Port pensions in question
Pensions for current and former Red Wing Port Authority employees will dissolve next year, unless state legislation is passed to protect them.
Since the port was created in 1985, its employees and the city of Red Wing have contributed to a retirement fund with the Public Employees Retirement Association of Minnesota. But port authorities, with the exception of St. Paul's, are not eligible for PERA under state statute.
The bureaucratic mix up wasn't discovered until last year.
Now, Red Wing is pushing for a new law that would allow its port to continue its pensions with PERA.
The retirement agency, meanwhile, has agreed to allow the Port Authority to continue its participation through 2011, giving Red Wing a crack at a legislative fix.
If the city's attempts fail, PERA will nix the port's pension plans next year.
That would force the city to establish a new pension plan for port employees, said Roger Seymour, Red Wing Employee Service director. PERA would reimburse, with interest, port employees and the city for their contributions.
But establishing a new fund could be an expensive task, Seymour said.
"We don't even know how much it would cost," he said.
A city memorandum said there are 18 current and former port employees with pension plans.
City Council Monday inked a $12,500 contract with the firm Flaherty and Hood to lobby for a new law at the capitol. The majority of council members felt it's necessary to have lobbyists navigate the proposed law through the Legislature.
Council member Peggy Rehder was the lone dissenter.
"I just think $62,000 for lobbying contracts is too high," Rehder said, noting the city also has a $50,000 contract with the firm to lobby nuclear issues.
She told the R-E that she preferred that the PERA lobbying bill be wrapped into that existing contract.
She added that local lawmakers Rep. Tim Kelly and Sen. John Howe have voiced support for the legislation.
Howe, the former mayor, told the R-E Friday he's written a bill.
"I have been working on it a month," he said, adding he's spoken about the proposed law with PERA. "We drafted a bill that the pension fund would support."
The law would not be unprecedented. In 2003, St. Paul ushered a similar exception through the legislature for its port authority.
PERA Executive Director Mary Vanek said it is understandable city officials assumed port employees were eligible for PERA since the agency serves public employees and ports are public agencies. She added that PERA officials aren't sure why the statue, which dates back to the late 1950s, excludes port authorities.