Agenda Packets - 1985/01/02 - Laserfiche WebLink

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PERSONNEL. AND PUBLIC SAFETY WMITTEE PROPOSED POLICIES PPS - I. PERA BENEFITS, FINANCING, AND ADMINISTRATION (A) PERA 1. The League of Minnesota Cities opposes modification of the "high five" formula. The adoption in 1973 of the "high five year" benefit formula for PERA has provided very adequate pension benefits for career municipal employees. Further shortening of the averaging period would create windfalls for some PERA members and multiply opportunities for manipulation of service and salaries to maximize pension benefits without proportional contributions to the fund. 2. Any increases in PERA benefits should be granted only to the extent proposed contributions and current reserves are sufficient to fully fund increases in the opinion of one or more recognized pension actuaries who are pendent of the PERA organization. Any benefit increase or contribution ctions permitted by excess reserves or excessije current contributions or inations of the two should be of such amounts as to benefit the employer and ovee eaually as a oercentaae of overall employee salary. roblems similar to those the Among all the proposals for benefit increases, the one that most threatens the financial soundness of PERA and other Minnesota public pension funds, is the proposal to provide health insurance to retirees paid from the pension fund. Full payment would commit the taxpayers to an open ended promise to pay a cost that is escalating at the rate of 15% to 20% per year even in low inflation years. Partial payment would provide a foot -in -the -door for partial payment. Either would hamper efforts to control health care costs by making the recipient responsible for a significant portion of charges to encourage thrifty use. 5. The LMC sup investment fund as a benefits of retirees enacted for PERA reciree und. but rather should b ion of the ation of pension fund administratio the LMC opposes any move to combine POST Retirement -13-