.
Ask why they are punishing us! 

People who spend their lives in a dangerous career for public safety shouldn't get shortchanged at the end!



Feel free to contact me at my new email: pera.watchdog@gmail.com