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employment. In recent years, cities have <br />experienced an increase in the number of <br />such workers applying for unemployment <br />benefits. This increases costs to cities and <br />taxpayers in a way that may not have been <br />originally intended. <br />In the 2012 legislative session, a new law <br />was passed which prohibits employers from <br />entering into agreements with employees not <br />to contest or appeal payment of <br />unemployment benefits as part of a <br />settlement agreement at termination of <br />employment. Because most cities are <br />"reimbursement employers," the benefits <br />paid to the employee are at the direct <br />expense of the city. <br />Response: Public sector temporary or <br />seasonal employees should not be eligible <br />for re-employment benefits. In addition, <br />cities (as reimbursement employers) <br />should be allowed to enter into <br />agreements with employees not to <br />contest/appeal payment of unemployment <br />benefits as part of a settlement <br />agreement. <br />HR-8. Pension Benefits <br />Issue: Pension benefit plans have years of <br />service requirements and limitations and <br />exclusions that act to ensure that the fund's <br />administrators have the ability to predict, <br />contain, and control costs. This protects the <br />fund's ability to pay future benefits to its <br />participants. Legislative exceptions to these <br />exclusions and limitations can undermine <br />this ability. Cities should have the ability to <br />weigh-in on these decisions through city <br />council approval. <br />Response: The League of Minnesota <br />Cities opposes special legislation for <br />individual employee pension benefit <br />increases unless the legislation addresses <br />a clerical or administrative error or is <br />initiated and approved by the city council <br />of the impacted city. <br />HR-9. Employer Contributions to <br />Public Employee Pension Plans <br />Issue: In 2010, the Legislature and governor <br />enacted pension stabilization legislation to <br />address the funding deficiency in the PERA <br />General Plan and the PERA Police and Fire <br />Plan. In 2013, the Legislature passed <br />additional stabilization legislation for PERA <br />P&F. The League of Minnesota Cities <br />supported the modifications to the PERA <br />plans, which included increases in employer <br />contributions, due to the fact that the <br />employer contribution increases were paired <br />with other significant benefit savings <br />including benefit reductions from active <br />employees and retirees that helped place the <br />plans on a more stable financial footing. <br />While the base contribution rate for <br />employees and employers in the PERA <br />General Plan is equal, Minn. Stat. § 353.27, <br />subd. 3a requires employers to make an <br />additional 1 % contribution until the actuarial <br />value of the plan assets equal or exceed the <br />liabilities. Employees do not have a similar <br />obligation to help the General Plan reach <br />full funding. In 1998 the state began <br />making PERA aid payments to <br />municipalities to offset the cost of increased <br />employer contributions. While the PERA <br />aid payment rate is frozen at 1999 levels, the <br />additional employer contribution has <br />increased from .43% to 1.0%. <br />On January 1, 2015, the employer and <br />employee contribution rates will increase by <br />0.25% of salary by operation of the <br />automatic contribution adjustment <br />mechanism in Minn. Stat. § 353.27, subd. <br />3b. The increase was triggered because for <br />two consecutive years there was an annual <br />contribution deficiency in excess of 0.5% of <br />covered payroll. <br />League of Minnesota Cities <br />2015 City Policies Page 76 <br />