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 9:48 a.m.

Representatives Philip Krinkie, Harry Mares, Mary Murphy,

Senators Don Betzold, Dean Johnson, Lawrence Pogemiller, and Roy Terwilliger

Representatives Ann Lenczewski and Steve Smith

Senator Dan Stevens

Representative Murphy suggested that the Subcommittee remain in existence in order to evaluate what should go into the next Request for Proposals and to explore all aspects of the possibility of having an in-house actuary.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the normal process of executing the contract.

Mr. Edward Burek, Deputy Director, Legislative Commission on Pensions and Retirement, reviewed the summary of the retirement legislation that was passed during the 2002 Legislative Session.

Mr. Gary Austin, Executive Director, TRA, began the review of the study by referring members to the summary of the restructuring plan.

Mr. Eugene Waschbusch, Secretary/Treasurer, SPTRFA, provided background on the discussions that took place, noting that the fund directors met approximately thirteen times, and they also met with a task force consisting of members of the employer and employee groups. Mr. Waschbusch expressed thanks to all for their participation and advice. He noted that they reviewed previous studies, discussed what could be done to make those studies more relevant, and then developed a "best practices" model for the Legislature to consider adopting.

Mr. Phillip Kapler, who will become the Executive Director of the SPTRFA on July 1, reviewed the study conducted by the Department of Finance in 1993-1994.

Senator Johnson asked Mr. Kapler and the others if they were working toward having a draft bill for consideration by the Legislature in January. Mr. Waschbusch responded that they will continue to work on items yet to be addressed and that they do intend to have draft legislation prepared.

Mr. J. Michael Stoffel, Executive Secretary, DTRFA, reviewed the agreed-upon tenets which are summarized on page two of the summary.

Mr. Austin reviewed the recommended benefit structure for a restructured teacher retirement plan, which is found on page three of the summary.

Ms. Karen Kilberg, Executive Director, MTRFA, reviewed the recommended options for basic members of the Minneapolis and St. Paul teacher retirement funds.

Mr. Waschbusch reviewed the contributions, liabilities, and financing recommendations as outlined on page three of the summary.

A discussion of the funding problems of the Minneapolis and St. Paul teacher retirement funds ensued.

Representative Krinkie asked the fund administrator what the level of acceptance is within their respective fund’s pensioners as to moving forward with this plan.

Mr. Waschbusch replied that they have an in-house task force with the union, that they have been talking with people, and if this package were to be included with the benefit improvements, he believes they would support it almost 100 percent.

Ms. Kilberg said they also have worked with the union, and they feel the resistance would come from their basic members and that there would need to be a large education process for their coordinated members, but they believe if they have the time and have enough support that they would be able to make this work.

Mr. Stoffel said that while they haven’t presented this to their entire membership, the Board of Trustees and the union members are aware of the proposal and he believes that their members would be in favor of it. Their underlying concerns are no loss of benefits and they need to let their membership have a vote in the process.

Mr. Austin said that they have not polled their members, but that their Board is certainly is in favor of the proposed benefit structure. He also noted that any ultimate plan must have sound funding behind it so the funding deficiencies of the other plans should not fall solely on the shoulders of their membership.

This item was laid over until the next Commission meeting.

The meeting adjourned at 11:34 a.m.