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It isn’t surprising that Rep. Phyllis Kahn would sponsor a bill that will allow MnSCU retirees to continue double dipping. Here’s the key provision in HF0870:

Subd. 4. Exemption limit. For a person eligible under this section who earns more than $46,000 is employed in excess of two-thirds of a full-time basis in a calendar year
from through reemployment in the Minnesota State Colleges and Universities system following retirement, the annuity reduction provisions of section 352.115, subdivision 10, apply only to income
over $46,000for employment in excess of two-thirds of a full-time basis.

I’m betting most Minnesotans don’t know that MnSCU faculty and administrators are eligible for early retirement and are able to collect their pensions. I’m confident few Minnesotans would knkow that these administrators and faculty are then are able to be rehired as consultants within MnSCU while still collecting their defined benefit pensions.

In other words, an administrator who retired at age 55 could start collecting their defined benefit pension essentially immediately. BONUS QUESTION: How many Minnesotans can retire early these days? BONUS QUESTION 2: How many Minnesotans working in the private sector have a defined benefit pension plan? The answer to the first question is ‘perhaps 1%’. The answer to the second question is none.

Only public employee union members fit into both categories. I’ll be clear about this important point. Not all members of PEUs have defined benefit pension plans. That said, only members of PEUs have defined benefit plans. That means, in a sense, PEUs are part of a different 1%.

Here’s the kicker. People who are hired for less than one-third of full-time basis but less than a two-third full-time basis won’t have any mony deducted from their pension:

354.445 NO ANNUITY REDUCTION.
2.6(a) The annuity reduction provisions of section 354.44, subdivision 5, do not apply
2.7to a person who:
2.8(1) retires from the Minnesota State Colleges and Universities system with at least
2.9ten years of combined service credit in a system under the jurisdiction of the Board of
2.10Trustees of the Minnesota State Colleges and Universities;
2.11(2) was employed on a full-time basis immediately preceding retirement as a faculty
2.12member or as an unclassified administrator in that system;
2.13(3) begins drawing an annuity from the teachers retirement association; and
2.14(4) returns to work on not less than a one-third time basis and not more than a
2.15two-thirds time basis in the system from which the person retired under an agreement in
2.16which the person may not
earn a salary of more than $46,000be employed for more
2.17than two-thirds of a full-time basis in a calendar year
fromthrough employment after
2.18retirement in the system from which the person retired.
2.19(b) Initial participation, the amount of time worked, and the duration of participation
2.20under this section must be mutually agreed upon by the president of the institution where
2.21the person returns to work and the employee. The president may require up to one-year
2.22notice of intent to participate in the program as a condition of participation under this
2.23section. The president shall determine the time of year the employee shall work. The
2.24employer or the president may not require a person to waive any rights under a collective
2.25bargaining agreement as a condition of participation under this section.
2.26(c) Notwithstanding any law to the contrary, a person eligible under paragraphs (a)
2.27and (b) may not, based on employment to which the waiver in this section applies, earn
2.28further service credit in a Minnesota public defined benefit plan and is not eligible to
2.29participate in a Minnesota public defined contribution plan, other than a volunteer fire plan
2.30governed by chapter 424A. No employer or employee contribution to any of these plans
2.31may be made on behalf of such a person.
2.32(d) For a person eligible under paragraphs (a) and (b) who
earns more than $46,0002.33 is employed in excess of two-thirds of a full-time basis in a calendar year
fromthrough
2.34 employment after retirement due to employment by the Minnesota state colleges and
3.1universities system, the annuity reduction provisions of section 354.44, subdivision 5, apply
3.2only to income over $46,000 for employment in excess of two-thirds of a full-time basis.
3.3(e) A person who returns to work under this section is a member of the appropriate
3.4bargaining unit and is covered by the appropriate collective bargaining contract. Except
3.5as provided in this section, the person’s coverage is subject to any part of the contract
3.6limiting rights of part-time employees.

This isn’t justifiable. MnSCU employees who retire early shouldn’t be able to get paid for consulting while collecting their pension. What’s just is to give MnSCU employees the choice of working until they’re 65, the normal private sector retirement age, or they’re allowed to retire early but not collect their pension until they’re 65. That way, the legislature won’t have to worry about writing legislation like this. More importantly, taxpayers won’t get ripped off like what’s happening now.

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One Response to “Phyllis Kahn authors pension double-dipping legislation”

  • MinnetonkaMoose says:

    On the bright side, MnSCU can avoid the 7% pension match and the health insurance on these retired employees so they may actually be saving the system money overall!

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