Agenda - Council - 01/12/1982 - Laserfiche WebLink

Home

I I I I I I I I I I I I I I I I I I ly earmarked for the reduction of the actuarial deficit in the PERA Basic Plan. The employer's additional contributions should be abolished. 3. If any increase in benefits is enacted for PERA retirees, the resulting cost should not be paid from the PERA Fund, but rather should be financed by a direct appropriation from the State General Fund. 4. The actuarial assumptions concerning the rate of investment earnings and of salary increases should be a conservative reflection of actual ex- perience. The present assumptions concerning the rate of investment earnings and salary increases are outdated. We urge the legislature to examine these assumptions and to determine a means of more accurately reflecting the actual experience during recent years. 5. The League supports the continuation of the Minnesota Post Retirement Investment Fund as a means of providing post-retirement increases in the pension benefits of retirees under the state- wide pension funds. The League supports state funding of fund deficits from general funds or amortization of the deficits by crediting a reason- able portion of excess earnings over statutory assumptions to retire deficits and payment of the remainder of excess earnings to retirees as a cost of living adjustment without establishment of any guaranteed adjustment. (In the event the legis- lature determines that some mechanism other than the Post Retirement Investment Fund is more appropriate for providing retiree inflation protec- tion, or that the Post Retirement Investment Fund should provide a guaranteed inflation adjustment, the League urges the legislature to provide that: (a) no increases be made during the first three years after retirement or until the Consumer Price Index increases at least ten percent; (b) a specific limit be placed on the increase granted in any one year; and (c) the cost of such increases, including any resulting deficits, be financed from the state general fund. 6. Further steps should be taken to integrate the administration of the three statewide pension funds, without combining the funds. 7. The League recommends enactment of enab- ling legislation to allow the transfer of pension contributions and equal employer contributions plus accrued interest of individual employees, at their request, to and from other states with similar reciprocal legislation. $. The PERA Police and Fire Fund is well funded and rapidly approaching full funding. Furthermore, the taxpayers, through payment of the employers 60% of pension payments, already provide sufficient funding to amortize the deficit in that fund. Therefore, the legislature should amend the present provision on disbursement of the two percent tax on automobile casualty in- surance to allow expenditures by the recipient political subdivision of any excess over the em- ployer's share, of police retirement costs for any police department purpose instead of requiring payment to the PERA Police and Fire Fund. When the PERA Police and Fire Fund achieves full funding, employers' and employees' contribu- tions should be reduced to an amount sufficient to pay normal costs on an equal share basis. IV-3. Volunteer Firefighters Relief Associations (B) Through the some 735 municipal volunteer fire departments and more than 25 non-profit firefighting corporations, hundreds of cities throughout the state provide fire protection ser- vices to their citizens in a very economical manner. Most of these departments and non-profit corpora- tions provide their volunteer members with some type of pension as partial compensation for their community service. Traditionally, the type and level of pension benefits provided as well as the administration and investment of the pension fund has been handled locally in accordance with benefit limits and financial standards specified by law. Although this system has worked very well, the League proposes that there is need to provide cities more flexibility in the use of state-aid funds so that they may use state-aid funds for any fire department purpose after payment of funding obligations for pensions. Further, the legislature is urged to carefully monitor local funding since effective limits on benefits have now been. re- moved. · ,PO/- I F~r~fighter~Al~ouble Dipping (A) IV-4. volunteer '7~ I~ L~:~ Volunteer firefighters who are members of a local v~t/a,~ t'FF~l~gl~erJ ~ief~s~c~m~hould be ineligible for membership in the PERA police and fire fund until average monthly compensation for a consecutive six month period exceeds $800. Upon commencement of PERA coverage a fire- fighter should cease to be a member of the local relief association, at which point a proportionate distribution of local relief association assets to the firefighter over a period not to exceed five years, should be made to permit role-over into an inde- pendent retirement account. -17-