LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

Senator Dean E. Johnson, Chair of the Legislative Commission on Pensions and Retirement, called the meeting to order at 6:07 p.m.

Representatives Philip Krinkie, Ann Lenczewski, Harry Mares, Mary Murphy, and Steve Smith
Senators Don Betzold, Dean Johnson, Lawrence Pogemiller, and Dan Stevens

Senator Roy Terwilliger

Mr. Jack L’Heureux and Mr. Randy Ulseth, Kanabec Hospital, and Mr. Dave Ulstrom, Kanabec County Commissioner, testified in support of the bill.

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

Ms. Mary Vanek, Executive Director, PERA, testified that actuarial work must be completed and it must be verified that the fund is not harmed before anything can move forward. Ms. Vanek said that PERA is not opposed to the bill.

Sen. Stevens moved S.F. 2555/H.F. 2782 be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the staff summary of the bill, and discussed potential clarifying amendment LCPR02-047.

Mr. David Bergstrom, Executive Director, MSRS, testified in support of the bill and that they are not opposed to the amendment.

Rep. Mares moved LCPR02-047. MOTION PREVAILED.

Rep. Mares moved S.F. 2984/H.F. 3127, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Ms. Sandra Neren, representing the American Financial Group, testified that they met with Mr. Martin and worked out language, and that their agreement is embodied in Amendment LCPR02-046.

Mr. Martin reviewed the bill and the proposed amendment.

Dr. Charles Kyte, Executive Director, Minnesota Association of School Administrators, testified in support of the bill and the amendment.

Sen. Johnson moved LCPR02-046. MOTION PREVAILED.

Sen. Johnson moved S.F. 2566/H.F. 2786, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Rep. Kahn presented her bill and expressed her preference for Amendment LCPR02-039.

Mr. Burek reviewed the staff memo and policy issues raised by the bill, and discussed potential amendments.

Mr. Jeff Spartz, Hospital Administrator, Hennepin County Medical Center, testified in support of the bill and explained why the Medical Center is in need of this legislation.

Sen. Betzold ask for an estimate for how many employees on work permits or visas might qualify.

Mr. Paul Cegla, Hennepin County Benefits Manager, testified that they did not have that information and they would have to go through the individual records file by file. Mr. Cegla said that they believe PERA would benefit financially from this legislation and that he would be comfortable with including the county as a whole and not just the Medical Center.

Ms. Mary Vanek, Executive Director, PERA, testified that she discussed the issue with representatives from Hennepin County, and that she agrees with Mr. Cegla’s assessment that those individuals whose visas are not extended would result in a gain to the fund. She also noted that PERA is able to make payments out of the country so those individuals who qualify for benefits would receive them. Ms. Vanek said that she would prefer to limit the bill to Hennepin County at this time.

Rep. Kahn suggested the following verbal amendment to LCPR02-040: on page 3, lines 35 and 36, delete "employed at medical facilities operated by that county".

Sen. Pogemiller moved LCPR02-040, incorporating Rep. Kahn’s verbal amendment. MOTION PREVAILED.

Sen. Pogemiller moved S.F. 2322/H.F. 2458, as amended, for inclusion in the omnibus pension bill.

Sen. Johnson asked Ms. Vanek for the advantages and disadvantages of making this apply statewide as opposed to just Hennepin County. Ms. Vanek said that PERA hired an individual on a visa when they were trying to get their computer system ready for Y2K when there was a shortage of qualified individuals, and that PERA would have liked to have covered that individual.

Mr. Curt Yoakum, Association of Minnesota Counties, testified in response to a request from Rep. Murphy, that to the best of his knowledge AMC has not addressed this issue, but that he could bring it up at their next meeting.

Sen. Pogemiller renewed his motion that S.F. 2322/H.F. 2458, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Sen. Johnson asked Mr. Yoakum to get back to Commission staff after the AMC has visited this issue.

Mr. Martin reviewed the staff memo and policy issues raised by the proposed recodification, which was an interim project of the Commission staff.

Rep. Smith moved S.F. 2790/H.F. 3161 be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Mr. Martin reviewed the staff memo and policy issues raised by the proposed recodification, which was an interim project of the Commission staff, and discussed technical amendment LCPR02-042.

