A state labor union is asking the Minnesota Legislature for the opportunity for its staff members to participate in the state employees’ pension plan.
If lawmakers grant this request from the 22 workers at the Minnesota Association of Professional Employees (MAPE), they would join others from nongovernmental organizations — including two other labor unions — that are designated in law as public employees so they can join one of the state’s public pension systems.
These employees and their employers are required to pay the annual contributions into the pension fund, and no taxpayer dollars are used, according to Larry Martin, executive director of the Legislative Commission on Retirement and Pensions.
This special designation is available for quasi-governmental organizations created by state statute, or others that get a large proportion of funding from the state, or for organizations that have a “fairly tight connection” to government but have a small number of employees, Martin said.
“It’s not uncommon that unions have been covered by public pension plans,” said Dave Bergstrom, executive director of the Minnesota State Retirement System.
The Minnesota State Retirement System, which is the pension system that MAPE is asking to join, has more than 12,000 currently employed members who qualify for this designation, or about 27 percent of its active membership. Most of them work for the University of Minnesota or Metropolitan Council.
MAPE’s request comes on the heels of approval in 2007 for staff of Middle Management Association, a union representing about 2,900 supervisors employed by the state of Minnesota, and the 2008 approval for employees of the Minnesota Government Engineers Council, another union that represents engineers working for the state. Currently, four people from those two organizations are participating in Minnesota State Retirement System.
Sen. Sandra Pappas, DFL-St. Paul, chair of the legislative pension commission, submitted the Senate version of the MAPE bill (an identical bill was introduced in the House). When asked for the rationale behind the bill, Pappas acknowledged that she didn’t know. “I guess no one’s ever asked me, ‘What’s the rationale?’ I wasn’t even thinking of it being the union employees,” Pappas said.
“It’s a small number of people… and they’re paying for it,” she added. “It doesn’t cost the system anything. I don’t think we’re going to start a stampede. There aren’t many union employees who are connected to state government.”
Bergstrom noted that it doesn’t help or hurt the Minnesota State Retirement System to add a handful of union employees or other small nongovernmental groups. “Their groups are so small, it doesn’t matter,” he said.
Once added to the system, these groups are treated the same as state employers. If an unfunded liability develops, contribution rates would be increased. And ultimately, each employer is on the hook for any unfunded liability if the plan were to fail, Bergstrom said.
The Public Employees Retirement Association also has a long list of nongovernmental employers whose staff can participate in the pension system.
Some of the groups that are in either the Minnesota State Retirement System or Public Employees Retirement Association include the League of Minnesota Cities, the Townships Association, the Duluth Port Authority, the Minnesota Crop Improvement Association, Minnesota Horticultural Society, the Minnesota Safety Council and the Minnesota Historical Society.
There also have been some special circumstances in the past when a public entity privatized and existing employees were allowed to stay with the public pension. One example was the conversion of Ramsey County Hospital to Regions Hospital, Martin said.
Last year, the legislature granted access to the state’s pension system for 24 employees of the Minnesota Sports Facility Authority, which is the organization overseeing construction of a new Minnesota Vikings football stadium in Minneapolis.
Richard Kolodziejski, public affairs and communications director for MAPE, said the union made this request in order to have consistency in pension benefits among its employees.
Historically, most MAPE staff members came into the job after being employed in state government — usually from a job represented by MAPE. State law allows people in that situation to take an extended leave of absence from their state employment and continue their pension benefits while employed by MAPE.
However, recently, Kolodziejski said, an increasing number of staff members have come from other backgrounds and they don’t have a state pension. All of the staff members had to sign an agreement saying they were willing to have the five percent contribution taken out of their salaries. Kolodziejski said it took several years before everyone agreed.
“This costs every one of our members money,” Kolodziejski said. “At the same time, we think that people have to take a responsible role for their pension. This is a mandatory way that would require all of our employees to set aside money for their retirement.”
MaryJo Webster can be reached at 651-228-5507. Follow her at twitter.com/mndatamine.