Currently, under Minnesota Statutes, Section 353.64, Subdivision 7a, full-time peace officers employed by the Metropolitan Council are covered by the Public Employees Police and Fire Plan (PERA-P&F), administered by the Public Employees Retirement Association (PERA). Coverage for full-time Metropolitan Council transit police was effective July 1, 1993. Part-time Metropolitan Council transit police officers are currently excluded from PERA-P&F coverage.

Although the question of appropriate pension coverage for various groups of public employees is usually deliberated over and set by the Legislative Commission on Pensions and Retirement, the question of the appropriate pension coverage for the Metropolitan Council transit police officers has not been fully or carefully deliberated by the Commission and the question has been resolved largely by the Metropolitan Council or by other legislative committees. Before 1993, the pension coverage question for Metropolitan Council transit police was set by the Metropolitan Council and local government committees in legislation relating to the Metropolitan Council, with Metropolitan Council transit police comprised of off-duty municipal police officers and Metropolitan Council transit police service excluded from pension coverage. The 1993 legislation on the question was the result of a Senate (Senator LeRoy Stumpf) author’s floor amendment to that year’s omnibus pension bill that was eventually accepted by the 1993 pension conference committee.

Amendment SCS2984A-5 reverses the 1993 legislation (Laws 1993, Chapter 307, Article 1, Section 4, and Article 4, Section 33) that excluded part-time Metropolitan Council transit police officers from coverage by the Public Employees Police and Fire Plan (PERA-P&F) and includes these part-time transit police officers in PERA-P&F coverage. Full-time transit police officers have had PERA-P&F coverage since 1993.

The amendment raises various pension and related public policy issues, as follows:

1. Appropriateness of Pension Coverage for Part-Time Metropolitan Council Police Officers. The policy issue is the appropriateness of providing pension coverage for part-time police officers employed by the Metropolitan Council. The Metropolitan Council employs both full-time and part-time police officers, primarily or wholly to police its transit operations. The Metropolitan Council full-time police officers have been PERA-P&F members since 1993. The Metropolitan Council part-time police officers are police officers who otherwise serve full-time for metropolitan municipalities or for the State Patrol and, as second jobs, are additionally employed by the Metropolitan Council to police its transit operations. Because these police officers are already full-time municipal police officers, they already have retirement coverage by a Minnesota public pension plan, most typically PERA-P&F. Since these police officers currently have full-time pension coverage, the extension of pension coverage to this part-time transit police service may not be necessary. The coverage will principally benefit those part-time Metropolitan Council police officers who are approaching retirement, since the proposed retirement plan coverage extension will only serve to increase the police officer’s highest five successive years average salary, because their allowable service credit is limited to one year for any 12-month period, but their credited salary is not limited. The proposal would level the employment circumstance for the Metropolitan Council with the police officer’s regular full-time employer, since service with the Metropolitan Council will bring much of the same pension advantage as overtime service by a regular employee. However, pension enrichment through this additional service, which can be monitored and regulated by the regular employing municipality, is not likely to be controlled by the Metropolitan Council in this dual employment setting. The proposed legislation will allow municipal police officers who are approaching retirement and who are employed or become employed by the Metropolitan Council to potentially pad their covered salaries and, consequently, their pensions during the end of their career, which has been viewed by past Commission members as an actual or potential pension abuse. The coverage of part-time Metropolitan Council police officers also will benefit younger or shorter-service police officers in the event that they become disabled while serving as a Metropolitan Council police officer. PERA-P&F provides on-duty disability benefits with any service, with a minimum benefit as if the officer had 20 years of service, but requires a one-year of service vesting period for non-duty disability benefit and does not have a minimum non-duty disability benefit. Extending PERA-P&F coverage to part-time Metropolitan Council police officers would improve the potential disability benefits by shifting part-time Metropolitan Council police officer disabilities from non-duty disabilities to on-duty disabilities. Police officers who currently work part-time in non-governmental security positions have the same disability coverage situation as do part-time Metropolitan Council police officers currently.