Rep. Mares moved LCPR02-042. MOTION PREVAILED.

Rep. Mares moved S.F. 2791/H.F. 3272, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Sen. Pappas presented her bill (in the form of the LCPR02-038) and explained the history of the situation behind the legislation. Sen. Pappas pointed out that the Department of Public Safety did grant Mr. Redding his insurance benefits as a disabled firefighter.

Ms. Mary Vanek, Executive Director, PERA, testified that Mr. Redding did appeal his case before the board of trustees, but that the board was limited in its action because the law specifically states under 353.29, subdivision 7, that an annuity once granted cannot be revoked. Ms. Vanek said that because they were efficient in delivering Mr. Redding’s payment within a week after his retirement date and Mr. Redding did not have an opportunity to contact PERA to inform them of the change in his circumstances, their hands were tied. Ms. Vanek said that they do have concerns about precedent. She did note that teacher have a window of opportunity provision that allows members to change their option selection within 60 days while PERA does not.

Mr. Bill Redding testified in support of the bill, noting that if he had received a paper check beginning his retirement annuity he would not have cashed it, but because he had direct deposit he was unable to stop the payment.

Mr. Gary Austin, Executive Director, TRA, testified that TRA has a provision that within 60 days following the issuing of the first payment, members can cancel their whole retirement or change their options. Mr. Austin said that he could not recall a similar situation regarding disability.

Sen. Johnson asked Ms. Vanek to ask the PERA board discuss the issue at their Thursday meeting and get back to the Commission. If the board is in support of the legislation, it would be possible to offer an amendment in the Governmental Operations Committee.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo concerning the proposed assumption changes and the amendment and the resolution.

Sen. Johnson moved LCPR02-003. MOTION PREVAILED.

Sen. Johnson moved Resolution 02-1. MOTION PREVAILED.

Ms. Karen Kilberg, Executive Director, MTRFA, testified that the board was in support of the recommendation of the fund actuary, Mr. Mark Meyer, and that they believe there is a time period anomaly and they are not in favor of making the assumption change at this time.

Mr. Martin referred members to pages 3 and 4 of LCPR02-003 and explained the differences in the rate for TRA and the various first class city funds.

Sen. Hottinger presented his bill, and told members that TRA, MnSCU, and Education Minnesota all support the extension.

Mr. Burek reviewed the staff memo and policy issues raised by the bill, and discussed the amendments.

Mr. Russ Stanton, representing the faculties at the state universities and community colleges, testified in support of the bill. Mr. Stanton distributed a letter from Milliman USA stating that the method of calculating the cost of the buyback is reasonable and appropriate. They are supportive of LCPR02-052.

Rep. Mares moved LCPR02-053. MOTION PREVAILED.

Rep. Mares moved S.F.3040/H.F. 3294, in the form of LCPR02-052, as amended, to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Sen. Pogemiller and Rep. Mares presented their bill, and noted employer and employee support.

Sen. Pogemiller moved S.F. 2852/H.F. 2996 be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Mr. Martin reviewed the staff memo and policy issues raised by the proposed recodification, and distributed a handwritten technical amendment.

Rep. Mares moved the handwritten amendment. MOTION PREVAILED.

Rep. Mares moved S.F. 2789/H.F. 3160, as amended, be recommended to pass and be included in the omnibus pension bill.

Mr. Martin noted that they may need to capture some of the language from the Minneapolis Fire bill that would be repealed with this recodification.

Mr. Brian Rice, representing the Minneapolis Fire Relief Association, testified that there is some language they would like to see captured in the MFRA law. He said that he would get his opinion and analysis and a draft to Mr. Martin for the Commission’s future consideration.

Rep. Mares renewed his motion that S.F. 2789/H.F. 3160, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Ms. Mary Vanek, Executive Director, PERA, deferred to Mr. Burek for a discussion of the amendments.

Mr. Burek reviewed amendment LCPR02-048, which is some cleanup language to close an open-ended issue in one of the leave of absence provisions and to clean up the military service credit provision in PERA law to avoid a windfall for many members in the Police and Fire Fund.

Sen. Johnson moved LCPR02-048. MOTION PREVAILED.

