The $13.9 million program, which provides aid to cities and other non-school PERA employers, ended on June 30, 2020, due to a statutory sunset.
The Legislative Commission on Pensions and Retirement considered a bill on March 4 that would extend the Public Employees Retirement Association (PERA) Employer Aid program, which ended last year.
The bill, HF 1678, is authored by Rep. Cheryl Youakim (DFL-Hopkins). The Pension Commission voted 13-0 to recommend that the restoration of the program be included in the pending omnibus pension bill.
The Senate companion bill, which will be authored by Sen. Julie Rosen (R-Fairmont), is expected to be introduced soon.
History of the aid program
The PERA Employer Aid program was originally created in 1997 to offset a required employer pension contribution increase on behalf of employees in the PERA General Plan. The aid is paid to all non-school PERA employers, including cities.
The cost of the program was set in 1997 at a maximum of $15.9 million per year. Since that time, the cost of the program has been reduced to $13.9 million, due to reductions in payroll for eligible entities and governmental reorganizations.
When the program was established, the Legislature placed a sunset in the statute that coincided with the projected full funding date for the PERA General Plan of June 30, 2020. The last payments distributed to the 1,400 local government employers across the state occurred last July and December.
Under the bill, the program would be extended to the earlier of June 30, 2048, or the end of the fiscal year following the fiscal year in which the PERA General Employee Retirement Plan is fully funded.
Local government support
The bill is supported by the League of Minnesota Cities, Metro Cities, the Coalition of Greater Minnesota Cities, and the Municipal Legislative Commission, and League testified on behalf of all these city groups. The Association of Minnesota Counties and the Minnesota Inter-County Association also testified in support.
About the Pension Commission
The Pension Commission is a 14-member panel comprised of seven House and seven Senate members that annually considers pension bills and amendments. The commission recommendations will be forwarded to the House State Government Finance and Elections Committee and the Senate State Government Finance and Policy and Elections Committee for consideration by both bodies.