Wednesday, March 21, 2001     2^nd Subcommittee Meeting
Room 316 Capitol

SERVICE CREDIT PURCHASE SUBCOMMITTEE
of the
LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

Senator Don Betzold, Chair of the Subcommittee, called the meeting to order at 6:15 p.m.

Subcommittee members present:

Representatives Mary Murphy and Steve Smith
Senators Don Betzold and Dan Stevens

Because these bills address the situation of the same individual, they were considered together. Representative Entenza testified on behalf of his constituent and background information on the issue.

The bills were tabled until later in the meeting.

Senator Hottinger and Representative Ruth Johnson testified in support of the bill. Mr. Linn Ford, the person affected by the bill, testified in support of the bill.

Mr. Edward Burek, Deputy Director, Legislative Commission on Pensions and Retirement, reviewed the staff materials and policy issues raised by the bill, and discussed potential amendments.

Mr. David Bergstrom, Executive Director, MSRS, testified that position of Social Worker I is not covered under the Correctional Plan.

Mr. Burek summarized the staff materials and policy issues raised by the bill.

Senator Pappas and Representative Dawkins testified on behalf of their constituent, and Ms. Deborah Montgomery, the person affected by the bill, testified in support of the bill.

Mr. Michael Jordan, former Commissioner of the Minnesota Department of Public Safety, testified that he considered Ms. Montgomery to be an employee of the State. He also said that when they tried to rectify the situation in 1994, the City believed the situation to be the State’s responsibility, and the State believed the situation to be the City’s responsibility, and that they were unable to come to a resolution.

Ms. Mary Vanek, Executive Director, PERA, testified that at the time the group consolidated, Ms. Montgomery elected PERA-P&F coverage. PERA contacted the City that they were required to make contributions based on the actual pay she would be receiving in her position as a police officer in the City. Ms. Vanek said that she contacted PERA’s legal advisor and was advised that PERA could not compel the city to make contributions on the additional salary because the mobility assignment specified the same salary as she would be earning as a police officer with the City. Ms. Vanek pointed out that Ms. Montgomery was not eligible to participate in the Unclassified Plan because the relief association bylaws at that time prohibited contributions on overtime salary.

Mr. Terry Haltiner, City of St. Paul Labor Relations Manager, testified that he was involved in the negotiations at the time, and that the City’s position was that she was working at the State but remained a City employee for seniority purposes. Her pension contributions were paid only on a 15-year police officer’s salary rate. After the consolidation, they would have made contributions on the full salary.

Senator Berg testified on behalf of his constituent, Lori Schwendemann. He said that the county board met and they came to a verbal agreement that Ms. Schwendemann would pay her portion and the county would pay the difference. They will forward written confirmation.

Representative Murphy said that she spoke with Representative Peterson about the issue, and that she does not believe Ms. Schwendemann should have to compromise. Senator Berg said that he would like to see a mandated county payment.

Representative Murphy moved LCPR01-102. MOTION PREVAILED.

Representative Murphy moved S.F. 205; H.F. 316, as amended, be forwarded to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Representative Cassell testified in support of his bill, and offered amendment H303A1, which redrafts the bill from a generalized bill to an single-person bill. Chief Charles Nettestad testified in support of the bill.

Representative Smith moved H303A1. MOTION PREVAILED. The bill was tabled until later in the meeting.

Representative Murphy moved H.F. 1693 be forwarded without recommendation to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Mr. Burek reviewed the staff materials and policy issues raised by the bill.

Mr. Jim Grathwol, Minneapolis Public Schools, testified in support of LCPR01-55 and said that the school district is willing to work in cooperation with Ms. Lenarz.

Representative Murphy moved LCPR01-55. MOTION PREVAILED.

Representative Murphy moved S.F. 59, H.F. 87, as amended, be forwarded to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Senator Betzold informed Subcommittee members that Senator Belanger desired his bill to be considered as originally drafted and not as previously amended by the Subcommittee.

Representative Smith moved to reconsider the motion by which the Subcommittee adopted amendment LCPR01-56. MOTION PREVAILED.

Ms. Karen Kilberg, Executive Director, MTRFA, testified that MTRFA’s definition of "year of service", is 125 days, which is shorter than the other teacher funds, and that MTRFA has never made an exception to the 125-day rule, This bill would set a precedent she would prefer to avoid.

Mr. Jim Grathwol, Minneapolis Public Schools, testified that at a certain period in her employment, the individual involved chose to work part-time.

Representative Smith moved LCPR01-119. MOTION PREVAILED. The bill was tabled.

Representative Rukavina testified in support of his bill and provided background information.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the issues raised by the bill.

Mr. Gary Austin, Executive Director, TRA, testified that he did not have any further information to add.

Senator Betzold asked Representative Rukavina to work with Mr. Austin to get more information.

Representative Thompson said that there had been further discussion as to the eligible dates for coverage, specifically for Ms. Rootes.

Mr. Brian Rice, attorney for the Minneapolis Park Board, testified that they were able to gather some more information. Based on the annual numbers, Ms. Rootes would be eligible but Ms. Longie would not unless they could find some monthly data. He testified in support of LCPR01-67.

Ms. Mary Vanek, Executive Director, PERA, testified that she would be comfortable with the amendment that references purchasing service that is not otherwise excluded under law as it would give them time to verify the payroll records to determine what is the appropriate date.

Representative Murphy moved LCPR01-67. MOTION PREVAILED.

