The new Pension Bill H3100.S3162DE1 has some good things in it for the PERA Correctional Plan. For a long time we have spoken to PERA Executive Director Doug Anderson about a weak spot in our plan. In it if the funding for our plan dropped below 85% for 2 years, or 80% for 1 year our COLA would be cut from a max of 2.5% to 1.5%. There was not a mechanism for it to rise back to 2.5% if the funding increased. He said he was for that and it needed to get done. This new Bill fixes that! Changes in section 3 fix that so if after being lowered the funding goes back up on that January 1st the COLA goes back to 2.5%. But wait there's more!  You may recall in Governor Walz proposed Budget there was something for every PERA Pension except the PERA Correctional Plan. Now the One Time State-Aid Appropriation; Pension Plans includes this:                        " local government correctional service retirement plan $5,255,535"...

 This is the bill MNCORA testified against.

The Star Tribune ran an article written by reporter Randy Furst who attended the March 20th LCPR meeting at the Minnesota State Capitol. The article outlines extremely well the costs of Police PTSD on the PERA Police and Fire  retirement fund. The article quotes PERA Executive Director Doug Anderson,  "We are estimating that the police and fire pension plan is costing $40 million more per year than we previously expected," .... "If there is no change in that trend, it accelerates the decline in the funding status." Unless disability pension applications by law enforcement officers and firefighters drop dramatically, cities and counties — as well as current public safety workers — will need to ratchet up their pension contributions, Anderson said." MNCORA recognizes the Police and Fire fund is in trouble. However the PERA Correctional Plan IS NOT! Here's the numbers from the  LCPR (MN Public Pension Plan Statistics as of 6-30-2021.docx) . Police and Fire ...

 This is testimony by MNCORA President Wade Laszlo opposing the inclusion of PERA Correction members in HF 1234.

We reached out to PERA and asked who the stakeholders were that were meeting about HF 1234 and when did they last meet. The answer was: "The members of the group consisted of MPPOA , MPFF , LELS , Teamsters , Highway Patrol, MPCA, MFCA, AMC , MICA , and LMC , Coalition of Greater MN Cities .  MSRS was also present.   I think that’s everyone, but there were sometimes more people on the call that I didn’t know.   Rep. Her , Sen. Frentz , Sen. Howe , Sen. Dibble all participated at various times."   The last meeting was Saturday, March 18 th .  MCORA objects to PERA Corrections Plan members being added to a bill that is described as "  Peace officer and firefighter duty disability provisions modified, report required, and money appropriated."

In the previous post we quoted from the letter of support of HF 1234 from the Association of Minnesota Counties.  "For over two years, AMC had the privilege of being part of a Public Safety Duty Disability Stakeholder Group. This group has been composed of a multitude of local government employers as well as law enforcement and union representatives." I asked the League of Minnesota Cities, who I heard headed up the stakeholders group and received the following list. The League of Minnesota Cities convened the meetings. Here are the groups that were represented: Association of Minnesota Counties Coalition of Greater Minnesota Cities Law Enforcement Labor Services League of Minnesota Cities Minnesota Chiefs of Police Association Minnesota Department of Public Safety Minnesota Inter County Association Minnesota Police and Peace Officers Association Minnesota Professional Firefighters Association Minnesota Sheriffs’ Association Minnesota State Fire Chiefs Association Minneso...

On March 20th I testified at the  Pension Committee meeting regarding House File 1234. MNCORA is opposed to this Bill.  See previous post  https://mncoretirementassociation.blogspot.com/2023/03/lcpr-meeting-monday-mar-20th-pension.html Testifying in favor of the Bill were Doug Anderson, Executive Director, Public Employees Retirement Association Amy Strenge, Policy Coordinator, Public Employees Retirement Association Jenny Max, Nisswa City Administrator, on behalf of the league of Minnesota Cities - LMC Letter Not testifying in person , but submitting a letter of support was the Association of Minnesota Counties (more on this later)  and John Swenson, Lino Lakes Public Safety Director, on behalf of Minn. Chiefs of Police Assoc. MNCORA sent two letters opposing this bill and 17 other affected people sent letters describing the hardships they face and how this bill if passed, would harm them. The room was so full of people mostly opposed that two more rows of chairs...

On Monday the Legislative Commission on Pensions and Retirement is meeting on HF 1234 . Billed as a Police and Fire Bill it's much more in a negative way for PERA Corrections.  MNCORA is submitting written testimony for that meeting as well as trying to get on the list of Testifiers.  HF 1234 says its a Bill "modifying Peace Officer and Firefighter duty disability provisions." Unfortunately it dramatically changes the way PERA Correctional Plan members are treated. If enacted as written HF 1234 will: Change 353.053 changing the burden of proof on a disability appeal form PERA to the member. Besides this radical change in decades old case law there are several other points of contention. The Bill makes changes to PERA Correctional disability affective immediately. MNCORA's fear is members out on disability prior to 2015 risk losing their benefits.  353.06 sub 5  was changed in 2015.  (a)   The disability benefit paid to a disabled local government correction...

 MNCORA President Wade Laszlo's video update as of March 11, 2023

In communications with PERA Executive Director Doug Anderson we asked if there was a way for a member with a medically determined Permanent Lifetime Duty Disability to not have to submit to reapplication.  This was PERA Executive Director Doug Anderson's answer,   "The disability statute does not currently provide a procedure for waiving the reapplication process, but PERA does waive reapplication in cases where the member’s physician does not anticipate improvement, the medical records support that there will be no improvement, and our medical consultant recommends a waiver.  In the proposed amendment, the waiver process is added to the statute so it would be clear that PERA may grant a waiver if our medical advisor states in writing that no improvement can be expected in the person’s disabling condition." This is good news to  PERA Correctional members with permanent disabilities.  Thank you Doug Anderson for providing this mechanism.

 This is Governor Walz , Governor's budget for public pensions . "Recommendation :  The Governor recommends transferring $78.12 million in general fund resources to Minnesota State Retirement System (MSRS), Teacher’s Retirement Association (TRA), Public Employees Retirement Association (PERA), and St. Paul Teachers Retirement Fund Association (SPTRFA) to fund a one-time non-compounded cost of living adjustment (COLA) increase for retirees in those plans. Rationale/Background:  Recommended funding is intended to respond to inflationary pressures and provide necessary one-time increases so all MSRS, TRA, PERA, and SPTRFA retirees receive a 2.5% COLA adjustment in calendar year 2024. Under this proposal, approximately 255,000 retirees will see an increased retirement payment in 2024." (Emphasis mine). The reasoning is "intended to respond to inflationary pressures." Inflation is running at 6%, the PERA Correctional Plans  cost of living adjustment (COLA) is 2.5%. ...

The PERA Board held a Special meeting on March 2nd.  There were two main items.  Duty Disability Provisions -which supports   SF 1959/HF 1234 "The bill also requires members who apply for a duty disability benefit based on a psychological condition to complete twenty-four weeks of treatment before a final determination for a duty disability can be granted."   And what was labeled  PERA Police & Fire Disability Modifications on the Agenda. At the end of page 5 PERA recommends a change that will affect ALL PERA pensions including the PERA Correctional Plan. It reads, " Staff Recommendation for Disability Reapplication The PERA staff recommends modifying Minn. Stat. §353.031, subd. 8 to set clear expectations for all of PERA’s members and clarify requirements. The recommended changes will clearly state that the member is responsible to reapply for the disability benefit once a year for the first five years and once every three years after that. Lang...