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 Response Page - Moe - Martin  Interview -      


These comments are responses to the questions listed below,
which were generated in regard to the
Donald Moe - Larry Martin Interview of
06-25-10.
.

 
The Questions:

1. (7.0 average response)  Increase Contributions?  One possible approach to reducing unfunded pension liabilities:  the Minnesota Legislature should increase retirement contributions by public employees and their state and local governments.

2.  (6.6 average response)  End Defined Benefits?  A second possible approach to reducing unfunded pension liabilities: the state should gradually replace--for non-public safety employees-- public pensions that guarantee specific benefits with a plan where benefits are based exclusively on amounts contributed and investments earned.

3.  (5.1 average response)  Transfer Oversight to Governor?  Administrative responsibility for public pensions in Minnesota should be transferred to the Governor from boards of the many pension plans.   

4. (7.9 average response)  Add Public Members?  Public members of varied backgrounds should be added to the membership of the Legislative Commission on Pensions and Retirement.

5. (7.7 average response)  Extend Retirement Age?  Instead of promoting early retirement the state should eliminate barriers to an extended work life and provide incentives to encourage the retention of older workers.

6. (1.2 average response)  Use Pension Funds to Balance Budget?  Pension funds should be considered as a source of revenue to help balance Minnesota's biennial budget.

Vici Oshiro

Interesting discussion, but I'm not ready to make choices without further discussion.

Chuck Slocum   (10)  (10)  (5)  (10)  (5)  (0)

The state must eliminate unfunded liabilities over a reasonable period of time. I have long admired Senator Moe’s insight and courage on these issues and believe that a combination of the suggestions (1-6) could secure the unfunded liabilities of the state and permanently reposition the system for the long term.   I also believe that public employees should be offered an “op-out” to create their own retirement plans.

Kevin L. Edberg   (5)  (10)  (8)  (10)  (8)  (1)

When I was a school board member, we transitioned certain benefit programs in exactly this way, shifting new employees to defined contribution programs and away from defined benefit.  It makes great sense. The speakers are correct that there is too much political influence exerted on pensions by employee groups. Changing that balance of power is critical to getting better policy.  The term "non-public safety employees" was confusing, as I first thought that meant "private" safety employees.

Chuck Lutz   (8)  (9)  (7)  (8)  (8)  (0)

Tom Triplett   (7)  (10)  (3)  (5)  (9)  (0)

Tom Spitznagle   (10)  (10)  (7)  (8)  (5)  (0)

David Beal   (5)  (5)  (7)  (9)  (9)  (1)

This was a solid, highly commendable effort to explore and surface for public debate an increasingly serious issue. That said, at least two additional facets of this topic need to be added to the discussion. The first is to what extent have the funding ratios for the state's "Big Three" pension funds deteriorated in recent years and why. The second is how much of a role have the lower returns that the State Board of Investment has faced in recent years played in lowering these funding ratios. These and other related issues are so important that they rate a follow-up session, to pursue this topic more completely.

Tom Hilber

Public Pensioners got a caddy plan the private sector can only dream about. Share the pain. [I] do not feel investments of these funds that lost to greedy investments and losses should be funded by bailouts by tax payers. No one is bailing out my losses in equity in my homestead or compounded interest on my credit card debt. Convince me this is not [going to] happen again in [Minnesota.]

Sally Olsen

You may or may not know that I am a member of the Board of Directors of the Minnesota State Retirement System.  I am one of three Governor's appointees on that Board.  I was first appointed by Governor Jesse Ventura in 2001, and reappointed by Governor Tim Pawlenty.

After reading your survey, I forwarded it to Dave Bergstrom, Executive Director of the Minnesota State Retirement System, as I believe there were certain things in the discussion that did not represent some of the facts concerning the pension boards and plans as I know them.

It is my understanding that Mr. Bergstrom will respond to the survey with some important information that will assist Civic Caucus Members in having a better understanding of our Minnesota State Retirement System pension program in Minnesota.

Public Pension issues are vitally important to many former, present and future employees of Minnesota's state and local governments.  Thus, I believe having as much good information regarding these plans as possible will help everyone understand them better.

Thanks for your consideration.

