Amid legislative theatrics over tax cuts and construction projects, efforts to bolster Minnesota’s multibillion-dollar government worker pensions quietly fell apart at the end of the session.

The state was expected to approve changes after discovering that government retirees’ exceptionally long lives will cost up to $1.4 billion more than planned in coming decades.

Minnesotans have the highest life expectancy in the continental U.S. — 81.1 years — while the state’s retiring female teachers are projected to live as long as 90. That means many government retirees could be receiving taxpayer-backed pensions for more than 20 years.

Gov. Mark Dayton vetoed a significantly pared-down measure after legislative disputes over how to make up the projected shortfall, delaying any resolution until at least next year.

“There’s no doubt that the failure to act this year is not at all positive,” said Susan Lenczewski, executive director of the bipartisan Legislative Commission on Pension and Retirement.

The rejected legislation also included a small but significant provision to lower the level of investment returns that the teachers’ pension fund projects it will earn each year. Following national concern about public pension plans’ overly optimistic assumptions about how much they can make on Wall Street, legislators voted to drop that figure from 8.5 to 8 percent. Actuaries advising the state have suggested it be dropped as low as 7 percent.

This spring, the Hoover Institution reported that such commonly high assumptions essentially allowed governments to mask the amount of debt they owed workers.

“Even Warren Buffett only assumes a 7 percent return,” said Sen. Eric Pratt, R-Prior Lake. “I don’t think our fund managers are as smart as Buffett.”

Pratt said he was the only member of the Senate to vote against the proposal, saying he wanted to lower the projected returns even further.

States like New Jersey, California and Illinois are grappling with how to shore up massively underfunded government pension plans. Minnesota’s retirement systems are still relatively flush compared to many of their peers.

Laurie Hacking, executive director of the Teachers Retirement Association (TRA), said that waiting until next year to address the problems is manageable. But she cautioned against Minnesota following other states that “wait and wait and wait forever to address their financial problems, and then it becomes extremely costly to solve them.”

The TRA approached legislators with a plan to offset its $1 billion in new projected costs with a mix of solutions. They included increasing the amount that school districts would contribute to teachers’ pensions, reducing cost of living adjustments for retirees and permanently removing mechanisms that would increase those annual increases once the retirement account becomes almost fully funded.

But state officials did not want to set aside extra tax dollars this year for school districts to increase pension contributions.

The Minnesota State Retirement System (MSRS) and other funds came forward with plans of their own.

But a scaled-back version of the legislation Dayton vetoed offered just $81 million in savings — by slightly reducing a cost of living adjustments for one year.

MSRS Executive Director David Bergstrom said the final proposal “had value, but it was nowhere near enough for what we need to get to.”

The governor objected to the proposed legislation, saying it put the financial burden solely on retirees.

“I thought it was unfair,” Dayton said. “It does need to be addressed, and I intend that it will be in the next session.”

Asked if he was concerned about putting off a solution until next year, Dayton noted that the legislative compromise would have only improved the funds by a relatively small amount.

Legislators expressed surprise at Dayton’s veto. Rep. Tim O’Driscoll, the Sartell Republican who is chairman of the pension commission, said the added liabilities were so expensive that they decided to start with a “very minimal chip off the block on this” and address the rest the following year.

Sen. Julie Rosen, R-Vernon Center, said lawmakers had been caught off guard by the pension funds’ problems with calculating retiree mortality and that they had approved a “very good first step.” School districts she represents told her they could not afford higher contributions without state help, saying, “You can’t make us fix this pension problem on the backs of the kids here.”

“To do true reform takes several years,” Rosen added.