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Minnesota Legislature

Legislative Commission on Pensions and Retirement

Request for Proposal for the Provision of Actuarial Services


LCPR News

2019 Special Session Pension & Retirement Bill - Signed by the Governor 5/30


Minnesota News

Credit Rating Agencies Praise Omnibus Retirement Bill

Good news! Credit rating agencies Standard & Poor's and Fitch announced on July 24, 2019, that they are affirming Minnesota's AAA credit rating, the highest rating awarded by the analysts. The 12-page S&P report devotes an entire page to praise of the 2018 Omnibus Retirement Act, noting (S&P report, page 10):

"Notably, Minnesota has a history of making modest changes to its pension plans every few years through an omnibus retirement bill. Both the house and the senate passed the 2018 Omnibus Retirement Bill unanimously, indicating strong bipartisan support for improving the plans. The 2018 Bill allows that in the future, assumptions for payroll growth, salary increases, and mortality tables can be adjusted by updates to the...(LCPR) Standards for Actuarial Work. This should provide for some greater flexibility to adjust assumptions as appropriate to remain in line with the plan demographics, which we view as a positive for transparency and accuracy of reporting."

Both reports expressed concern that contribution rates are fixed in statute, rather than tied to the actuarially determined contribution (ADC) level. As a result, contributions have "consistently been below the actuarial levels," a "comparative credit weakness" (Fitch report, page 4).

Moody's issued its report on the State on July 25, 2019, giving the State its second highest rating (Aa1). Moody's echoed the concerns about our statutorily fixed contribution rates, stating: "In fiscal 2018, the state's pension contributions were about 70.4% of our "tread water" benchmark... This gap, which is among the largest in the state sector, exposes the state to the potential of a growing liability" (Moody's Report, page 6).

Minnesota News, continued

Investment of public pension funds by the State Board of Investment in tobacco companies and companies seeking regulatory approvals from state agencies are the focus of two recent articles in the StarTribune:

  • State of Minnesota has $297 million invested in tobacco firms. (8/4/2019) Two decades ago, Minnesota reached a landmark settlement with the industry and dumped much of its stock. But divestment is complicated. Read more...
  • State investments include controversial copper-nickel mining companies. (8/1/2019) Fund invests in companies behind two controversial mining proposals in Minn. Read more...

National News

New Website for Nationwide Public Pension Plan Data

The Center for Retirement Research (CRR) at Boston College has just made available a newly updated "Public Plans Data" website. The website is a collaboration of the CRR, the Center for State and Local Government Excellence, and the National Association of State Retirement Administrators (NASRA).

This is a treasure trove of data on public pension plans and makes it easy to compare our public pension plans in Minnesota to other states' plans. Probably because some of the data dates back to 2014, the data for Minnesota still reports the Duluth Teachers Retirement Fund Association and the Minneapolis Employees Retirement Fund as if they are still separate plans, which they are not. Have a look: publicpensionplansdata.org

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