Part 1 will explore how the current threat to the PERA Correctional Plan began.
Who? What?
On March 1st 2021 Minnesota State Senator Bigham introduced SF 2198 described as
"911 telecommunicators transfer from the general employees retirement plan to the local government correctional plan; transferring eligible service credit"
This was quickly co-authored by Senators Housley and Pappas and joined by a companion bill in the House HF 2585 authored by Representative Berg.
When the PERA Correctional Plan was formed in 1999 the initial Correctional Officers did not transfer any service credit from their previous PERA pension and initially had to wait 3 years to be vested!
SF 2198 and HF 2585 did not proceed as written, but on May 3rd 2021 Senator Bigham introduced SF 2485. The Bill description is, "911 telecommunicator pension benefits working group establishment."
What is this working group studying?
Bill 2485 reads (click link for full language):
A bill for an act
relating to retirement; establishing a working group to consider changes to the
pension benefits for 911 telecommunicators; requiring a report.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
then jumping further down to Subd 2:
Subd. 2.
Duties; report.
The working group must submit a report to the Legislative
Commission on Pensions and Retirement by January 15, 2022. The report must recommend
whether changes to the pension plan coverage for 911 telecommunicators are appropriate.
If the working group finds that such changes are appropriate, the working group must
recommend changes to the pension plan coverage for 911 telecommunicators. The
recommended changes may include but are not limited to moving 911 telecommunicators
to the correctional plans.*
The Legislative Commission on Pensions and Retirement (LCPR) Wrote a summary you can read here- https://www.lcpr.leg.mn/documents/mtgmaterials/2021/S2485.Summary.911.Telecommunicators.pdf
Under Analysis the LCPR Summary says:
The proposed working group would have the expertise and resources to address the many issues and complications involved in moving a group of public employees from one benefit structure to another, including:
• Whether 911 telecommunicators should have enhanced pension benefits, and why;
• Whether transferring pension coverage for 911 telecommunicators to the PERA Correctional Plan, as set forth in SF 2198 (Bigham) / HF 2585 (Berg), is the best approach to providing enhanced pension benefits or if a different approach makes more sense;
• How to address pension coverage for 911 telecommunicators who are state employees as opposed to those employed by local governments;
• Whether past service should be eligible for enhanced pension benefits or only future service; and
• What would be the costs to employers, 911 telecommunicators, and affected plans of the alternatives for providing enhanced benefits.
Let's look at this point by point.
Point 1: Whether 911 telecommunicators should have enhanced pension benefits, and why;
MNCORA has no position on this, our concern is Correctional Officer Pensions
Point 2: Whether transferring pension coverage for 911 telecommunicators to the PERA Correctional Plan, as set forth in SF 2198 (Bigham) / HF 2585 (Berg), is the best approach to providing enhanced pension benefits or if a different approach makes more sense;
MNCORA opposes this. MNCORA's position is stated in the current PERA Correctional Plan:
"The Correctional Plan was established in 1999 for correctional officers serving in county and regional adult and juvenile correctional facilities due to the physical nature of their jobs. The members of this plan are responsible for the security, custody and control of the facilities and their inmates."
(Emphasis mine)
911 Telecommunicators do not share the same physical nature of the job and are not responsible for security, custody and control of the facilities and their inmates! They simply don't fit the description or meet the requirements.
Point 3: How to address pension coverage for 911 telecommunicators who are state employees as opposed to those employed by local governments;
Not a MNCORA concern unless they seek to enter them into the State MSRS Correctional plan, then our position is the same as adding them to the PERA Correctional Plan. The State MSRS plan is based on 75% inmate contact.
Point 4: Whether past service should be eligible for enhanced pension benefits or only future service;
MNCORA strongly opposes this. This would give 911 Telecommunicators a benefit that was not given to the Correctional Officers moved to the PERA Correctional Plan in 1999. They left all of their service credit in their previous pension and had to wait 3 years before they were vested. Furthermore a newly hired CO isn't vested until 5 years at 50% and not fully until 10 years!
An even bigger problem is that a long time 911 Telecommunicator newly transferred into the PERA Correctional Plan with years of service credit could immediately retire and draw from the Correctional Plan they NEVER paid into! What kind of financial damage could this cause to a plan CO's paid into for years?
Point 5: What would be the costs to employers, 911 telecommunicators, and affected plans of the alternatives for providing enhanced benefits.
This is the $6 million question. Or more accurately the $79 million question. At the September 10, 2021 meeting PERA Executive Director Doug Anderson ran an estimate of the cost of adding 911 Dispatchers to the PERA Correctional Plan. He said his numbers came out to $79 million and could possibly be has high as $90 million! An Actuarial study would have to be done to get an accurate number. The legislature DID NOT provide money for an Actuarial Study!
It is therefore impossible for this Working Group to ascertain the costs to employers or the affected plans! An Actuarial study must be done!
Next installment-How the threat began-deep dive: Part 2
Who are the players! Who are the work study group committee members!