Legislative Update - April 5, 2011 |
The following bills have been introduced impact and impact a MSRS retirement plan(s). |
HF 4/SF81- 15% Workforce Reduction including Early Retirement Incentive |
| This bill is now part of the both the Senate and House State Government Finance Omnibus bills. |
SF1047, Article 3, Section 35 |
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| HF577, Article 3, Section 47 |
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NOTE: Fiscal Note completed |
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| House Authors: |
Senate Authors: |
| Downey; Drazkowski; Anderson, B.; Scott; Zellers; Myhra; Leidiger; McDonald; Hancock; Murdock; Dettmer; Peppin; Gruenhagen |
Daley; Parry; Thompson; Lillie |
House Hearings: |
Senate Hearings: |
Government Operations (1/20)
State Government Finance (2/17)
Referred to Ways and Means |
State Government Innovation & Veterans (3/10)
Referred to Finance |
Summary: |
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| The bill requires a 15 percent workforce reduction among the Executive Branch agencies utilizing various options including attrition, furloughs, extending the early retirement incentive passed in 2010 and an early retirement incentive tied to service credit. The early retirement incentive adds an additional month of service credit for each full year of service earned. The additional cost to the retirement plan for the incentive is paid by the agency; there is no financial impact to the pension plan. The House version requires 80 percent of the reductions to happen in the first two years. |
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Salary and Wage Freeze |
SF1047, Article 3, Section 33 |
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| HF577, Article 3, Section 56 |
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Summary: |
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| The bill freezes salaries for existing state employees on July 1, 2011. The prohibition includes across-the-board increase, COLA adjustments; longevity increases, steps, lump sum payments, deferred compensation employer contributions and any other pay grade adjustments. Promotional increases are allowable. This has a mixed impact to the retirement plans; an actuarial gain because individual salary growth is less (smaller high-five), but overall payroll growth will not grow resulting in an actuarial loss. |
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HF110/SF163- Increasing membership of LCPR |
| Bill passed on 3/10 (vote 126-5) |
Included in HF577, Article 3, Section 1 |
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| Senate hearing scheduled 4/6/2011 |
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House Authors: |
Senate Authors: |
| Kahn; Smith; Nelson; Peppin; Murphy, M; Knuth |
Pappas; Rosen |
House Hearings: |
Senate Hearings: |
Government Operations and Elections (1/30)
State Government Finance (2/7)
Ways and Means (3/3) |
Referred to State Government Innovation and Veterans (none-to-date) |
Summary of current version: |
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| The bill adds two members from each body to the Legislative Commission on Pensions and Retirement (LCPR). |
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HF1072- Correctional Plan membership |
| This language was removed from the House Public Safety Omnibus bill. |
NOTE: Fiscal Note completed |
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| House Authors: |
Senate Authors: |
| Cornish |
N/A |
House Hearings: |
Senate Hearings: |
| Referred to Public Safety and Crime Prevention Policy and Finance (3/17/2011) |
N/A |
Summary: |
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| This bill changes the membership of the MSRS Correctional Employees Retirement Plan by limiting it to security personnel in the Department of Corrections and Human Services. All existing Non-security personnel are removed from the plan. The cost to move these classifications increased the ongoing cost for the remaining plan members by 4.0 percent of pay. |
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HF1256/SF813- State and public employee retirement plans member and employer contribution modification |
| Currently tabled in Senate Government Innovation and Veterans |
NOTE: Fiscal Note completed |
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| House Authors: |
Senate Authors: |
| Franson; Leidiger; Drazkowski |
Hoffman; Parry; Thompson; Chamberlain; Newman |
House Hearings: |
Senate Hearings: |
| Referred to Government Operations and Elections (none-to-date) |
Referred to Government Innovation and Veterans (3/21)- no action taken; was considered for inclusion in State Government Finance Omnibus |
Summary of current version: |
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| The original bill shifted 3 percent from the employer contribution to the employee; it was amended to be a 2 percent shift. The bill now reduces the employer contribution by 2 percent of payroll for all Minnesota public pension plans (excluding the State Patrol Plan) and increases the employee contribution by 2%. The contribution shift increases costs to the plans because of the lost turnover gain from refunds; now a larger portion of the contribution would be eligible for refund. The actuaries have estimated this cost of the original bill to the General Plan to be 0.5 percent of pay. |
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HF451/SF379 Tax conformity bill - includes Roth 457 conformity |
House Authors: |
Senate Authors: |
| Davids; Franson; Lohmer; Benson, M.; Westrom |
Ortman; Rest; Bakk; Senjem |
House Hearings: |
Senate Hearings: |
Taxes (3/3)
Referred to Ways and Means |
Referred to Taxes |
Summary of current version: |
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| This is a federal tax conformity bill; our interest is related to Roth 457 conformity to allow qualified distributions to exempt from Minnesota income taxes. |
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HF192- Reinventing Government Employment Act |
House Authors: |
Senate Authors: |
| Downey; Benson, M; Gruenhagen; Wardlow |
N/A |
House Hearings: |
Senate Hearings: |
Government Operations & Elections
Referred to State Government Finance |
N/A |
Summary of current version: |
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| The bill freezes salaries for existing state employees the day following enactment. The prohibition includes across-the-board increases, COLA adjustments; longevity increases, steps, lump sum payments, deferred compensation employer contributions, and increase in employer contribution towards medical, dental, life or other insurance. Promotional increases are allowable and increases for employer contributions to pensions if in law. The Commissioner of MMB must contract with an organization to complete a compensation study (due 3/1/2012) for all employees of the executive and legislative branch and compare each position description with an equivalent position in the private sector. It also includes provisions for employee gain sharing and value-added service. This has a mixed impact to the retirement plans; an actuarial gain because individual salary growth is less (smaller high-five), but overall payroll growth will slow, which means we will collect less to pay off the unfunded liability. |
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SF627- Modifies mandatory retirement age for Judges |
House Authors: |
Senate Authors: |
| N/A |
Newman |
House Hearings: |
Senate Hearings: |
| N/A |
Judiciary and Public Safety (none-to-date) |
Summary of current version: |
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| The bill changes the mandatory retirement age for Judges to allow them to finish their term and repeals the incumbency designation on the ballot. This is a slight actuarial gain to the Judges plan if they are able to retire later and work longer. |
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HF542- Eliminating DB pension coverage (does not prohibit employer DC contributions) |
HF594- Eliminating DB pension coverage |
House Authors: |
Senate Authors: |
| Buesgens |
N/A |
House Hearings: |
Senate Hearings: |
| Referred to Government Operations and Elections (none-to-date) |
N/A |
Summary of current version: |
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| Both bills stop employee contributions to the public pension plans in Minnesota effective July 1, 2011; no future service credit is earned. If someone is not vested, they may apply for a refund of employee contributions. The employer continues to contribute to the DB pension plans, but HF594 prohibits an employer contribution to a defined contribution plan also. |
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