A Guest Editorial: Wow! Lawmakers work together to fix pension system
Editor's note: The following editorial was written by the editorial board of the St. Paul Pioneer Press, a media partner of Forum Communications, which includes the Echo Press.
Amid the dysfunction at the Capitol, Minnesotans should take note of a surprising example of good governing.
In fact, lawmakers' work on the Omnibus Pension and Retirement Bill is a model for the way legislative bodies, political parties and the governor can work together.
That they often don't makes the result all the more remarkable: the measure passed both houses on unanimous votes and Gov. Mark Dayton signed it.
The bill, the Pioneer Press reported, will bring more long-term stability to the retirement funds that teachers, firefighters and other public employees depend on. It includes increased employer and employee contributions, new state funding and changes to cost-of-living adjustments.
Dayton made clear in an April letter to House Speaker Kurt Daudt why action was so important: "Unfunded pension liabilities have adversely affected state, local and school district bond ratings in recent years."
The liabilities add millions of dollars in debt service costs, Dayton observed, noting that "setting our pension plans on a course to continued stability will be viewed favorably by rating agencies, improve our state's finances and keep our promises to hundreds of thousands of workers and retirees, who are depending on us to solve this problem."
The measure also deals with stress on the system as baby boomers retire from the workforce and as Minnesotans live longer, drawing pension checks for more years than projected.
But addressing the matter took three years, with the governor vetoing previous attempts. The 2017 bill included a provision the governor considered unpalatable: a so-called "pre-emption" measure that would prevent local governments from enacting mandates involving wages, work rules and other policies.
This year he asked for and received a "clean" bill.
Is it also a better bill? "Definitely," Sen. Sandra Pappas, a Democrat from St. Paul, told us. "We had everyone at the table."
Pappas, secretary of the Legislative Commission on Pensions and Retirement, notes work by Chair Sen. Julie Rosen of Vernon Center and Vice Chair Rep. Tim O'Driscoll of Sartell, both Republicans, with other commission members and with unions, pension fund representatives and additional stakeholders.
This time, "everything was in the right place to take care of this," Pappas said.
In dealing with the complexities of pension reform, "the fact that we have a pension commission is very helpful because we are the 'translator' for the rest of the legislative body and they have grown to trust us," she observes. "You don't really see that much on other issues."
"Everyone has to contribute to making this bill successful in reducing the unfunded liabilities," she told us. "Employers have to pay more, and that means local governments, school districts, the state of Minnesota; employees have to pay more; and the retirees had to give up something, in that they would receive a reduced cost-of-living increase."
That's hard, "because the promise when they're hired is that they're going to get this pension," Pappas said, "so it may not be as robust a pension as they had anticipated, but it was necessary to save the whole system."
Good and important work this session came close to becoming another political casualty, however, with the bill's final passage not taking place until the last few minutes of the session.
But, she said, "it passed; that's the important thing."
On this issue, agreed.