Report: Minn. 'Needs Improvement' Funding State Retirement Plans
Minnesota is short by billions of dollars when it comes to funding those state retirement plans so many depend on. That's the finding of a new report released this week that says Minnesota 'needs improvement.'
Thousands of Minnesotans who've worked in the public sector on road construction, teaching in classrooms, as firefighters or other capacities rely on pensions for retirement funding.
A new report by the "Pew Center" called The Widening Gap shows Minnesota now owes retirees nearly $59 million.
It also shows the state is $13 billion in short setting aside money to pay retirees.
One of Minnesota's leading experts on public employee pensions says he generally agrees with the central theme of the report, in that Minnesota does need to improve how it funds pensions, but he also says no retirees are in danger of losing their retirement money.
Larry Martin, Executive Director of the Legislative Commission on Pensions and Retirement says he would agree that Minnesota needs improvement in the sense that we just came out of the big recession. He says our assets went down considerably.
Overall, states are $1.3 trillion short funding pensions. Eleven are considered "solid performers." Seven, including Minnesota, "need improvement." 32 states have "serious concerns."
Martin says in 2010 the Minnesota legislature increased employee and employer contributions and trimmed future benefit increases.
He says there's no reason that there's any belief that there's going to be imminent default or that pensions will not be ultimately paid. But he says that assumes there isn't another major recession.