There isn’t a lot to report so far on the Legislative Committee on Pensions and Retirement (LPCR). There’s the possibility of an omnibus pension bill being passed this year, but it remains to be seen how much of an appetite there is among legislators to make any significant changes to the various pension plans beyond adjustments that are mostly technical and don’t affect many people.
For the last couple of legislative sessions, there has been a lack of a labor coalition advocating for better pensions. There has been a fracture where some labor groups prioritize enhanced benefits for those in active service (increasing service credits and reducing retirement age, for example) and those who are retired and are looking for enhanced benefits (increasing cost of living adjustments for those who have retired). Each position has significant merit: younger public workers must work longer for fewer benefits than other states, and retirees have seen inflation erode about 20% of their purchasing power in the inflation spike of the last few years – with no end in sight. These two sides don’t seem to be talking to each other. And while MGEC leadership does not see these two positions as being mutually exclusive, the split has shut down the Public Employee Pension Coalition (PEPC).
The result is a labor coalition paralysis. In the last two years, all of the benefit enhancements passed by the legislature were initiated not by employees and retirees but by the funds themselves. The fund directors came to the legislature to say that they could afford enhancements (increasing the MSRS service credit to 1.9%, for example) and the legislators agreed.
You may have read in the past about the Public Employee Pension Coalition (PEPC). While that group is no longer active, many of its participants (including MGEC) have reconstituted a similar group, called the Public Employee Retirement Coalition (PERC). The idea is to fill the vacuum between those who want better pensions – for both active and retired employees – and the legislators who make the decisions about what the plans do. We will keep you updated as the work continues.