October 9, 2001

10th Meeting

Eagan City Hall Council Chambers
3830 Pilot Knob Road, Eagan

  

LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

MINUTES

Senator Dean E. Johnson, Chair of the Legislative Commission on Pensions and Retirement, called the meeting to order at 9:20 a.m. Senator Johnson expressed his appreciation to the City of Eagan for the use of its facilities, and he announced the appointment of Representative Ann Lenczewski to the Commission.

Commission members present:

Representatives Harry Mares, Mary Murphy, and Steve Smith
Senators Don Betzold, Dean Johnson, Lawrence Pogemiller, Dan Stevens, and Roy Terwilliger

Commission members absent:

Representatives Philip Krinkie and Ann Lenczewski

Agenda items discussed:

  1. Approval of Minutes of the Commission Meeting of September 13, 2001

    2. Senator Betzold moved approval of the minutes for the Commission meeting of September 13, 2001. MOTION PREVAILED.

  2. Mandated Commission Interim Project; Appropriate Mechanism for the Recovery of Unpaid Member and Employer Retirement Plan Contributions from Closed Charter Schools (First Consideration)

    3. Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reminded members that the issue came up during the 2001 Session, that the Commission did make a recommendation on a mechanism, but it became controversial and a study of the issue was mandated by the Commission. He said staff believes that the topic will require three Commission meetings to complete the discussion necessary to produce the required report and draft legislation by the February 15, 2002, report deadline. Mr. Martin then reviewed the staff memo covering background information on the topic of unpaid retirement plan contributions by closed charter schools. He informed members that the next Commission staff memo will set forth possible remedies for recovering unpaid contributions and for preventing future unpaid contributions.

    Mr. Eugene Waschbusch, Secretary/Treasurer, St. Paul Teachers Retirement Fund Association, testified that there was a misunderstanding when his staff provided information to Commission staff – they have collected all monies from charter schools at this time. He also said they get information every month from charter schools with the contributions that members make, but they often first find out that a charter school is in trouble from the newspaper.

  3. Designated Commission Interim Project; Identification of Governmental Revenue Sources Underlying Public Retirement Plan Funding (First Consideration)

    4. Mr. Edward Burek, Deputy Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo. Mr. Burek asked for direction from the Commission regarding this issue. Senator Betzold suggested further research into the disparities for a few comparable samples.

  4. Designated Commission Interim Project; Review of Various Benefit Increase Proposals

Representative Irv Anderson and Judge Peter Hemstad, retired district judge from International Falls, testified in support of the bill and Judge Hemstad provided information about his situation.

Mr. David Bergstrom, Executive Director, MSRS, testified that when Mr. Hemsted was granted disability, MSRS had no knowledge of the upcoming law so there was no way they could have informed him of the upcoming change. There was no discussion or discretion over being able to serve past the July 1st date. He also testified that the bill, as written, applies only to Judge Hemstad, but there are 100 judges who could conceivably be impacted if the proposal were expanded retroactively to all who retired under the Combined Service Annuity provision.

Ms. Sandy Neren, lobbyist for the Minnesota District Judges Association, testified that the original law passed in the 2000 Session was a Judges Association bill. She said that they were unaware of Judge Hemstad’s unique situation at that time and, had they known, they might have prevented the situation by requesting an earlier effective date. Ms. Neren clarified that the Judges Association is not sponsoring this bill and they are neutral on the issue.

Ms. Jan Alswager, Education Minnesota, provided general comments and a written document regarding the state of our teachers retirement system as compared to other states.

Mr. Martin reviewed the staff memo and policy issues raised by the bill and all of the various benefit increase proposals.

Mr. Gary Austin, Executive Director, TRA, testified in support of the bill. He said that TRA and its board was concerned about the teacher shortage and wanted to provide a retention incentive for teachers and explained how the board chose this proposal.

Mr. Glenn West, Executive Director, Minnesota Government Engineers Council (MGEC), testified in support of the bill on behalf of engineers and land surveyors, and expressed his disagreement with staff comments about the appropriateness of plan administrators or administrative boards proposing benefit increases.

Mr. Jay Stoffel, Executive Secretary, DTRFA, testified in support of the bill and distributed information about the prorated cost of living adjustment.

Mr. Chris Cowen, Political Action Director, AFSCME, testified that due to the current state employee strike they do not currently have an official response to the bills, but he indicated that these are issues that affect their members and they look forward to working with the Commission in the future.

The meeting adjourned at 11:15 a.m.