[Mpls] Minneapolis pensions

[Mark Snyder]

On 1/3/05 4:30 PM, "Phyllis Kahn" <rep.phyllis.kahn at house.mn> wrote:

> The decision before the Mpls city council was did they want to save 16
> million next year, 40 million over the next 5 years (subtracting the
> cost of 10 million for the benefit increase), preserve 30 million in
> state financial commitments (which will be even more difficult to get
> this year) and reduce the need for bonding for pensions to 8 million
> instead of the 25 million they have authorized (against the
> recommendation of the Board of Estimate and Taxation, or at least
> without it).  The members I cited turned this down and MS agrees with
> them. He also appears to believe that it is punitive to remove an option
> to bond for pensions without a referendum, an option no other city in
> the state  (and possibly the country) has used. The 3 funds and the
> teachers fund have totally different problems and none are asking for
> benefit increases. (MERF specifically stated this).

Hang on a second. 

At the beginning of this paragraph, Rep. Kahn states that the plan she
favors for the police pensioners saves Minneapolis $40 million over five
years after subtracting the cost of $10 million for the benefit increase. At
the end of this paragraph, Rep. Kahn states that none of the three plans are
seeking benefit increases.

Would Rep. Kahn like to explain which of her statements is actually correct?

It's also worth noting from the 12/24/2004 article in the Star Tribune:

"Minneapolis leaders on Thursday narrowly rejected a pension proposal from
the police retirement fund, hoping for a better deal later.
The Minneapolis Police Relief Association went to the Legislature earlier
this year -- against the wishes of the city -- and pushed through a bill
giving themselves a benefit increase and agreeing to a 10-year extension of
the deadline to balance the fund's books, if the city agreed.
But the city had hoped to go to the Legislature with a plan for all three of
its closed retirement funds, which include the Minneapolis Employees
Retirement Fund and the Minneapolis Firefighters' Relief Association.
The city is trying to find a way to cover a combined $278 million shortfall
projected for the three funds. Mayor R.T. Rybak argued against approving the
police bill, saying the city wants a "universal solution" to the pension
problem.
The bill's benefit increases also raised concerns about the response of
retirees in the other funds. If they sought and received raises, that would
wipe out any short-term savings from the police bill.
The City Council rejected the plan on an 8-5 vote."

Link: http://www.startribune.com/stories/462/5153648.html

I also quote from an earlier post by Rep. Kahn dated 12/30/2004:

"As a further comment on Mpls. city council and  mayoral pension
thoughts, I have in front of me the Mpls 2005 Legislative agenda,
presented to us on December 10. (months after the blue ribbon task force
finished its work.) There is nothing about pensions until page 4 (out of
6) and then only the items for MERF that I had suggested years ago.
(They also ask to remove the salary cap for the MERF executive director.
I don't oppose this as I think she is terrific but it is odd in terms of
their adamant opposition to a minor benefit increase for retired
police.) So much for the well thought out pension strategy."

Link: http://www.mnforum.org/pipermail/mpls/2004-December/037588.html

Both the Star Tribune article and Rep. Kahn's own post from 12/30 appear to
suggest that the police pensioners (MPRA) at least are seeking a benefit
increase. 

If that's indeed correct, I personally find it difficult to believe that the
members of MERF or MFRA would simply sit idly by and let the members of MPRA
get a benefit increase without seeking one themselves. Especially since my
understanding from talking with my father, a MFRA member, the MPRA members
are responsible for a significant portion of their shortfall due to some
really, really horrid investment decisions by their plan leaders a number of
years ago, before the market downturn that took place over 2001-2003.

As for personal invective, I again quote from Rep. Kahn in a post dated
12/29/2004:

"Of the eight council members voting against the partial solution,
three are not running again and apparently have little interest in long
range solutions. The other five (Ostrow, Samuels, Schiff, Zimmerman and
Goodman) and Mayor Rybak need serious opponents who will take them on on
this issue.

Link: http://www.mnforum.org/pipermail/mpls/2004-December/037524.html

In the future, if Rep. Kahn is willing to refrain from personal invective
(which would probably include comments such as "spouting off"), I will be
happy to agree to do likewise.

Finally, while I agree with Rep. Kahn that bonding for pension obligations
is not an ideal solution, I hope that she is also willing to consider how
taking a tool away from Minneapolis City Council simply because she
disagrees with it can at least give the appearance of being a punitive
action. 

I would also hope that instead of devoting valuable time during this
Legislative session to taking such action, she would instead propose to work
proactively with Minneapolis City Council and use her influence in the state
Legislature to find a solution that does address all three pension plans in
a responsible manner.

Mark Snyder
Windom Park