The Legislative Commission on Pensions and Retirement (LPCR) met a number of times this legislative session and held its last regular meeting on Monday, April 17. Comprised of members from the House and Senate, it has produced an Omnibus Pension bill and a Pension Policy bill that have been sent on to the appropriate legislative committees.
The issues of priority to the LPCR included lowering the “assumed rate of return” from 7.5% to 7%. While this puts some downward pressure on the asset projections moving forward, the LPCR’s perspective is that it’s important that the assumed rate of return be on the conservative side as it makes policy decisions. MSRS changes include a two-year reduction in the employee contribution to 5.5% from 6%. A one-time “bonus” of 2.5% for current retirees is under consideration. The policy bill makes minor changes in the administration of the various state plans to make them more consistent and don’t make significant alterations to the MSRS plan.
The legislature will take up these items as the session progresses. The biggest takeaway for MGEC current and retired members is that the legislature does not see the current – and massive – budget surplus as something that can be used to justify any significant permanent change to state pensions. As Chair Her frequently says to union testifiers as the LPCR: “Show us where the long term money is to pay for the increases you’re demanding.” In other words, there simply isn’t a bipartisan consensus to significantly improve Minnesota’s public pensions right now.
If this is something that doesn’t sit well with you, let your legislator know!