Baloney Busting

On Pensions

Dear Neighbor,

I’m proud that I’m the only candidate in the DFL primary election for State Senate on Tuesday, December 6th, that has taken on big special interests and won. So it’s no surprise that those special interests are now supporting my opponent.

Let me tell you how we took money out of the hands of special interests and put it back into the pockets of taxpayers and retirees, where it belonged in the first place.

Most employees of the City of Minneapolis – including me – are part of the state pension system. It is professionally and responsibly managed for the benefit of present and future retirees. The taxpayers are protected too, because the system uses best practices for pension management.

But for 30 years, some City employees – especially retired police officers and firefighters, and their spouses – were kept out of the state system. They were stuck in closed plans that had not added any new members since 1980.

This broken system was a disaster – both for the retirees and for City taxpayers.

The retirees’ benefits were significantly smaller than those of retirees in other cities who retired from similar jobs. And City taxpayers paid huge property-tax increases for skyrocketing pension costs, for years.

So if this broken system didn’t work for retirees or taxpayers, why did it last for 30 years?

Because it worked for one special interest: the middlemen who ran the funds. And the middlemen made lots of money.

How much money? Here’s an example. In 2009, the administrative cost per retiree in the state retirement system was just $27. But in the closed police retirement fund, the administrative cost per retiree was $968. And in the closed firefighter retirement fund, it was $1,970.

That money went to the fund managers, lawyers and lobbyists who ran the funds. And that money helped buy a lot of political power at the State Capitol.

As a result, some people were afraid to take them on. But we did. We stood up to the middlemen – and won.

Because of years of work by me and a team of City Council members and staff, this broken system has finally been fixed. On December 31, the two closed police and fire retirement funds, the last closed funds of their kind, will merge into the state system.

This merger helps everyone:

Police and fire retirees will get benefit increases that will finally put them in line with retirees from similar jobs. These increases will help them live with the dignity they deserve.

For City property taxpayers, we prevented a $20 million tax increase in 2012 alone. We will have no tax increase caused by pensions – for the first time in years. Holding the line on property taxes helps people stay in their homes, since property taxes are not based on ability to pay.

This is a historic agreement and it’s broadly supported:

  • The City Council voted for it 13-0
  • The Police retirees voted for it over 90 %
  • The Fire retirees voted for it 98 %

Everybody wins – except the middlemen who don’t get to profit off taxpayers and retirees anymore.

As a result, they are strongly opposing my campaign and supporting one of my opponents. Don’t be surprised if you hear them attack me in the last few days before the DFL primary on Tuesday, December 6th.

The cynics say big money always wins. They say nothing ever changes in Government, nothing gets fixed. It’s not true. We proved that when people are willing to take on special interests, we can make a big difference.

But our work isn’t done. This isn’t the only place where middlemen profit off of a broken system. For example, we need to take the same approach to reforming health care.

As your State Senator, I will always stand up to the middlemen and the special interests. Don’t expect anything less.

Peter

VOTE Tuesday, December 6th

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