Pension Commission Considers Bill to Expand Correctional Plan

The proposal would add more employees to the Public Employees Retirement Association Correctional Plan.
(Published Nov 12, 2013)

The Legislative Commission on Pensions and Retirement (LCPR), a 14-member panel made up of House and Senate members, met over a two-day period beginning Nov. 6 to discuss topics that may be considered by the Legislature in 2014. Among the topics was a bill introduced in the last session that would place 911 dispatchers, probation officers, and Hennepin County security guards in the Public Employees Retirement Association (PERA) Correctional Plan.

These employees are currently in the PERA Coordinated Plan, which is made up primarily of local government employees other than police officers and firefighters. The bill, HF 884 (Rep. Mike Nelson, DFL-Brooklyn Park)/SF 998 (Sen. Jeff Hayden, DFL-Minneapolis), was laid over for further consideration.

If enacted, the bill would change the normal age of retirement for this group of employees from 65 to 55. It would also reduce the employee contribution rate from 6.25 percent to 5.83 percent of salary, while increasing the employer contribution rate from 7.25 percent to 8.75 percent of salary.

Traditionally, membership in the Correctional Plan or the PERA Police and Fire Plan (PERA P&F) is limited to individuals with jobs that expose them to increased risk of physical injury and death. The employee groups advocating for the bill testified that work-related stress and exposure to hazards justifies moving this group of employees into the PERA Correctional Plan.

Employer representatives, including the League, testified against the bill, saying it would set precedent for more employee groups to seek more lucrative benefits, and would exacerbate pension-related budget pressures that have already been made worse by 2010 legislation aimed at stabilizing the PERA Coordinated Plan, and 2013 legislation that was passed to shore up the PERA P&F.

Members of the LCPR did not express obvious support for or opposition to the measure. Some members indicated they thought this might be more of a workplace issue than a retirement issue, and suggested employers should provide more resources to employees experiencing job-related stress.

The bill has not been scheduled for another hearing, but may come up for further discussion as the 2014 legislative session approaches.

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