LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

Representative Steve Smith, Chair of the Legislative Commission on Pensions and Retirement, called the meeting to order at 7:40 p.m.

Representatives Sondra Erickson, Philip Krinkie, Eric Lipman, Mary Murphy, and Steve Smith

Senators Keith Langseth, Cal Larson, and Lawrence Pogemiller

Senators Don Betzold and Geoff Michel

Rep. Smith explained that the bills on the agenda would be considered for possible inclusion in the omnibus pension bill. The bills will be discussed and amendments considered, but the bills will be laid over by the Chair and final consideration and passage will occur at a future meeting.

Rep. Eastlund and Sen. Lourey presented and testified in favor of the bill.

Rep. Smith moved H.F. 308/S.F. 616 for consideration and possible inclusion in the omnibus pension bill.

Ms. Judith Johnson, Executive Director, Minneapolis Employees Retirement Fund (MERF), provided background information and testified that the MERF board does not have a position but is not opposed to the bill.

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

Rep. Smith moved amendment LCPR03-108.

Mr. Robert Johnson, representing Teamsters 320, explained that amendment LCPR03-108 is for PERA, an individual similarly situated to the individual affected by H.F. 308/S.F. 616.

Rep. Lipman asked Ms. Johnson about the precedent effect of allowing excluded employees an opportunity to purchase prior service. Ms. Johnson replied that this would be the third such instance, but due to the high cost the members generally do not make the purchase.

Ms. Mary Vanek, Executive Director, PERA, testified (in regard to amendment LCPR03-108) that PERA allows the purchase of prior service only where the individual meets the eligibility requirement. In this case, PERA would like to confirm through an amendment to the amendment that there be evidence that this temporary employment would not have been excluded had the individual been able to join PERA at the time.

Rep. Lipman moved the E1 amendment to amendment LCPR03-108. MOTION PREVAILED.

Rep. Smith renewed his motion on amendment LCPR03-108, as amended. MOTION PREVAILED.

Sen. Pogemiller moved that appropriate language mirroring the E1 amendment be added by staff to H.F. 308/S.F. 61. MOTION PREVAILED.

The bill was laid over.

Rep. Nelson presented and testified in favor of her bill.

Rep. Smith moved H.F. 247/S.F. 400 for consideration and possible inclusion in the omnibus pension bill.

Deputy Commissioner Michael Pugliese, Department of Veterans Affairs, testified in favor of the bill

Mr. David Bergstrom, Executive Director, MSRS, testified that both MSRS and PERA support this bill.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, noted that utilization of these various provisions has been relatively modest to date, briefly reviewed the policy issues raised by the bill, and reviewed amendments LCPR03-099, LCPR03-100 and LCPR03-101. Because of questions raised by staff regarding the accuracy of the methodology used to calculate the purchase cost of full actuarial value purchases, Mr. Martin recommended extending the sunset rather than make the program permanent.

Rep. Krinkie moved amendment LCPR03-099, inserting a date of 2004.

Sen. Senjem testified that he and Rep. Nelson were not opposed to the amendment.

Mr. Bergstrom clarified that the 2001 numbers show a loss due to another factor associated with the MTC. He also testified that he is not opposed to the extension.

On the Krinkie motion, MOTION PREVAILED.

The bill was laid over.

Sen. Pogemiller suggested similar treatment for H.F. 844/S.F. 667.

Sen. Pogemiller presented the bill, noting that this represents the same issue but a different set of funds and additional types of service.

Rep. Smith moved H.F. 844/S.F. 667 for consideration and possible inclusion in the omnibus pension bill.

Sen. Pogemiller moved amendment LCPR03-103. MOTION PREVAILED.

The bill was laid over.

Rep. Smith moved H.F. 349/S.F. 278 for consideration and possible inclusion in the omnibus pension bill.

Sen. Tomassoni presented and testified in favor of the bill and read a letter from a Vietnam veteran expressing support of the bill.

The bill was laid over.

Rep. Smith moved H.F. 911/S.F. 889 for consideration and possible inclusion in the omnibus pension bill.

Rep. Carlson presented and testified in favor of the bill.

Mr. Dean Larson, the person affected by the bill, testified in support of the bill, reviewed his situation, and responded to questions from members.

Mr. Burek reviewed the staff memo and policy issues raised by the bill, and explained amendments LCPR03-105 and LCPR03-106.

Ms. Linda Sandvig, Minneapolis Public Schools, testified that they were unable to determine any harm on the part of the school district during the years in question in preventing Mr. Larson from making contributions.

Rep. Lipman moved amendment LCPR03-106. MOTION PREVAILED.

The bill was laid over.

Rep. Smith moved H.F. 63/S.F. 47 for consideration and possible inclusion in the omnibus pension bill.

Rep. Boudreau presented and testified in favor of the bill.

Mr. Mark Miller, the person affected by the proposed legislation, testified in support of the bill and provided a letter from MSRS.

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

Mr. David Bergstrom, Executive Director, MSRS, testified that this was a period not generally covered by MSRS, that the situation is identical to the bills heard earlier, that the cost would be $21,203, and that if it is at full actuarial value, and that MSRS is not opposed to the bill as long as it requires full actuarial value payment.

The bill was laid over.

Rep. Smith moved H.F. 828/S.F. 811 for consideration and possible inclusion in the omnibus pension bill.

Rep. Paymar presented and testified in favor of the bill.

Mr. Martin reviewed the bill and amendment LCPR03-071.

Mr. Ken Johnson, President, and Ms. Laurie Hansen, Chief Financial Advisor, St. Paul Port Authority, testified in support of the bill and responded to questions from members.

Ms. Mary Vanek, Executive Director, PERA, testified that they have carefully studies this and have discussed with the employees the difference between PERA’s plan and the defined contribution plan. PERA did look at the normal cost of coverage for this particular group, and PERA’s actuary has determined that PERA’s current contributions do cover the normal cost of bringing this group into PERA and do not bring an unfunded liability to the plan for their future participation.

Rep. Krinkie moved amendment LCPR03-071. MOTION PREVAILED.

Rep. Krinkie requested that staff draft an amendment for future consideration that would allow all of these individuals to become part of the PERA Defined Contribution Plan on an optional basis.

The bill was laid over.

The meeting adjourned at 9:35 p.m.