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August 2010 Newsletter

PEPSA The Choice of Our Generation

2010 is shaping up as a pivotal year for PERA members in Minnesota, The legislators and new governor that we elect this fall will be making decisions about proposed reductions in pension benefits that would drastically affect the ability Steven T. Johnson of PERA members to retire President with a reasonable standard of living. While we recognize that the state of Minnesota and local units of government are affected by the serious recession, it seems unfair to reduce retirement benefits of thousands of public employees, as we are the ones who have labored to "do more with less" for the last few years under failed state leadership. Nationally there is a political philosophy, growing stronger in Minnesota recently, that public employees are overpaid, have extravagant benefits, including pensions, and that these must be reduced to balance budgets. Such simplistic answers to complex problems are never the answer and in this case are just plain wrong. The reality is that public employees are part of the solution and should be utilized as an asset as Minnesota re-establishes itself as a leader in meeting the needs of an

Get Involved to Protect PerA BenefIts

aging population, repairing our crumbling infrastructure, changing healthcare delivery, and protecting our citizens. There is a pivotal role for public employees in the future of this state. Electing responsible lawmakers, who represent us and who respect the work we do daily serving the public and our desire for a reasonable retirement after years of service, has to be our only focus in this election. I urge you to get involved, ask questions and press the candidates on their position on public employee pensions. Your financial future will depend on how they vote at the legislature on pension issues.


By Darrel Bunge and Chuck Westin, PEPSA Lobbyists There are two issues of interest to PePsA Members:

First is the matter of the Defined Benefit Plan which a majority of PERA members now enjoy and the aggressive push for a Defined Contribution Plan for new hires. The Legislature has requested a study by the Plan Administration to be presented in March of 2011 to the Legislative Pension Commission. The problems with the Defined Contribution Proposal is that as new employees are entered into the plan, the dollars dry up for the current Defined Benefit Plan and the employee is shorted at retirement. We were awakened to take a stronger tact at the Legislature from a diligent AFSCME member, Council 5, Katie Farber of Hennepin County. She reminded us that several of our friends in the Senate voted for the pro direct contribution legislation and that we need to educate those legislators on the down sides of that plan. We always appreciate input and ask that you also be active, with a special thanks to Katie Farber for her positive action. The Second issue is the changes made in 2010 to the State's three largest pension systems. Some of the state's former public employees hope to block changes made this year to the state's three largest pension systems. A pending lawsuit claims the state is going back on a promise it made to tens of thousands of workers. The State's three pension systems include the Teachers Retirement Association (TRA), which covers teachers, Minnesota State Retirement System (MSRS), which covers state employees, and the Public Employees Retirement Association (PERA), which covers local municipal workers. Roughly 144,000 retirees receive an average payment between $1,300 AND $2,300 a month, depending on which fund they're in, everyone from prison guards to police officers to assistant attorneys general. Supporters say the changes were needed because the funds all took a hit when the stock market fell two years ago. Most money that is raised to pay out pensions comes from income on the investments. Each pension fund is different, so the exact changes made this year vary. In general, current employees and employers will have to pay more into the fund, while retirees will get smaller increases in the yearly increases in their payouts. For retired teachers, payouts will be frozen for two years, starting next year. Supporters also say asking everyone to sacrifice as the fairest way to do it. This year's changes are a preemptive move that will shore up the funds now in a way that prevents the need for a taxpayer-funded bailout much later. It simply would have been too risky to wait and expect that really positive investment returns would bail out the three funds, or worse than that, expect the state to bail them out. The lawsuit filed this summer only challenges the changes affecting retirees, not changes made for current employees. The suit asks whether a state can change the terms of a pension after a worker has started collecting it.


Stephen Pincus, one of the lawyers suing the state, said the state arguably had the ability at certain times during those peoples' working lives to make any adjustments. "But once they took their retirement, the deal was set" he said. "And now it's not fair for them to go back on their commitments to their retirees. Supporters of the changes say this isn't the first time they've changed the rules to ensure funds' solvency. State Sen. Don Betzold, DFL Fridley, sponsored this year's changes in the state senate and said he thinks they'll stand. "To say we can never change anything would create, I think, problems for the system," Betzold said. "I don't know how many employees would take much comfort in the fact they're in an unfunded retirement plan." Betzold also notes that the changes do not cut the amount the retirees receive; they only change the yearly rate of increase. This could also be a test case to gauge what courts will allow states to do to shore up their retirement funds, which has become a more pressing issue in states like Illinois and New Jersey. The next hearing in the Minnesota Case is set for September 15th. Chris Jahnke, Scholarship Committee

Please take advantage!

The PEPSA Scholarship Program will again be awarding scholarships totaling $3000 for the 2011 and 2012 academic years. To be eligible the applicant must be a current PEPSA Member in good standing or a spouse, child, grandchild, or stepchild of a PEPSA Member in good standing. In addition, the applicant must be planning to attend, or already be enrolled in an undergraduate program at an accredited educational institution, a public or private college, university, community or technical college. Members of PEPSA's Board of Directors or their children or grandchildren are not eligible to apply. More information and the official scholarship application may be obtained by clicking on the "News" link at The deadline to apply for the PEPSA Scholarship Program is March 1, 2011. The application must be completed in its entirety to be considered eligible for the scholarships.