Bert LeMunyon   (2.5)  (7.5)  (7.5)  (5)  (10)  (0)

5. Extend Retirement Age?  The state should align retirement ages with those of the private sector.

Anonymous   (10)  (10)  (10)  (10)  (10)  (10)

Anonymous   (7.5)  (7.5)  (7.5)  (10)  (10)  (0)

Anonymous   (10)  (10)  (5)  (7.5)  (5)  (10)

1. Increase Contributions?   But this approach should include transitioning to defined contribution plans.  Approach #1 and #2 should not be mutually exclusive.

2. End Defined Benefits?   This approach should also include increasing public employee contributions for their defined benefit plans. Approach #1 and #2 are not be mutually exclusive.

4. Add Public Members?    Public members should include those from the private sector.  Especially from large corporations that have experience transitioning from defined benefit to defined contribution plans.

6. Use Pension Funds to Balance Budget?   To help address budget issues (both short and long term), the state should increase employee contributions and transition to defined contribution plans.  If this is what you mean by "source of revenue", then I strongly agree.

Mark Jenkins   (7.5)  (7.5)  (7.5)  (7.5)  (7.5)  (0)

1. Increase Contributions?   I support a full shift to contribution-based retirement plans for newly hired employees.

2. End Defined Benefits?   If by gradually, you mean replacing the current plans with contribution-based plans for all new hires, then yes, I support that.  I consider that a hard cut over, recognizing that the benefit to the unfunded liabilities will be gradual.

3. Transfer Oversight to Governor?  Responsibility for all plans should be centralized.  I would like to explore other options for where this group would report though.

4. Add Public Members?  Absolutely.  I would like to see pension professionals and actuaries from any of Minnesota's many nationally leading financial institutions invited to share their expertise on this commission.

5. Extend Retirement Age?  I agree that we should eliminate incentives for early retirement and that we should eliminate barriers to qualified employees continuing to work while they can contribute.  I do not favor incentives to keep employees beyond some arbitrary retirement age.  Employees should feel welcome to work as long as they wish without the expectation of added financial benefits.

6. Use Pension Funds to Balance Budget?  Absolutely not.  Employee pensions are a promise to pay from the state in exchange for an employee's hard work.  Any withdrawals from this account that do not go towards keeping that promise, threaten the state's ability to keep that promise.

Jay Kiedrowski   (10)  (10)  (7.5)  (10)  (5)  (0)

John DeSantis   (7.5)  (2.5)  (0)  (10)  (2.5)  (0)

4. Add Public Members?  This could bring more knowledge into the process.  The concern I would have would be the process used for appointing

5. Extend Retirement Age? I have an education background and I believe the early retirement programs open up jobs for the younger professionals.  However, it can also create a shortage.

Dave Broden   (10)  (10)  (10)  (10)  (10)  (0)

1. Increase contributions?   Public pensions need to be structured similarly to the private sector with some consideration of the risks to safety of law enforcement and fire personnel. A benefits-driven approach simply is not affordable in any way.

2. End Defined Benefits?  Benefits should be based on the amount contributed.

3. Transfer Oversight to Governor?  This is key to establish some degree of objectiveness and separate governance from those who use it.

4. Add Public Members?  Public membership is a must; the pensions spend public funds and we must separate in some way those who get the funds from those who pay--a balanced approach is key.

5. Extend Retirement Age?  Retirement must [be] viewed different today as living longer and more effectively we must extend the work force experience and use our expertise --we need people to continue to be pay-inners not just extractors of funds. There is a workforce shortage and best to fix that is by using wise experience.

6. Use Pension Funds to Balance Budget?  This is mixing apples and oranges. This simply solves nothing and makes matters worse.

Anonymous   (5)  (5)  (7.5)  (5)  (2.5)  (0)

2. End Defined Benefits?  Now that public sector wages are getting closer to private sector, the significant pension may upset the apple cart.  But, the current economy and ignorant views of government employees has hurt their wages and benefits, thus making the defined pension more fair.

John Sievert   (10)  (7.5)  (10)  (10)  (10)  (2.5)

6. Use Pension Funds to Balance Budget?  This would be a mess - just like Congress borrowing out of the Social Security Trust Fund so that there is really nothing there.  That has the potential to explode.

Anonymous   (10)  (10)  (10)  (10)  (10)  (10)

Darrell Pettis   (7.5)  (2.5)  (0)  (7.5)  (7.5)  (0)

1. Increase contributions?   During the past 5 years, contribution to PERA been increasing for both the employer and the employee.  Increasing the contributions is not a new idea.

