Capitol View®

Legislature drops county commissioner’s pension switch

A Hennepin County Commissioner has failed in his bid to convince the Minnesota Legislature to allow him to switch from a 401(k)-style pension to a guaranteed benefit plan.

A House/Senate conference committee tasked with negotiating differences on a pension bill removed the provision today that would have allowed Hennepin County Commissioner Randy Johnson to transfer $615,000 from his 401(k) to buy into the traditional public pension. Johnson, 67, is the longest serving commissioner on Hennepin county's board.

Sen. Sandy Pappas, DFL-St. Paul, joined Gov. Mark Dayton and the state's pension board as they raised concerns that the move would create a bad precedent.

"It will really open the door to other elected officials asking to also transfer from the defined contribution plan to the defined benefit plan,” Pappas said. “That could affect a great number of people, I think. If we’re going to make that decision we should make it for all elected officials."

In a statement, Dayton told MPR News earlier this week that allowing Johnson’s provision would “seriously undermine the integrity of the public pension system."

Johnson and other supporters said the Legislature has allowed others to buy into the defined benefit pension in the past.

But Mary Most Vanek, executive director of the Public Employees Retirement Association of Minnesota, said the Legislature has allowed workers to buy additional years of service if a mistake was made by the employee or the employer. But she said the Legislature has never allowed a person to buy into the traditional pension after electing to opt out of it. Johnson opted out of the pension twice during his career.

Vanek also said an analysis found the county commissioner would receive about $1,500 a month more in benefits if he joined the public pension than if he bought a private annuity.

Johnson told lawmakers today that he wished he would have paid greater attention to what the Legislature was doing during the past thirty years. He also acknowledged that he didn’t have the support of the committee.

“I can also count votes and we have a system where the Legislature has worked hard to stick hard to those pension principles,” Johnson said. “But it’s also a system where the executive branch has the prerogatives and those prerogatives have been exercised.”