Applications are already being requested for the 2011-2012 academic year, please contact the PEPSA Office at 1-877-51PEPSA (1-877-517-3772) to request an application. Or on the PEPSA website click on the "join us" section. The deadline is March 1, 2011 to apply. There is $3,000 available for scholarships. Applicant must be a current PEPSA member in good standing or a spouse/ child/grandchild/stepchild of a PEPSA member in good standing. Applicant must be planning to attend, or already enrolled in an undergraduate program at an accredited educational institution, a public or private college, university, community or technical college.


Change of Address Form

Name__________________________________ New Address_____________________________ ______________________________________ ______________________________________

Please fill out and send in to the PEPSA Administrative office at:

Westin, Schulte & Bunge 400 Selby Ave., Suite J St. Paul, MN 55102

Use this form for your PAC Contribution, find a PERA Member to join us, or if you have not renewed your 2010 dues.

Membership Form

Name ______________________ Address_____________________ City _______________________ State_____________Zip________ E-Mail _____________________

County of Employment

Annual Dues (Dues, Contributions and gifts to

PEPSA are not tax deductible as charitable contributions.)


Active Employee $20.00 ______ PERA Retiree $16.00 ______ Lifetime Membership $120.00 _____ (Retired) PAC Contribution $_________ Return to: PEPSA 400 Selby Ave., Suite J St. Paul, MN 55102

* This is not an invoice.

Come Join Us for the Annual Meeting!

Date: Friday, September 10th, 2010 Time: 1:00 p.m. Place: Michael's Restaurant, (next to Americanna Inn) 520 So. Hwy 10, St. Cloud, MN

staff from Mn House research will be there to discuss the defined benefit vs. defined contribution study issue, and the lawsuit brought on by Retirees against the State of MN. On behalf of the PEPSA Board of Directors, I would like to thank each of you for your support during the previous year and extend an invitation to YOUR annual meeting. You will be voting for various PEPSA positions, officers and regional directors. To assist in planning ample space for the

meeting, kindly R.S.V.P. the PEPSA Administrative Office by calling 1-877-51PEPSA, OR e-mail your response to [email protected] At the Annual Meeting, we will be finalizing our goals for the 2011 legislative session, and your input will help us continue in the same positive direction. The meeting is both informative and enjoyable ­ and don't forget the door prize drawing! Hope to see our membership attend! Refreshments provided. Steve Johnson, President

Offices up for Election

Vice President . . . . . . . . . . . . . . . .Michael Scanlan Secretary . . . . . . . . . . . . . . . . . . . . . . . Betty Dagen Region 1 . . . . . . . . . . . . . . . . . . . . . John Zanmiller Region 3 . . . . . . . . . . . . . . . . . . . . . . .Don Nikkola Region 5 . . . . . . . . . . . . . . . . . . . . Kathy Poslusny Region 7 . . . . . . . . . . . . . . . . . . . . . . Terry Fawcett Region 9 . . . . . . . . . . . . . . . . . . . . . . . . . Don Matz Region 11 . . . . . . . . . . . . . . . . . . (currently vacant) Region 13 . . . . . . . . . . . . . . . . . . . . . . . Steve Kley

PEPSA Board of Directors

President ­ Steve Johnson Vice President ­ Mike Scanlan Treasurer ­ Mike Scanlan Secretary ­ Betty Dagen

Region 11 - (Big Stone, Chippewa, Grant, Kandiyohi, Lac qui Parle, Pope, Renville, Stevens, Swift, Traverse, Yellow Medicine) (Vacant) Region 12 - (Cottonwood, Jackson, Lincoln, Lyon, Murray, Nobles, Pipestone, Rock, Redwood) (Vacant) Region 13 - (Blue Earth, Brown, Faribault, Freeborn, LeSueur, Martin, Mower, Nicollet, Sibley, Watonwan) Steve Kley Region 14 - (Carver, McLeod, Meeker, Scott, Wright) Chris Jahnke Political Fund - Sam Modderman PEPSA Administrative Office - Charles Westin, Cindy Schulte & Darrel Bunge

Region 1 - (Dakota, Washington) John Zanmiller Region 2 - (Dodge, Fillmore, Goodhue, Houston, Olmsted, Rice, Steele, Wabasha, Waseca, Winona) Ryan Kraft Region 3 - (Hennepin) Mike Scanlan, Don Nikkola, Carolyn Johnson Region 4 - (Ramsey) Lori Kinny Region 5 - (Anoka, Chisago, Isanti, Sherburne) Kathy Poslusny Region 6 - (Aitkin, Benton, Douglas, Kanabec, Mille Lacs, Morrison, Pine, Stearns, Todd) Mary Anderson Region 7 - (Carlton, Cook, Lake, St. Louis) Terry Fawcett Region 8 - (Beltrami, Cass, Crow Wing, Hubbard, Itasca, Koochiching, Wadena) RaNae Whitbeck Region 9 - (Clearwater, Kittson, Lake of the Woods, Marshall, Pennington, Red Lake, Roseau) Don Matz Region 10 - (Becker, Clay, Mahnomen, Norman, Ottertail, Polk, Wilkin) Gloria Watro

400 Selby Ave., Suite J St. Paul, MN 55102 1-877-51PEPSA or (651)224-8146 Website: e-mail: [email protected]

Public Employees Pension Service Association 400 Selby Ave., Suite J St. Paul, MN 55102


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