2. End Defined Benefits?  Since the 1980's the public has been sold a bill of goods called the 401(k).  When the 401(k)'s were introduced, they were intended to be a supplement to traditional pensions not a replacement of pension.  They have replaced pensions.  With the market downturn in 2008, and the damage it did to individuals retirement accounts, the defined contribution pension the best alternative?

3. Transfer Oversight to Governor?  Governors are political animals.

5. Extend Retirement Age?  For new employees who started working after July 1, 1989, the largest public pensions, PERA - Coordinated and MSRS, eliminated the rule of 90 for all new employees.  The three most recent retirements in my department were all 65 or older.  Many public employees who are eligible for early retirement chose to stay until 65 due to health care costs.

Anonymous   (0)  (0)  (2.5)  (7.5)  (10)  (0)

2. End Defined Benefits?  If the State is going to decide where the monies are invested, the State should hold the risk.  Let the employee invest their contribution and their share of their employer's contribution the best THEY see fit, then that will leave the State off the hook.    Whatever the changes, we must look at a grandfather clause of 10-15 years. 

5. Extend Retirement Age?  Why do we not have a DROP?

Rich Gehrman   (7.5)  (2.5)  (0)  (7.5)  (10)  (0)

1. Increase contributions?  The incentives to work in government are weak as it is and it's hard to attract great talent so I would be cautious about reducing one of the few advantages government has in recruiting employees.  On a modest scale though this obviously would be necessary to keep the current system solvent.

2. End Defined Benefits?  Same reason as above, this is one of the few recruitment advantages government has. Also, in another 10 years the disadvantages of getting rid of pension funds in the private sector will be more painfully evident as increasing numbers of elderly are unable to support themselves.

3. Transfer Oversight to Governor?  Too much opportunity to have ideological whiplash as governors use pensions to make political statements.

4. Add Public Members?  Not sure what would be the argument against this. 

5. Extend Retirement Age?  Since public retirement benefits are generally quite good there doesn't seem to be much advantage to early retirement from the public's point of view. 

6. Use Pension Funds to Balance Budget?  It's important to pay as you go.

Elaine Voss   (7.5)  (5)  (0)  (5)  (7.5)  (0)

2. End Defined Benefits?  Why continue for public safety employees?  All or none. 

3. Transfer Oversight to Governor?  Too unsteady a process to be left to the governor.

Peter Hennessey   (7.5)  (7.5)  (0)  (0)  (7.5)  (0)

1. Increase contributions?   You forgot to add, “put it in a lock box”.  You forgot to add, “the amounts paid out will depend on the amount paid in and will not be covered from current contributions.

2. End Defined Benefits?  Ah, this is where you added it... Good job.  What is this qualification, "gradually" and "for non-public safety employees"? What is that?   How about, “all government employees?” 

3. Transfer Oversight to Governor?  How about professional pension fund managers?

4. Add Public Members?  How about just professional pension fund managers? Definitely not politicians.

5. Extend Retirement Age?  You don't turn stupid just because you hit 65. And some hit stupid a lot earlier.    But it really is unfair to double-dip or triple-dip. All this money comes from one captive source, the taxpayers, so the choice should be limited to government job or pension, not both. There are too many stories about people retiring from one government job at full pension, getting another government job that comes with its own pension, then getting a third job while drawing pensions from the previous two.  Sometime in life one really should do some productive work, i.e., in the private sector, where the value of your work is shown by someone such as a customer willing to pay for your goods or services.

6. Use Pension Funds to Balance Budget?  Absolutely not.  Reserves set aside for future payout should not be touched for any reason.

Michael J. Germain   (0)  (0)  (0)  (2.5)  (0)  (0)

1. Increase contributions?   This is just a cowardly approach to undermine benefits that were collectively bargained for, and the money for which was squandered by the fiscal stupidity and brain-dead budget process that has characterized the Pawlenty era.

2. End Defined Benefits?  Again, this is an incredibly stupid idea.  Where have the defined-contribution plans of most employees in the private sector ended up?  Gone in a puff of greedy Wall Street, and smoke and mirrors.  This is just yet another dumb idea that lines the pockets of greedy individuals who have already raped and pillaged the economy.  After the crash of the economy, in case you haven't noticed, people don’t have any retirement savings.

3. Transfer Oversight to Governor?  Who but a right wing extremist would even consider this to be anything other than a dumb idea.

4. Add Public Members?  Public members of varied backgrounds?  [Who] have their own axes to grind and are accountable to no one?  Dumb idea.

