AFSCME is reluctantly supporting benefit adjustments recommended by MSRS and PERA to ensure the retirement systems have sufficient funds to pay benefits for retirees, active employees and future hires. Legislative action would allow both systems to reduce the cost of living increase. Our Board originally asked the Legislature to wait until next year to take action. We had hoped that investment returns would be enough to make up for market losses over the past two years. Unfortunately, the slow economic recovery demands an immediate fix.

By taking responsible actions to stabilize the pension funds, we’ve protected a defined benefit pension that allows us to retire with dignity. That pension is a binding contact between workers and their employer. We will fight any effort to replace our defined benefits with a defined contribution plan.

Here are some facts to share about our pensions:

• Public pensions are modest. The average AFSCME retiree has pension benefits of about $13,000 a year.
• Minnesota’s pension systems pay out more than $2.5 billion, add $3.3 billion to the state economy, and create 22,500 additional jobs.
• State and local taxes collected on our pensions exceed public employer pension contributions by $80 million a year.
• 90% of retired public workers stay in Minnesota. That benefits our economy and keeps seniors self-sufficient.
• More than 20% of senior citizens are living in poverty with only Social Security.
• Minnesota taxpayers pay for only 15 cents of every dollar in public pension benefits.
• Most private pensions are 100% employer paid. Our members pay for half of theirs.
• Defined benefit focuses on how much is paid to the retired worker.
  Defined contribution focuses on how much goes into the plan.
• Defined benefit plans cost half of what defined contribution plans cost to deliver the same benefit due to superior investment management and pooling of longevity risk.

Source: Retirement Systems of Minnesota, “Measuring the Economic Benefits”