Agenda Packets - 1986/11/03 - Laserfiche WebLink

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Public Employees Retirement Association (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 that proposed contributions and current reserves are sufficient to fully fund the increases in the opinion of one or more recognized pension actuaries who are independent of the PERA organization. Any benefit increase or contribution reductions permitted by excess reserves or excessive currant• contributions or combinations of the two should be of such amounts as to benefit the employer and employee equally as a percentage of overall employee salary. 3. PERA should not be authorized to create any additional health care plans for retired employees. However, direct transfer of premiums from PERA to the Minnesota Comprehensive Health Association should be authorized at the request of any PERA member from the member's own account. The present PERA retirement system in effect provides a cafeteria plan approach to retirement benefits. Those who need a spousal retirement annuity or life insurance coverage can purchase these benefits from PERA accepting actuarially reduced primary retirement benefits. Retirees who are not eligible to remain in the group health insurance plan of the local unit from which they are retiring, can always use their retirement funds to the extent they are adequate to buy health coverage through the Minnesota Comprehensive Health Association for persons that are 65 years of age and less.. Persons 65 and over without automatic medicare coverage can buy that coverage at reasonable cost. 4. If any increase in benefits is enacted for PERA retirees, the resulting costs should not be paid from the PERA fiord, but rather should be financed by a direct appropriation from the state general fund. 5. The LMC supports the continuation of the Minnesota post -retirement investment fund as a means of providing post -retirement increases in the pension benefits of retirees under the statewide pension. funds. 6. No money or funding should be transferred directly or indirectly from PERA to less well funded plans. Since integration of pension fund administration mechanisms may lead to combining the funds, the INC. opposes any move to combine administration of the three statewide pension programs. 7. The Legislature should amend the present provision on disbursement of the two percent tax provision on automobile casualty insurance to allow expenditures by the recipient political subdivision of any excess over the employer's share of police retirement costs for any police department purpose instead of requiring payment to the PERA police and fire fund. -47-