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, Mary Murphy, and Steve Smith

Senators Don Betzold, Geoff Michel, and Lawrence Pogemiller

Representative Eric Lipman, Senators Keith Langseth and Cal Larson

Mr. Lawrence Martin, Executive Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo and the Subcommittee report (Document LCPR03-243). Mr. Martin referred members to technical amendment LCPR03-251 and six potential amendments extending various provisions to additional plans. Mr. Martin also referred members to LCPR03-250, an amendment containing three additional changes proposed by TRA.

Mr. David Bergstrom, Executive Director, MSRS, responded to a question from Rep. Erickson as to what extent grievance awards and covered salary have been a problem for MSRS, stating that there have been 2-3 per year that are questionable and that MSRS is being proactive on this issue.

The item was laid over until a quorum was present.

Mr. Edward Burek, Deputy Director, Legislative Commission on Pensions and Retirement, reviewed the staff memo and potential courses of action for Commission consideration.

Ms. Cheryl Furrer, representing Education Minnesota, testified in strong support of retaining the current service credit provisions, requesting that the Commission to make the provisions permanent.

Mr. Gary Austin, Executive Director, TRA, provided handout materials and testified in support of retaining the current provisions. Mr. Austin referred members to page 2 of the handout, addressing Rep. Erickson’s question from the previous Commission meeting regarding TRA’s service credit purchase experience and an analysis of the cost of the purchases.

Chair Smith indicated that discussion on this topic would be continued at a future meeting.

Sen. Betzold moved approval of the October 7, 2003, Commission meeting minutes and the October 14, 2003, Subcommittee meeting minutes. MOTION PREVAILED.

Sen. Betzold moved technical amendment LCPR03-251. MOTION PREVAILED.

Sen. Betzold moved LCPR03-244. MOTION PREVAILED.

Sen. Betzold moved LCPR03-245. MOTION PREVAILED.

Sen. Betzold moved LCPR03-246. MOTION PREVAILED.

Sen. Betzold moved LCPR03-247. MOTION PREVAILED.

Sen. Betzold moved LCPR03-248. MOTION PREVAILED.

Sen. Betzold moved LCPR03-249. MOTION FAILED.

Sen. Betzold moved LCPR03-250. MOTION PREVAILED.

Mr. Martin indicated that Commission members could act on the Subcommittee Report, as amended, at this time or members could choose to wait until the Legislative Session. Final action was laid over.

Mr. Martin reviewed the third consideration memo and referred members to their packets for requested responses from the Department of Corrections, the Department of Human Services, the Minnesota State Retirement System, and the Department of Employee Relations.

Mr. David Bergstrom, Executive Director, MSRS, and Mr. Terry Anderson, Department of Human Services, testified regarding their joint response, referring members to the letter in their packets. Mr. Bergstrom indicated that staff from MSRS, the Dept. of Human Services and the Dept. of Corrections got together to review Mr. Martin’s memo and to draft a response. Mr. Bergstrom then reviewed the response and the joint recommendations.

Mr. Bergstrom also recommended a different procedure for future studies, encouraging better communication from Commission staff. Mr. Bergstrom expressed his concern that the Commission staff memo appears to question the competency of the MSRS staff and the quality of its work, and that more cooperation would be appreciated.

Chair Smith thanked Mr. Bergstrom for his comments and responded that the most important function of an elected official is that of oversight, and the only way to have any assistance from staff in fulfilling that obligation is for questions to be raised at even the slightest hint of impropriety. Chair Smith indicated his complete satisfaction with the function and adequacy of the Commission staff.

Rep. Krinkie asked Mr. Bergstrom why he did not respond earlier to Mr. Martin’s memo. Mr. Bergstrom said that they originally provided the information several months ago and he felt compelled to have to respond to Mr. Martin’s memo in person before the Commission, which is why he delayed response. Mr. Bergstrom stated that he needed to clarify that there was only one position that was improperly reported, and that he also felt the need to justify that his staff works very hard, spending 80-100 hours on this issue, and that they are doing things properly and in accordance with the law.

Mr. Anderson, Dept. of Human Services, testified regarding the inclusion of a number of classifications at the Psychopathic Personality Facility at Moose Lake. He said that he has looked at those classifications against the criteria and has summarized his findings, which he will provide to Commission staff. Mr. Anderson said that his agency believes that Section 352.91 should refer to the Minnesota Sex Offender Program rather than its two specific locations.

Sen. Pogemiller expressed his concern that a confrontational atmosphere between staff and fund administrators has developed, on all sides. Sen. Pogemiller stated that it is incumbent on all parties to work toward more cordial working relationships in order to better serve the Commission.

Rep. Erickson said that while Commission members do encourage good working relationships, they also need staff to inform them of anything raising a red flag. She pointed out that because the confusion regarding this issue has been clarified, members will be able to make appropriate changes in law.

Mr. Martin referred members to an October 31, 2003, memorandum relating to the actuarial services contract with Milliman USA. He reminded members that the current contract is for two years with a possible two-year extension, and that the two-year extension depends upon resolving three issues raised by Milliman that are outlined in the staff memo. Mr. Martin indicated that the Commission will need to address and resolve this contract issue early in the Legislative Session.

Chair Smith asked Commission members to review the language proposed by Milliman USA in preparation for a future meeting on this issue.

The meeting adjourned at 12:05 p.m.