Public Pensions Champion is Retiring

Dave Bergstrom, the executive director of the Minnesota State Retirement System, smiles as more than 700 AFSCME members applaud him at the Council 5 Annual Convention. He’s retiring after more than three decades of working to ensure decent retirements for many public workers.
Dave Bergstrom, the executive director of the Minnesota State Retirement System, smiles as more than 700 AFSCME members applaud him at the Council 5 Annual Convention. He’s retiring after more than three decades of working to ensure decent retirements for many public workers.

A state official who has worked to keep public workers’ pensions strong and stable for more than 30 years is retiring.

Dave Bergstrom, executive director of the Minnesota State Retirement System, is stepping down in December. He’ll be replaced by Erin Leonard, assistant executive director.

“I definitely have mixed emotions leaving,” Bergstrom says. “I’m excited about new opportunities, but by the same token, I’m leaving something I truly have loved to do. I can count on one hand how many days I didn’t want to come to work. I love the people I work with here. I love the relationships we have with AFSCME and all the unions and retirees. It’s been a great gig.”

Under Bergstrom’s direction, MSRS administers retirement plans that provide benefits to workers employed by the state of Minnesota, the Metropolitan Council and many non-faculty workers at the University of Minnesota and MnSCU. It pays monthly benefits to more than 32,000 people.

MSRS also runs the Minnesota Deferred Compensation Plan, which lets public employees save for their retirement, and the Health Care Savings Plan, a tax-free medical savings account.

Bergstrom says he’s enjoyed having so much variety in his work each day, and the strategy involved in the legislative process.

“What I’ve truly loved was working with the members. I talk about money and billions of dollars, but ultimately, it’s the person who’s getting $1,200 a month, that’s the cool part of the job. We make a difference in their lives. We provide survivor benefits, benefits during bad times, if someone is disabled. Knowing people can retire with a comfortable, respectable retirement is very rewarding.”

Dave Bergstrom leads a class on retirement benefits at the AFSCME Convention. Even though he heads MSRS, he's made a point of attending meetings and holding workshops like this to stay in touch with workers, his favorite part of the job..
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Bergstrom started out in the retirement business nearly by chance: He’s a true example of on-the-job training. He had worked as a teacher and managed a meat market. When he got laid off, he got a job working with PERA, the Public Employees Retirement Association of Minnesota. A few months later, he was offered the job of legislative representative.

 “I am truly somebody that has made sausage and legislation,” he jokes. Bergstrom also communicated benefits to members and supervised the benefits department before becoming head of MSRS in 1992.

“It was pretty much just luck, to be honest, that the pieces of my career all just kind of pulled together,” he says with characteristic humility.

During his tenure, Bergstrom steered MSRS through some challenging times, including the dot-com bubble and the Great Recession. To make sure the pension plans survived the downturn, the agency asked employers and employees to kick in a bit more, and retirees to take home a bit less.

 “It’s not always popular with members and retirees, but ultimately we need to have enough money to pay people,” Bergstrom says. “We can promise them everything, but if we can’t provide them money, it’s a hollow promise.”

Under his oversight, the General Plan is recovering nicely, with funding levels back up to nearly 89 percent by July 2015.

 “I’m very proud MSRS is one of the best-funded plans in the country and one of the least expensive,” Bergstrom says. “Our board was very proactive, and the unions were very supportive to react quickly.”

His other big achievements include adopting a new model for the Deferred Compensation Plan that brought plan management in-house and resulted in lower fees; and creating the Health Care Savings Plan.

“I’m very proud of the agency we have become, from the ability to reach out to our members and to provide the customer service they deserve. It’s not that we’re 100 percent perfect, but that we’re an accessible, friendly agency, and that’s a big deal to me,” he says.

Bergstrom sees challenges ahead for public pension systems like MSRS. Life expectancy keeps going up, as does political pressure to get rid of pensions and replace them with defined-contribution plans like 401 (k) plans.

“What happened in the private sector is happening across the states,” he says. “That pressure will only continue to grow. It’s going to be a tough one to continue to fend off. That’s a huge challenge that will have to be faced.”

Bergstrom says it’s a little frightening to him that most companies don’t offer private pensions anymore, and many people aren’t prepared for retirement.

“Many people are going to have to work until they’re 70, 75 and the body might not be able,” he says. “The country is going to have to deal with some retirement issues that will be costly.”

He has hope for MSRS, though, and its future under Erin Leonard’s leadership. He expects the strong relationship with AFSCME and other unions, which Leonard played a role in creating, will continue.

Along with making sure the plans are well-funded, Bergstrom hopes the market recovers to the point where the retirement system can increase the cost-of-living adjustment and decrease contributions.

He doesn’t have firm plans for his own retirement, other than a short stay in Florida, to work on his cabin and spend time with family. He figures he’ll volunteer or get a part-time job.

“I’m going to retire but I’m not going to be done,” Bergstrom says. “I don’t want to work as many hours, I don’t want the stress, but I still want to be a productive person. Society is going to have to figure out ways to help retirees make a second or third or fourth career out of this.

“I just hope to enjoy the simpler things in life and take some time to slow down, take time to eat breakfast and asleep past 5:30.”