Revised Minneapolis Fire and Police Pension Funds Gets Legislative OK

Part of the omnibus pension fund bill passed in the special session of the state legislature earlier this week ended a five year legal battle regarding the retirement pension funds for Minneapolis police officers and firefighters. 

“I’m extremely happy with the outcome,” said State Sen. Scott Dibble (DFL - Minneapolis), the bill's chief author. “There are two good outcomes to the new legislation.”

It is hoped the bill will give significant property tax relief to residents of Minneapolis. An oversight mechanism is intended to protect beneficiaries of the fund who before had been subject to greater volatility inn the funds investments.

The new structure is projected to save at least $21 million in property tax relief next year and continual savings in the years ahead. 

The funds will now merge with statewide funds at the end of 2011.

The two funds were closed to new hires in the police and fire departments in the mid-1980s. Those hired since then have their own separate funds.

When the funds in question would lose value, the City of Minneapolis when have to turn to property taxes to make up for those loses.

The new system reduces the amount the city has to pay into the funds and lengthen the time required if there needs to be payments for any shortfalls. The State of Minnesota will not pay for shortfalls in the new arrangement.

The boards of both funds, the board of the state fund and the Minneapolis City Council still must approve the new plan.