MRSEA Pension Bill Testimony

Chair Frentz members of the Commission and Commission Staff. Thank you
for the opportunity to speak with you today.

My name is Mike Landers. I served for 27 years as a finance specialist with the
Minnesota Department of Education. I’m here today on behalf of The
Minnesota Retired State Employee Association (MRSEA). MRSEA was
established in the 1940’s initially as a social organization, however, we
expanded our focus in the early 1970’s to include advocacy on behalf of our
members, particularly in the areas of pensions and group insurance. We
represent thousands of retired state employees from all levels of state
government and from all across the State of Minnesota and beyond.

MRSEA strongly supports the provisions of HF 2237. This legislation provides
a fiscally responsible and balanced approach to begin to address the needs
of both active employees and retirees.

It is fiscally responsible because, as the MSRS General Plan returns to full
funding, it offers modest benefit increases to begin addressing the sacrifices
made by all parties in the 2018 pension bill in order to restore the plans to a
sound fiscal foundation. And it does so without requiring outside funding.
These changes can be completely funded by the plan itself and is therefore
cost neutral to the state budget.

It’s balanced in that it increases the annuity benefit multiplier from 1.7 to 1.9
percent and offers a one quarter of one percent increase in retiree COLA
thereby addressing the needs of both active employees and retirees. This
balance has been the hallmark of successful public pension agreements in
the past, both in times of sacrifice and when there have been opportunities
for benefit improvements.

HF 2237 is a step in the right direction and we ask that you vote for it to be
included in the omnibus pension bill.

However, this bill still leaves significant unmet needs. The COLA study
required by the 2018 pension bill showed inflation caused a significant loss in
purchasing power over a retiree’s lifetime – and that was before the surge in
inflation we recently experienced. Let me give you an example of someone
covered by the MSRS General Plan who retired in 2015. When I add up the

differences between their pension COLA and the Annual Rate of Inflation
between 2017, the first year they were eligible for a COLA and 2024, that
difference is 19 percent. If the February inflation rate of 2.8 percent continues
throughout the whole year, the difference will be a loss of more than 20
percent over this 9 year period. So, when resources become available in the
future, we ask that you remember and address the unmet needs of the public
employees who work so hard to provide the high quality of life that all
Minnesotans enjoy.

Thank you for the opportunity to speak with you today.
​
Michael J. Landers, Ed.D.
Legislative Committee, Chair
Minnesota Retired State Employee Association​