2. Economic Impact on the Metropolitan Council. The policy issue is the economic impact of this proposed pension coverage change on the Metropolitan Council and its affordability. The PERA-P&F employer contribution to be borne by the Metropolitan Council is 9.3 percent of covered pay for these part-time police officers. Currently, the Metropolitan Council does not pay a PERA-P&F contribution for these part-time police officers, so the addition of a PERA-P&F employer contribution is largely or wholly a new cost item, depending on whether or not the Metropolitan Council is required by federal law to make Social Security employer contributions for these part-time police officers. In 2000, there were 118 part-time Metro Transit police officers, drawn from 33 other police agencies. In 2001, there were 151 part-time Metro Transit police officers, drawn from the Metropolitan Council full-time police force and 39 other police agencies. The largest numbers of part-time police officers are from the Minneapolis Police Department (22 officers in 2000 and 36 officers in 2001), the St. Paul Police Department (13 officers in 2000 and none in 2001), the New Hope Police Department (10 officers in 2000 and 12 officers in 2001), and the State Patrol (10 officers in 2000 and 13 officers in 2001). Since this likely will be a new cost to the Metropolitan Council, it should be asked about what advantages it will receive in return for this additional cost. The proposal for part-time transit police pension coverage apparently is being pursued by representatives of the part-time police officers, with subsequent support by Council administrators. The only argument previously made by the Metropolitan Council is that the PERA-P&F coverage for part-time police officers will provide an additional incentive for transit police officers to work additional shifts at a time when the demands for policing the public transit system are increasing. The Metropolitan Council indicates that the proposed legislation will cost $48,000 annually (a $145,000 additional employer contribution to PERA-P&F offset by the elimination of the current $97,000 Social Security employer contribution for part-time police officers).

3. Appropriateness in Light of Alternative Means of Recruiting Additional Part-Time Police Officers. The policy issue is the appropriateness of the proposed PERA-P&F coverage for part-time transit police officers when there are other mechanisms for recruiting additional part-time police officers from municipalities to perform transit policing duties or for inducing existing part-time transit police officers to work additional shifts. The proposed extension of PERA-P&F pension coverage is arguably of greatest interest to police officers within five years (i.e., establishing their highest five years average salary) of retirement, typically between the ages 45 and 55. The proposed PERA-P&F coverage extension is presumably of lesser interest to younger (i.e., under age 45) police officers, who typically can be expected to value take-home pay over nominal additional pension coverage, since coverage for the part-time service as a police officer for a person who is already employed as a full-time municipal police officer principally only gains the person additional salary credit during the five years preceding retirement while the extra coverage will bring principally additional retirement contributions before that time. If the Metropolitan Council transit operations value the services of part-time police officers who are approaching retirement age rather than part-time police officers who are younger and potentially more vigorous, then the proposal would make good personnel policy sense. However, if a broader mix of part-time police officer ages and experiences are desired by the Metropolitan Council transit operations, providing a competitive part-time direct compensation package may be more effective than this proposal and will not require this legislation.

4. Potential Need for Prior Salary Credit Purchase Authorization. The policy issue is the potential that there will be a demand for the purchase of prior salary credit in PERA-P&F by some part-time Metropolitan Council police officers and the need to fashion a legislative response to that demand. Part-time Metropolitan Council police officers who are within five years of their expected retirement date may wish to enhance their ultimate PERA-P&F pension benefits by obtaining PERA-P&F salary credit for any part-time police service and salary that they rendered before July 1, 2002. Addressing this issue now and in general will avoid the likely demand for the Legislature to revisit this issue in one year or within a few years, when particular current part-time transit police officers reach retirement age, and to revisit this issue on an individual-by-individual basis.

5. Lack of a Specified Effective Date. Amendment SCS2984A-5 does not indicate a specific effective date, making the provision effective August 1, 2002, under Minnesota Statutes, Section 645.02. The comparable provision added to H.F. 3127 (Mares) specified that the coverage change was effective July 1, 2002, and applies to salaries earned by part-time Metropolitan Council police officers after June 30, 2002. The Metropolitan Council, PERA, or both have a potential interest in clarifying this issue for reporting, record keeping, and budgeting reasons. Amendment LCPR02-080, drawn to SCS2984A-5, would add an effective date identical to that added to H.F. 3127 (Mares).