Legislative Updates

Legislative Update

April 9, 2010

LEGISLATIVE COMMITTEE UPDATE The Minnesota Legislature returned to duty on Thursday, February 4, 2010. We wish our senators and representatives a successful session. The issues facing the State of Minnesota will require their dedication, persistence, and creative problem solving.

Activity began immediately for MRSEA, the Legislative Committee and retired employees of the State of Minnesota. On February 5, 2010, the Legislative Commission on Pensions and Retirement met to receive legislative proposals from the Executive Director’s of the Minnesota State Retirement System (MSRS), Public Employment Retiree’s Association, (PERA), and Teachers Retirement Association, (TRA). The legislative proposals were the recommendations of the Boards of Directors of the individual funds, tailored to meet the unique needs of each fund.

MSRS Executive Director Dave Bergstrom described the issue as a need to reach the full funding of MSRS. He stated:

“As of June 30, 2007. The General Plan…was about 95 percent funded. A 5 percent market decline in fiscal year 2008, followed by a 19 percent loss in fiscal year 2009, decreased the Plan’s funding ratio to a level below 70 percent, taking into account all market losses.” (MSRS Messenger, winter 2010, pg.1)

The Plan’s funding ratio since June 30, 2009, is now over 70 percent funded, as a result of investment gains of 15 percent. The MSRS Board of Director’s proposal shares the responsibility to reach fully funded status among retirees, active employees, deferred members (employees who have terminated, but who have not started to collect benefits). The Board’s proposal shares the funding responsibilities among all the affected parties.

Of particular importance to retired state employees is that part of the proposal that lowers the future annual (January 1) Post-Retirement Adjustment of 2.5 percent increase to 2.0. Under current law the annual adjustment is 2.5 percent each January 1. The Board proposal is to reduce the adjustment beginning January 1, 2011, to 2 percent. Annual adjustments would continue at the 2 percent level until the Fund reaches 90 percent funding, at which time the adjustment would return to 2.5 percent.

Please take the opportunity to read the details of the full MSRS Board of Directors proposal in the MSRS Winter Messenger 2010. Or at MRSEA’S web site www.mrsea.org As the legislative session continues, more bills affecting retirees will be introduced. We are currently aware of the following:

Minnesota Health Act, S.F. 118 (Marty) and H.F. 135.

Pharmaceutical Data Mining, S.F. 1044 (Doll) and H.F. 491 (Liebling).

Pharmaceutical and Medical Device Gift Ban, S.F. 1237 (Marty) and H.F. 1641 (Liebling)

Independent Prescriber Education Program-“Academic Detailing” S.F. 895 (Sheran) and H.F.160 (Liebling)

The last three bills have support of the Minnesota Prescription Coalition, which argues that passage of the legislation would control the fast rising cost of pharmaceutical drugs.

As many political observers predicted the United States Congress appears to again be at a meltdown over “healthcare reform”. Significant differences exist between the senate and house bills as well as between Democrat and Republican political camps. We all must follow the activities in Washington as the issue of health care reform is debated in Washington.

On February 12, 2010, I (Peter Obermeyer) attended the Annual Meeting of the Labor –Management Health Care Coalition of the Upper Midwest. At the meeting Peter Benner made a speech titled “Update on Health Care Reform Legislation”. Please take time to view the presentation at the MRSEA website www.mrsea.org. It is the best summary of state and federal healthcare issues and attempts at reform that I am aware of.

Now, what can you do? The Board of Directors of MRSEA and the Legislative Committee requests that you assist us to reach our legislative goals by doing the following:

1. Urging your local Minnesota State Senators and Representatives to vote for legislation supported by MRSEA. We will keep you updated concerning legislation that we support on the MRSEA website.

2. Notify MRSEA of legislation which is pending or has recently been introduced which affects retirees. We appreciate your support with these efforts.

MRSEA-Legislative Committee-Peter Obermeyer Chair Updates to Article

**On February 26, the Legislative Commission on Pensions and Retirement passed the proposed legislative changes to the retirement funds. This then was rolled into the 2010 Omnibus Pension Bill.

**On March 22, 2010 the National Health Care Reform Bill passed

Health Care Reform Legislation By Pete Benner

Short Legislative Update

June 2009

The legislature has recessed until next year. An omnibus pension bill (200+ pages) was passed by the legislature in the closing days of the session and signed by the Governor. There were not any provisions of general applicability that were of concern to us.

General Info bits and pieces:

MSRS Pension – Based on the legislation passed last year, the cost of living increase in January 2010 will be 2½%.
Social Security – no cost of living increases (COLA) in 2010. The good news is that there accordingly will not be any increase in Medicare Part B premiums in 2010.
Federal Health Care Reform – The major players are actively pursuing effective reform so far and appear to be working for solutions. The health industry trade group has made a commitment to help pass health care reform this year. A major stumbling block is expected to be the amount of taxpayer cost of a new program and how to pay for it (expand and subsidize coverage for the 47 million Americans who can’t afford decent health insurance now). Got a view on health care reform? To get involved, go to the AARP website:
www.healthactionnow.org