LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT

Representative Steve Smith, Chair of the Legislative Commission on Pensions and Retirement, called the meeting to order at 9:15 a.m.

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

Senators Don Betzold, Geoff Michel, and Lawrence Pogemiller

Representative Mary Murphy, Senator Keith Langseth, and Senator Cal Larson

Mr. Edward Burek, Deputy Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo and background information on the topic under consideration.

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo and background information on the topic under consideration.

Mr. Paul Larson, Deputy Commissioner, Department of Employee Relations (DOER), provided background information and updated members regarding DOER’s role in assisting the Department of Correction and the Department of Administration. Mr. Larson noted that one area of concern has to do with providing health insurance to Correctional Plan retirees. In 1983, the cost of providing family health coverage was $140 per month – that cost is now $1,000 per month. In order to receive the employer-paid retiree heath insurance coverage, a retiree must be eligible to receive an annuity. In 1983, there was a 10-year vesting requirement. Legislative changes since that time have reduced the vesting requirement to three years. Mr. Larson said that they are attempting to address this problem at the bargaining table and are not requesting legislative action at this time.

Rep. Lipman moved approval of the March 31, April 2, April 3, and April 4, 2003, meeting minutes. MOTION PREVAILED.

Rep. Krinkie moved Resolution 03-1. MOTION PREVAILED.

Mr. David Bergstrom, Executive Director, MSRS, testified that the MSRS board approved an experience study for the Correctional plan. Mr. Bergstrom said that an experience study has never been done for this plan, and that the cost would be approximately $25,000 – $30,000.

Rep. Erickson moved Commission approval of the experience study for MSRS-Correctional.

Mr. Martin reviewed the issues raised by the subject, noting staff’s concern that experience studies for correctional plans are being performed in a piecemeal fashion. Mr. Martin suggested that MSRS and the Commission consider the advantage of doing a concurrent experience study for the State Patrol Plan.

Mr. Bergstrom informed members that the reasoning behind scheduling an experience study for the State Patrol Plan next year rather than at this time was simply a budgetary concern, but that he would bring the suggestion to the MSRS Board.

Rep. Erickson amended her motion to include approval of an experience study for the State Patrol Plan.

Mr. Bergstrom said that the cost for the State Patrol Plan experience study would be in the $20,000 range, that the cost would be borne by the State Patrol Plan, and that the plan has sufficient assets to cover the cost of the study if approved by the MSRS Board.

Rep. Erickson renewed her motion to approve experience studies for the MSRS-Correctional Plan and the State Patrol Plan. MOTION PREVAILED.

Referring back to the PERA-P&F actuarial assumption changes passed earlier in the meeting, Sen. Pogemiller requested testimony from PERA regarding Milliman’s revisions to the assumption changes recommended by PERA’s actuary.

Ms. Mary Vanek, Executive Director, PERA, testified that the changes suggested by Mr. Custis, Milliman USA, were simply minor modifications, were not substantial, and were readily agreed to by PERA’s actuary, Mercer Human Resources Consulting.

Mr. Martin reviewed the staff memo and background information regarding the fire state aid program.

Rep. Lipman asked if the consideration of this subject could be construed to be maneuvering toward the potential consolidation of volunteer fire plans. Mr. Martin replied that there is intent to do so, and that the purpose of this topic is to review the disparity in the current state aid program, since the program has not been reviewed by the Commission since 1969.

The meeting adjourned at 11:00 a.m.