Minneapolis officials pleased with pension ruling

Minneapolis city officials are hailing the decision of a Hennepin County judge, who has ruled that Minneapolis police and fire retirement funds overpaid their members and have to recoup nearly $76 million from pensioners and beneficiaries.

It means the city can contribute less money to the two pension funds. But for pensioners, the ruling will likely mean a cut to benefits that are already dwindling.

In 2006, the city of Minneapolis sued the two pension funds -- the Minneapolis Police Relief Association and the Minneapolis Firefighters Relief Association. City leaders complained the fund overpayments were straining city coffers.

Last November, Judge Janet Poston ruled in favor of the city, and ordered the pension associations to correct their calculations going forward. The ruling reduced the city's pension obligation by $10 million a year, beginning this year.

But the ruling left an important question unanswered.

"It was unclear in the original ruling, to us and to others ... how she intended the funds to pay the dollars back to the residents of Minneapolis, to the taxpayers of Minneapolis," said City Council Member Betsy Hodges.

Hodges says between 2000 and 2009, the police fund overpaid its members by nearly $52 million, and the firefighters fund overpaid by $24 million.

This week, Judge Poston answered the city's question by ordering the pension managers to develop a plan to restore the money that was overpaid. Poston gave them about two weeks to mull several options -- including temporarily reducing benefits.

Minnesota Public Radio was unsuccessful in reaching officials from the funds. However, the police relief association's website contains a statement saying the groups will meet later this week to decide their next step.

Some pensioners fear the judge's latest decision will be devastating. Retired police officer Mike Quinn says his benefits have already been cut by more than $400 a month.

"It may not seem like a lot of money, but that's a substantial amount of money for somebody living on a retirement check that still isn't old enough to collect Social Security or any other benefits," he said.

Quinn, 61, says he's a little better off than some of his fellow retirees. He finished his 23 years on the police force without a debilitating injury, so he can still work if he has to.

"But there's a lot of people out there that don't have that option," said Quinn. "They devoted a lot of time and a lot of parts of their lives to the city. And I think it's grossly unfair on a lot of levels."

Quinn says he would like to see the police relief association appeal the judge's decision and seek an injunction against any further benefit cuts.

In the meantime, Minneapolis city officials are also celebrating a remedy to another of the city's pension fund problems.

Recently, the state Legislature approved a measure to bring a city employee fund under the state's larger public employees retirement plan.