Ms. Vanek summarized LCPR02-051, which includes language to direct PERA on how to use the appropriation in the 2001 claims bill for Ms. Debra Montgomery and would eliminate a potential windfall by directing PERA to return to the General Fund any money not needed to cover the cost when Ms. Montgomery actually retires.

Mr. Burek provided further clarification of the Amendment.

Rep. Murphy moved LCPR02-051. MOTION PREVAILED.

Ms. Vanek explained LCPR02-050, which proposes age-specific (age 23) exclusion and allows individuals who are receiving temporary workers’ compensation benefits to make contributions on the difference between the salary they are receiving and the full value of their salary they would otherwise be receiving in order to maintain their high-five salary for benefit purposes. Ms. Vanek noted that if they are on an unpaid leave of absence they can make that payment and that there is no cost to the fund.

Mr. Lowell Thompson, Hennepin County Association of Paramedics, testified in support of LCPR02-050.

Rep. Murphy moved LCPR02-050. MOTION PREVAILED.

Mr. Martin reviewed the staff memo and policy issues raised by the bill.

Mr. Nyle Zikmund, Minnesota Area Relief Association Coalition and Spring Lake Park-Blaine-Moundsview Fire Chief, provided a handout and said that he has been working with the State Auditor and that she is in support of the bill with a slight modification to allow the chair be elected rather than requiring the State Auditor to be chair. Mr. Zikmund also suggested that on page 3, line 4, insert "not public" and to readjust the amount to $300,000 and appropriate $200,000 from this year’s aid and $100,000 from next year’s aid.

Rep. Murphy moved to amend 02-5878 as follows:
Page 2, line 1, delete everything after "force"
Page 2, delete line 2 and insert "shall be elected by its members"
Page 3, line 7, delete "$350,000" and insert "$300,000 with $200,000 payable October 2002 and
$100,000 payable October 2003"
Page 3, delete lines 10-13 and strike line 14 up to the word "is". MOTION PREVAILED.

Mr. Zikmund continued his presentation on the proposal.

Rep. Murphy moved S.F. ____/H.F. 3235, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

Sen. Pogemiller said that the Hennepin County Board met today and decided to recommend support for including the Hennepin County Medical Center Protection Officers in PERA-Local Correctional coverage.

Mr. Paul Cegla, Hennepin County Benefits Manager, testified that the Hennepin County Board Inter-Governmental Committee unanimously voted to support the efforts of the Hennepin County Medical Center protections officers and it will be on the consent calendar for the full Board next Tuesday.

Sen. Pogemiller moved to incorporate appropriate language to include the Hennepin County Medical Center Protection officers be included in PERA-Local Correctional Plan coverage in the omnibus pension bill and to set aside consideration for 911 dispatchers and probation officers.

Mr. Paul Kruze, Hennepin County Medical Center protection officer, testified that the HCMC protection officers’ injury rate for the past 2-3 years has been almost 100% and that violence has increased.

Sen. Pogemiller renewed his motion to incorporate appropriate language to include the Hennepin County Medical Center Protection officers be included in PERA-Local Correctional Plan coverage in the omnibus pension bill. MOTION PREVAILED.

Sen. Pogemiller explained his amendments, which would include the international union of operating engineers and the international union of plumbers and pipefitters in the exceptions to a prohibition on supplemental pension plans.

Sen. Pogemiller moved to amend MS141 as follows: on page 3, line 4, delete "$3,000" and insert $2,000". MOTION PREVAILED.

Sen. Pogemiller moved MS141, as amended, and LCPR02-030. MOTION PREVAILED.

Rep. Mares reviewed his bill and informed members that the bill is supported by the League of Minnesota Cities and by the volunteer firefighters.

Mr. Martin said that the timing question was added so it does not become a popularity issue.

Rep. Mares moved to amend LCPR02-043 as follows: page 2, line 36, after "association" delete "were amended prior" and page 3, delete the language up to "provide".

Mr. Tim Vadnais, White Bear Lake Fire Chief, testified in support of the bill.

Rep. Mares renewed his verbal amendment. MOTION PREVAILED.

Mr. Martin reviewed the bill and the policy issues.

Rep. Mares moved S.F. 24/H.F. 1839, in the form of LCPR02-043, as amended, be recommended to pass and be included in the omnibus pension bill. MOTION PREVAILED.

The meeting adjourned at 8:58 p.m.