5. Extend Retirement Age?  What, we are supposed to work into our 70's and 80's to satisfy some brain dead ideologue?

6. Use Pension Funds to Balance Budget?  Rather than raising taxes on people who have made huge amounts of money while the economy tanks, raid pension funds?  Back in the 1970's and 1980's this was considered stealing.

Ray Schmitz   (10)  (2.5)  (2.5)  (10)  (7.5)  (0)

1. Increase contributions?   The only argument against this is the cost to the taxpayers, but there does not appear to be any other choice at this time.  Reduce them when the market is better or other factors appear to be balancing the books.

2. End Defined Benefits?  Seems as if this the future of pensions, but does it really guarantee a successful system?  I think not.

3. Transfer Oversight to Governor?  Wonder if this would fix anything; suspect not.  Many of the problems are caused by the politics in the legislature.

4. Add Public Members?  This should really be a professional group from across the spectrum.

5. Extend Retirement Age?  Having retired in my late sixties I can speak to this with some experience.  Better to keep at it until post 65 or even 70.  Part of the problem as you note is early retirement and benefits for early retirees in police and fire, and they are not limited to those who we might not want serving into old age, so of the recent additions to this group are not in the proper class.

6. Use Pension Funds to Balance Budget?  What a poor idea.

Anonymous   (7.5)  (2.5)  (0)  (10)  (7.5)  (0)

Bob White   (10)  (10)  (10)  (10)  (10)  (0)

C. M. Denny   (5)  (10)  (10)  (10)  (10)  (0)

R.C. Angevine   (7.5)  (2.5)  (0)  (10)  (7.5)  (0)

2. End Defined Benefits?  If the state is going to push more of the pension responsibility unto the employee then I would offer that corresponding government salaries must also increase.  As the spouse of a long time, now retired, teacher I would offer that one of the trade-offs for low teacher salaries was the prospect in retirement of a good, solid pension.

3. Transfer Oversight to Governor?  I am not in favor of putting control of all pensions in the hands of a single individual.  I might favor an agency or commission to oversee all pension plans.

Mina Harrigan   (10)  (10)  (2.5)  (5)  (10)  (0)

3. Transfer Oversight to Governor?  Proposals need legislative approval.  But any that present potential financial liability to tax payers should be under state control.

Joe Mansky   (7.5)  (5)  (5)  (10)  (10)  (2.5)

2. End Defined Benefits?  By closing the plan and not bringing in any new revenue, would this place at risk the people who are still collecting pensions under the existing system in 20-30 years? If paying future costs are the issue, why not just reduce future annual adjustments to persons collecting pensions?

5. Extend Retirement Age?  This needs to happen. The fact that progressively fewer people who are eligible are taking advantage of rule of 90 would indicate that there is a need and in many cases a desire to work past the conventional retirement age. Who can afford to take a 50% pay cut at age 62 or even at 65? And if the demographic projections are correct, how do we replace the skills lost by persons leaving the work force?

Dennis McCoy   (2.5)  (0)  (0)  (7.5)  (5)  (0)

1. Increase contributions?   There have already been significant increases to both groups in the last several years.

2. End Defined Benefits?  Public safety employees must be included in any proposed solution as they already have a more expensive system which has been regularly abused and allows people to retire as early as age 50.    Evolving to a defined contribution system is inevitable.

3. Transfer Oversight to Governor?  If you are attempting to avoid political influence, this would be the worst possible option.

4. Add Public Members?  Public members should be included.

5. Extend Retirement Age?  This really depends on how much carrot or stick is involved.

6. Use Pension Funds to Balance Budget?  The legislature is too short sighted and partisan to manage this responsibility. I suspect they would raid the funds and never replenish them as happened in the early 1980's. If they managed the pension funds as capably as they've managed the state budget it would be a disaster for anyone relying on those funds.

Anonymous   (0)  (10)  (10)  (5)  (10)  (0)

    

The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions, reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   Verne C. Johnson, chair;  David Broden, Charles Clay, Marianne Curry, Bill Frenzel, Paul Gilje,  Jim Hetland,  Marina Lyon, Joe Mansky, John Mooty,  Jim Olson,  and Wayne Popham 


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The Civic Caucus, 01-01-2008
8301 Creekside Circle #920,   Bloomington, MN 55437.  civiccaucus@comcast.net
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