Governor Mark Dayton has signed a bill that overhauls Minnesota’s public pension system.

Chief Author of the bill State Senator Julie Rosen (R-Vernon Center) says it’s the most important pension reform bill in the state’s history.

“We were receiving some very large warnings from the bond houses. Moody’s and S&P here recently that we need to get our pension liability under control, so we did. We took a major reform. Everyone stepped up to the plate, all the funds, all the pensioners, the active and the retirees.”

Rosen is the chair of the Commission on Pensions and Retirement and adds the overhaul will save Minnesota 6.1-billion dollars over a 30-year period, with 3.4-billion dollars in immediate savings and another 2.6-billion dollars in ongoing savings.

“This is over a half of a million people in the state of Minnesota that rely on their pensions. It’s extremely important to make sure that those funds are stable. So we have adjusted as much as we possibly can to make sure that they are stable and they will be stable for the next 30-years.”

Passing the bill comes at a time when the state is 37-billion dollars behind in funding pensions.

“We asked for the retirees and the active pensioners to pitch in. It depends on which fund there is, there is delayed COLAs, cost of living adjustments. There isn’t an automatic 2-percent adjustment on your pension when you retire and you were getting it on a yearly basis, a 2-percent increase.”

The bill also reduces the investment rate of return to 7.5-percent, which reflects market returns. It also defers cost of living adjustments until the normal retirement age of 66 for those who retire after 2023.

“It was extremely gratifying to be there and see that bill signed.”

 

Senator Rosen speaks at the pension bill signing ceremony.