On Friday, the 13th, members of the Public Employees’ Pension Commission (PEPC) group convened to discuss the upcoming legislative session in hopes that they can lobby the legislature to pass a comprehensive pension bill. Present were the Directors of PERA and MSRS. Attorney Brian Rice has been communicating to key legislators that a comprehensive pension bill is long past due, given the sacrifices that state employees have made over the last decade that have resulted in Minnesota being lower than average with respect to public funding of public pensions.
Whereas the fund directors were doing their best to limit their comments to updates on what their respective boards were advising, the labor groups pushed back to drive a message that a pension bill and stronger pension benefits must be part of this year’s work. With social security benefits increasing by 14% and inflation by 18% since 2018, the time has come to work strengthening retirement security for people in all phases of employment, from prospective employees who want a strong retirement package to soon-to-retire people who would benefit from better benefits.
The Directors relayed their boards’ direction that decreases the assumed rate of return from 7.5% to 7%, which creates a headwind to the benefit side. This and other factors will be considered by the legislature as it convenes to decide what to do with the highly competitive process of deciding what to do with Minnesota’s $17B surplus.