Merger ends Minneapolis pension feud

  • Article by: STEVE BRANDT , Star Tribune
  • Updated: December 30, 2011 - 8:33 PM

Two century-old Minneapolis police and firefighter retirement funds are no more, as is a longstanding legal dispute over their fate.

More than a century of tradition and almost a decade of conflict ended Friday as a judge's signature on a pension lawsuit settlement resolved the last snarl between the city of Minneapolis and its police and fire pension funds.

The two pension funds that have been closed to new members for 31 years also merged Friday into a statewide public safety pension plan. They're the last of four closed city pension plans that have merged into state funds in the past six years.

The latest mergers are significant for Minneapolis taxpayers and motorists because they kept the city's property levy from increasing in 2012, while creating enough savings for Mayor R.T. Rybak to launch a five-year $45 million paving program.

They're significant for pensioners because for the first time in more than five years of fighting the city's legal claim that they were overpaid, they don't have to worry about refunding part of their past pensions and know they'll get a major increase in benefits.

The deal also eliminates some personal strife. In 2009, during the height of bitter feelings aroused by a judge's order that pension checks be shrunk, police widow Rita Johnson showed up at a pensioner protest in the City Council chamber carrying a sign proclaiming, "Shame on you, Barb." The target was her sister-in-law, Council President Barbara Johnson.

The elected Johnson wasn't exactly insensitive to pension issues. She grew up in a family supported by a widow's pension after her firefighter father died of lung cancer after being overcome by smoke three times.

The settlement, signed by Hennepin County District Judge Janet Poston, means that the city won't pursue the recovery of benefits, and the two pension associations won't seek pension increases and one-time payments their members would have been entitled to.

The merger brings an end to a Minneapolis Firefighters Relief Association and the Minneapolis Police Relief Association. Firefighters won their first service pension of $40 a month in 1897, but a mechanism to raise money for disabled firefighters dates to 1868. The police fund began in 1890.

But by early 2010, pension fund board members could see the high cost of fighting the city's lawsuit and keeping their septuagenarian and octagenarian pensioners in uncertainty, according to their lawyer-lobbyist Brian Rice. Merger was a high priority for the city because it allowed the city more time to make payments on its unfunded pension liabilities, which would jump by $17 million in 2012.

The pension merger was approved by lawmakers last summer.

Steve Brandt • 612-673-4438

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