State taxpayers would have to share the cost of saving a Minneapolis public employee retirement fund that could go broke within a decade if it is not merged with a statewide pension fund.
The Minneapolis Employees’ Retirement Fund has 4,600 employees drawing pensions and only 200 still working, a situation that is rapidly drawing down its remaining funds.
A proposal to merge it with the state’s Public Employees Retirement Association is contained in both SF 2644 and SF 2918, both from Sen. Don Betzold, DFL-Fridley. Both are up for hearings in the Senate Finance Committee Wednesday before moving to a floor vote.
Advocates of the merger say that adding the MERF employees, all of whom were hired before 1979, to the statewide pool where Minneapolis employees have gone since then will save the city and state from a costly bailout later on.
But a previous attempt to merge the pension funds last year failed because Minneapolis residents would have seen their property taxes rise as much as 19 percent to offset a weakening of the state fund.
The new plan appears to spread the pain out a little more between Minneapolis, other employers and the state, according to the League of Minnesota Cities
The bill would require the state to spend $36.5 million more a year for the next 19 years to blunt the hit that the statewide pension plan would take by incorporating Minneapolis, he said.