Minnesota Gov. Mark Dayton has signed into law a bill that will stabilize and protect public pensions for decades to come.
More than 300 state workers and retirees crowded into the rotunda at the Minnesota Capitol on Thursday to watch as Dayton signed the bill with a flourish, announcing, “That’s the last bill I’ll sign as governor of Minnesota, and what a great one to end on.”
The reform will immediately save $3.4 billion and fully fund the state’s public pension systems within 30 years. The bill passed the Senate and House unanimously.
The sustainability plan:
- Increases employer and employee contributions
- Includes new state funding
- Reduces cost-of-living adjustments (COLAs)
- Reduces the assumed rate of return from 8 percent to 7.5 percent
Dayton said numerous workers and retirees have told him the measure is vitally important to their piece of mind and their financial security.
“They know they’re going to have a pension today, they’re going to have a pension tomorrow,” he said. “I’m very, very happy we can find that security for all of you.”
Dayton thanked the House and Senate for their unanimous vote, singling out Sen. Julie Rosen and Rep. Tim O’Driscoll, who co-authored the legislation and shepherded it through the legislative process.
“This is truly an historic day,” Rosen said, adding that the measure improves security for retirees and the state’s financial stability.
“I do hope this story, this bill, this day, does not get lost in the news cycle,” she said. “Sometimes in this building we just want to focus on the negatives and how different we are, but this was such a collaborative issue and so very important for the state.”
O’Driscoll said the reforms will reassure bond rating agencies, who had started to make note of the state’s unfunded pension liability, endangering future bond rates.
“When you have all the legislators, all stakeholders and all people on board, you know you’ve done something right,” he said.
AFSCME Council 5 and its allies in the Public Employee Pension Coalition, which represents more than 25 public sector unions, retiree groups and affiliated organizations, strongly supported the measure.
Council 5 Legislative Director Julie Bleyhl said the bill assures public workers they’ll have secure and dignified retirements.
“The pension bill represents shared sacrifice by everyone, including the state, the employer, employees and retirees,” she said. “By working together and pulling together, we have ensured that public pensions will stay stable for decades to come. We have ensured that our government fulfills its promise to public employees.”