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2014_1208_CCpacket
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Attachment A <br />plan administration to the Public Employees Retirement Association (PERA) and, in either event, clarifies <br />the disposition of plan assets as an asset of the Roseville city treasury upon the payment of the last <br />annuity or benefit payment from the relief association. <br />If introduced during the 2015 Legislative Session and heard by the Legislative Commission on Pensions <br />and Retirement, the potential proposed legislation would likely raise several pension and related public <br />policy issues for consideration and potential discussion between members of the Commission, as follows: <br />1.Likelihood of Local Legislation Approval by City of Roseville. The policy issue is the extent of <br />interest in the potential local legislation by the Roseville mayor, city council, and city administrator <br />and the likelihood that the potential local legislation, if enacted by the Legislature, would be approved <br />by the city. If the City of Roseville does not support the proposed resolution of the administration and <br />governance problem of the Roseville Volunteer Firefighters' Relief Association, the potential <br />proposed local legislation may not be approved locally and consideration of the potential proposed <br />legislation would not be a good expenditure of valuable legislative time and effort by the Commission <br />and subsequent standing committees with pension policy jurisdiction. The City of Roseville has <br />publicly supported efforts by the Roseville Volunteer Firefighters' Relief Association to seek a <br />legislative remedy to its administration and governance issue, but the city has not yet had an <br />opportunity to review the potential proposed legislation. A city council resolution of support of the <br />potential proposed legislation in time for the Commission hearing on any Roseville Volunteer <br />Firefighters' Relief Association bill would resolve this issue. <br />2.Support for the Potential Proposed Resolution by the Roseville Volunteer Firefighters' Relief <br />Association. The policy issue is whether or not the current board of trustees of the Roseville <br />Volunteer Firefighters' Relief Association is supportive of the potential proposed resolution of the <br />relief association's administration and governance issue. Under the potential proposed legislation, <br />depending on the near-term composition of the active member portion of the relief association, at least <br />one current active member representative on the relief association board of trustees would be replaced <br />by a retired member by operation of the new law in a special election. If most or all of the current <br />active membership of the relief association have their city employment status changed and have their <br />retirement coverage changed from the Roseville Volunteer Firefighters' Relief Association to a plan <br />run by PERA in short order, the number of board members to be replaced in short order before their <br />terms of office have fully run would be greater. Two members of the current Roseville Volunteer <br />Firefighters' Relief Association board have indicated their support for the proposed resolution and <br />have expressed their opinion that the balance of the relief association board would be supportive, but <br />the resolution of this governance and administration issue has been more conceptual than document- <br />driven up to this time. If there is opposition on the Roseville Volunteer Firefighters' Relief <br />Association board to the proposed administration and governance issue resolution, that controversy <br />should be resolved in Roseville rather than in St. Paul during the legislative session. <br />3.Short-Term and Long-Term Relief Association Phase-Out Issues. The policy issue is whether or not <br />the potential proposed legislation adequately addresses the Roseville Volunteer Firefighters' Relief <br />Association administration and governance issue for both the short term and for the long term. <br />Previously, when Minnesota public pension plans have been placed on a phase-out basis by closure of <br />the membership to new entrants, the closure was done by legislation. The Roseville Volunteer <br />Firefighters' Relief Association closure apparently was accomplished by city action only and the <br />question of the future administration and governance of the Roseville Volunteer Firefighters' Relief <br />Association does not appear to have been addressed. The systematic replacement of active relief <br />association board members by retired members as the phase-out proceeds that was initially proposed <br />by the relief association members will solve the immediate problem of the governance of the relief <br />association, but some additional option for the time when loss of interest, significant change in <br />residence location, or diminished capability in the pool of retired members over time needs to be <br />provided. Current law, Minnesota Statutes, Section 424A.015, Subdivision 3, provides one avenue for <br />a replacement administration structure, by allowing the relief association to purchase annuity contracts <br />from an insurance company licensed to do business in Minnesota to replace the current benefits of <br />retirees that are currently self-insured by the relief association, which if implemented en masse, would <br />substitute the insurance carrier for the current relief association officers. The potential proposed <br />legislation adds, as an option, an additional avenue by permitting a transfer of the administration of <br />the former relief association to the statewide local government employee retirement system, the Public <br />Employees Retirement Association (PERA), with the PERA board and executive director replacing <br />the current relief association structure. The PERA transfer would require city approval before <br />finalization, but could be exercised either in the near term or in the longer term based on the judgment <br />of the Roseville Volunteer Firefighters' Relief Association board of trustees. The potential proposed <br />legislation, building on the current annuitization statutory authority provides options for the proper <br />management of the affairs of the relief association without disruption unless the relief association <br />board is not vigilant in monitoring the quality and capability of its members. <br />LCPR14-052 Memo.docx Page 2 <br /> <br />
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