The board of the closed Minneapolis police pension fund voted unanimously Thursday to tell the city that it's not ready to agree to a proposed merger with a statewide pension fund.
Police balking at Minneapolis pension fund merger
Minneapolis pensioners press for better deal in merger with state fund; Mayor R.T. Rybak says increase would hurt property taxpayers.
By STEVE BRANDT, Star Tribune
Instead, the board voted to try to negotiate a better deal with the city, according to fund president Larry Ward. He said that as many as 50 members attended the board meeting and indicated that they don't believe terms of the proposed merger are sufficient.
"We believe there's some wiggle room. We feel we're close with the city," Ward said.
He added that pensioners were upset with Mayor R.T. Rybak's claim of a big victory in a Minnesota Court of Appeals ruling Tuesday. Pension fund attorneys said they believed the fund came out far ahead of the city in the ruling. It came in a lawsuit over the proper salary base on which to figure police and fire pensions.
"That infuriated a lot of our people," Ward said, referring to Rybak's claim. But he said that members and the board likely would have pushed for additional negotiations anyway. They want a higher salary base for the proposed deal, which has yet to be approved by the Legislature.
"If they're infuriated," Rybak responded, "you should hear the property taxpayers who are outraged at what they have to pay."
The original deal would have boosted the salary on which pensions are calculated by more than 40 percent by 2015 to $64,000. Police pensioners seek that increase to offset the effects of an earlier court ruling that stripped some salary items from the pension base, and to offset a less-generous cost-of-living increase they'd receive under the statewide pension. That base increase also has drawn criticism from some members of the general public.
The pension board's stance reverses a recommendation for merger approved 5-2 by one of its committees. "We're finally getting a barometer of feelings from our members," Ward said of the meeting turnout.
Rybak said the pensioners won't get a better deal and that the city's incentive to stick with the merger plan would diminish if it is forced to absorb -- and pass on to property taxpayers -- a huge increase in pension costs.
"We went as far as we could and beyond," Rybak said.
Ward said that the appeals court ruling probably intensified the desire of members to seek a better deal. He added that he thinks that would have been their sentiment anyway. He said the fund still hopes to agree on a new deal in time for a likely special legislative session to resolve state budget issues.
The merger didn't get approved in the regular session because the deal wasn't struck until days before adjournment.
Ward said that the fund will take more time before considering whether to seek Minnesota Supreme Court review of the appeals decision.
City Attorney Susan Segal said she's confident that the latest ruling sets a precedent and will allow the city to prevail during a trial in its arguments over how pensions should be calculated.
Steve Brandt • 612-673-4438
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STEVE BRANDT, Star Tribune
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