Minnesota retirement plans are just 75% funded

  • Article by: BRANDON STAHL , Star Tribune
  • Updated: January 19, 2013 - 10:00 PM

More than two years after the Legislature acted to shore up Minnesota's public pension plans, some indicators show the plans are worse off than they were before the legislation.

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fwallenJan. 19, 1310:59 PM

I'm tired of the legislator buying votes by beefing up public pensions. Pensions have three elements: contributions by individuals, contribution by the municipal entity, and income from investments. That is enough. Why should taxpayers, most of whom need to save for their own retirement, because they don't have a generous defined benefit plan, be expected to subsidize already generous plans? Let the entiies or the individuals contribut more.

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FrankLJan. 19, 1311:08 PM

The real problem is that in good years, the state ends up increasing the benefits, instead of using the excess income as a "rainy day" fund for the pension plan.

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jpcooperJan. 19, 1311:44 PM

Stoffel said the Duluth Teachers Fund will go to the state Legislature and ask for about $5 million to $10 million a year in state assistance until the fund is in better shape.

This is not a State issue, its a local issue! The Duluth Teachers Fund is a private organization with its own structure, bylaws and board of Directors whose sole purpose is to manage your Union teachers pension fund. If your fund is in jeopardy you needs to increase contributions, decrease payouts and invest better!

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yardboyJan. 20, 1312:23 AM

jpcooper, you are 100% correct in your post IMO. Duluth in general needs to start being accountable, it seems to me they are constantly short in being able to pay their bills.

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huggybear28Jan. 20, 1312:56 AM

Minnesota needs to look at what Wisconsin has done for it's pension system. Actually, every state needs to look at Wisconsin because it is the only fully funded pension system in the nation. During the good years, the money is reinvested in the fund. During the bad years, pension payments decrease to keep the pension fund fully funded. To make up for the losses from the current recession, pension payments have dropped 5-13% over 5 years. After the losses are spread out over 5 years and the fund is stabilized, payments can start going gradually back up depending on the performance of the fund. Many complained about the drops in payments but they have to realize many people outside of the public sector are worse off as they have lost way more than 13% of their retirement accounts.

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roymercerJan. 20, 13 3:37 AM

You private sector working rubes need to be prepared to pay more, and work father into your golden years, so government workers can hang it up in their 50s. Defer your retirement so others can have theirs.

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comment229Jan. 20, 13 5:29 AM

jpcooper: are you aware that the state already has bailed out the failed metro independent pension funds, years ago... and how did they do it... they raised the contribution on every teacher in the state and dumped the $5 billion..... yes, with a B... liability on the TRA fund. There were hints of fraud and gross mismanagement. Guess how many people went to jail? Guess what it did to the TRA fund which is very well run and has great people. If you and others have a problem, your first stop should be the state legislator who represented you at the time of this agreement. Here we go again, with Duluth, which I believe is the last independent retirement association in the state. Before they should be given any money to bring them to solvency, this group too, should be rolled into the state TRA program, but please, without the liability or at least downgrade the payout to these teachers whose pension fund personnel created their problem.

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comment229Jan. 20, 13 5:35 AM

What's that you say? Duluth teachers need a bailout because paying in more in not going to be a reality? Funny how large school districts can command a bailout for this from the state, and yet almost every small out state school district has lost its health insurance or pay through the nose, and yet, the same districts screaming about pensions, enjoy great health insurance plans. Where was the bailout for the rural community? The answer is simple: Tim thought it would be too volatile. Unreal... and nobody wanted a bail out... they just wanted to combine into one large group to bid competitively. It is unethical and damn near immoral to ask for help in one area, pensions, and not the other, health insurance and please, don't interpret this as a request for "free" health insurance for teachers. Nothing could be further from the truth. But please, look into a mandatory health insurance group for all state teachers. Tim is no longer here. Mark is... so this is the time. Whoever wrote that first and second bill years ago, should be asked to submit it again... who was that anyway? Anybody know?

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comment229Jan. 20, 13 5:36 AM

Finally, I don't know where the 8% investment projection is coming from, but, would the paper please let me know so I can get 8% on my money?

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folden1Jan. 20, 13 5:58 AM

That's the nature of the Ponzi: the first two groups get paid out of their too-good-to-be-true return on their investments and then the scheme unravels.

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