2016 Education Minnesota Retired
Legislative/Political Action Conference
Members of Education Minnesota Retired and Ream participated in an annual Legislative/Political Action Conference on February 18. The weather cooperated this year so members had an easy drive to the meeting.
Jay Stoffel, Deputy Executive Director of TRA, reviewed the financial status of TRA, explained the experience study results and cost impacts, and discussed sustainability options. The Mission of TRA is to provide retirement security for Minnesota teachers and to attract and retain experienced teachers and a high quality education system.
TRA membership is 180,000 with benefit payments of $1.6 billion per year. The average benefit is $2,300 for new retirees. TRA retirees live in Minnesota at an 87 % which means the retirees impact the state economy.
Experience studies take place every four years to help assure that TRA annual valuations are accurately stating the system’s long-term projected costs.
Two types of assumptions are studied: Economic and Demographic. Economic Assumptions include the study of inflation, wage growth and the expectation of long-term investment returns. Demographic Assumptions include the study of mortality or life expectancy increases.
There is no surprise that 75% of TRA’s active-member population is female. The life expectancy has increased dramatically for females, from 88.6 to 90.3. TRA has 482 benefit recipients over the age of 95. With this increase in age, the projected lifetime payouts are projected to rise from $855,000 to $928,000 or an increase of approximately 10%.
The TRA Board uses the following guiding principles in determining sustainability goals: shared sacrifice, intergenerational equity, long-term financial sustainability and maintain recruitment and retention values. With this in mind, the TRA Board is recommending the following changes to the Legislature: one (1) percent increase in the employer contribution rate, change in retiree cost-of-living adjustment of one(1) percent for five years, 1.75 percent thereafter (affects current and future retirees, and to extend full amortization of the funding deficit from 2037 to 2046. The Legislative Commission on Pensions and Retirement is evaluating this proposal.
Tim O’Neill from the Twin Cities Labor Market Department presented information on Minnesota demographics and the change in our labor market. Minnesota has an aging population which affects greater Minnesota more than urban and suburban areas. Our population is more diverse especially younger ages. Minnesota is more educated than other states. Minorities have a greater percentage of unemployed people.
James Haggar from Education Minnesota talked to us about how we can and should become involved in campaigns. The AFT is funding retiree members working with campaigns. He distributed a 2016 Precinct Caucus Guide explaining caucus and listed some sample resolutions developed by Education Minnesota.
Please attend your precinct caucus and present one or more of these resolutions. A copy of this guide is included on this web page.
Jodee Buhr, Education Minnesota Lobbyist, gave an update of issues that will be discussed during the upcoming Legislative Session which will begin on March 8. Topics important to teachers (active and retired) are pensions, PreK, full-service Community Schools, testing, health insurance, teacher recruitment and retention, TDE, student support services, and making higher education more affordable.
The Highlight of the Conference was having two members of the Legislative Commission on Pensions and Retirement available to give us information and answer questions. Representing the Senate was Julie Rosen, a Republican, and the House was represented by Paul Thissen, a Democrat. Both support and UNDERSTAND pension issues. It was quite visible on how they worked together and respected each other. A Secure Choice Act, a pension system for small business employees, is being discussed.
Education Minnesota Retired and REAM are planning a lobby day in the near future. More information will be forthcoming on dates and times.
Myrna Doran Reporting