Representative Murphy moved S.F. 656; H.F. 732, as amended, be forwarded to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

At this point the Subcommittee reviewed several of the individual bills for possible Subcommittee action:

• S.F. 1571; H.F. 1757. There was no action on this bill.
• S.F. 1581; H.F. 1579. There was no action on this bill.
• S.F. 315; H.F. 356. As neither author nor the affected individual were present to testify on this bill, the bill was not heard.
• S.F. 106; H.F. 163. There was no further action on this bill.
• S.F. 314; H.F. 295. Mr. Burek reviewed the issues behind this bill, noting that the Commission has never before taken action on an issue of this sort. Representative Cassell provided further testimony. Senator Betzold said he would advise the Commission Chair that the issue be considered for Interim Study.
• S.F. 329; H.F. 134 and S.F. 732; H.F.142 were considered at the same time and Mr. Burek reviewed the bills. Representative Boudreau appeared in support of her bill. Mr. David Bergstrom, Executive Director, MSRS, provided further information on the number of DOT employees who have prior service that is not covered by MSRS (of 1037 active members, 1037 have some service that is not eligible). He stated his preference would be to address these requests as individual bills rather than as general legislation. There was no further action on these bills.

Mr. Terry Haltiner, City of St. Paul Labor Relations Manager, said that he looked into the issue quite extensively and was unable to find any records as to why there was a nine-month gap in Mr. Levine’s coverage and that there is no indication that any error was made, and the City’s position is that the City should not be required to contribute.

Mr. Eugene Waschbusch, Secretary-Treasurer, St. Paul Teachers Retirement Fund Association, testified that their records show contributions through June 30, 1974, at which time his contributions ceased. There is no further information in their records.

Representative Murphy moved S.F. 737 be forwarded without recommendation to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Mr. Burek reviewed the bill and discussed the potential amendments.

Mr. Gary Austin, Executive Director, TRA, testified that one of the problems TRA has with the bill is that the calculation contemplates an active employee and is based on prospective service until retirement age, and that there is no TRA service.

These three bills were discussed all together by the Subcommittee since they all contain provisions concerning the purchase of University of Minnesota teaching service.

Mr. Burek explained that the provision in S.F. 1321 is more generalized and would permit TRA members to purchase University of Minnesota teaching service. That provision would take care of Mr. Pung’s situation (S.F. 1273; H.F. 1215), but would not apply to Ms. Johnson’s situation (S.F. 1114; H.F. 726) because she is not a member of TRA and therefore would not be eligible.

Mr. Russ Stanton, representing the Inter Faculty Organization, said that he was contacted by Senator Pogemiller’s office and was asked to review the relevant provisions contained in S.F. 1321.

• S.F. 1321 (Pogemiller); H.F. 1462 (Mares)
  Representative Murphy moved amendment LCPR01-39. MOTION PREVAILED.
  Representative Murphy moved amendment LCPR01-46. MOTION PREVAILED.
  Representative Murphy moved amendment LCPR01-44. MOTION PREVAILED.
  Representative Murphy moved S.F. 1321; H.F. 1462, as amended, be forwarded to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.
• S.F. 1273 (Ring); H.F. 1215 (Jennings) would not be necessary as this person’s situation is covered by the provisions in S.F. 1321; H.F. 1462.
• S.F. 1114 (Sabo); H.F. 726 (Skoglund)
  Mr. Burek reviewed the various potential amendments to the bill.
  Representative Murphy moved amendment LCPR01-80. MOTION PREVAILED.
  Representative Murphy moved S.F. 1114; H.F. 726, as amended, be forwarded to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Senator Betzold asked once again if anyone was present to testify on S.F. 315; H.F. 356. There was no response.

These two military service credit purchase bills were considered simultaneously by the Subcommittee. Representative Swapinski testified in support of his bill (H.F. 619). There was no action on the bills.

Senator Betzold reminded Subcommittee members of action taken on this bill earlier in the meeting.

Mr. Martin said that this bill concerns the same sort of circumstance to that contained in S.F. 314; H.F. 295, which was recommended for Interim Study.

Representative Cassell testified in support of his bill and emphasized the differences between his bill and the previously-discussed S.F. 314; H.F. 295.

Senator Stevens moved S.F. 314; H.F. 295 and S.F. 313; H.F. 303 be recommended for further study by the Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Senator Betzold reminded members of Representative Skoglund’s testimony at the previous meeting.

Mr. David Bergstrom, Executive Director, MSRS, testified that the leave provision is at full actuarial value, and that some of the provisions are already covered by MSRS law. He said that MSRS did not oppose the bill.

Representative Murphy moved S.F. 517; H.F. 122 be forwarded to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Mr. Martin reviewed the provisions contained in the bill. He explained that the military purchase limits in current law may be in conflict with federal law, and that this bill is an attempt to address that possible conflict.

Mr. Gary Austin, Executive Director, TRA, testified that it is the opinion of the Minnesota Assistant Attorney General that the federal laws do prevail in this situation.

Representative Murphy assumed the position of Chair.

Senator Betzold moved S.F. 611; H.F. 122 be forwarded without recommendation to the full Legislative Commission on Pensions and Retirement. MOTION PREVAILED.

Senator Betzold resumed the Chair. He asked if there was any person present to testify on any item that was not discussed. He then thanked Subcommittee members and staff for their long hours of service.

The meeting adjourned at 8:47 p.m.