Omnibus retirement bill aims to stabilize public pension plans

The omnibus retirement bill covering several groups of public employees in Minnesota cleared its first hurdle Friday when the House Government Operations and Elections Policy Committee approved HF565 on a divided voice vote, sending it to the House State Government Finance Committee.

Rep. Tim O'Driscoll

Several members and testifiers made reference to actions by two other bodies: The Legislative Commission on Pensions and Retirement, where the language of a delete-all amendment originated; and the Senate Finance Committee, where members said provisions relating to the Teacher Retirement Association were removed Thursday from the companion bill, SF545, sponsored by Sen. Julie Rosen (R-Vernon Center).

Three amendments were successfully offered by the House sponsor, Rep. Tim O'Driscoll (R-Sartell), who chairs the committee. The first was the delete-all amendment with the commission’s recommendations, the second made reference and grammatical corrections and the third fixed an erroneous date reference and moved another provision to its proper place within the 231-page bill.

O’Driscoll termed the legislation “a work in progress.” 

In a May 12 memo to the committee, the commission listed more than a dozen bills from which provisions of the omnibus retirement bill were drawn. The commission crafted the provisions of the bill over the course of 11 meetings in 2017, including two earlier in the week.

One major provision would phase out so-called augmentation for many people in the covered plans. For certain workers who separate from their public employer before retirement, deferred benefits would no longer be augmented at a rate of a few percentage points per year until the time they retire. That rate can exceed the cost of living adjustments for those who remain public employees for the length of their careers.

“It’s an inequity in the system that should addressed,” said O’Driscoll.