In the News! By Rick Baert, Pensions&Investments| May 27, 2014
The $210 million Duluth Teachers’ Retirement Fund Association (DTRFA) could be merged into the $18 billion Minnesota Teachers Retirement Association (TRA), as a result of legislation signed last week by Minnesota Gov. Mark Dayton
The merger is pending approval of the two pension funds’ boards and DTRFA plan participants. The Minnesota TRA is expected to approve the merger, according to a statement on its website. The Duluth Teachers’ board approved the initial idea when it was proposed last year.
The commission report was requested last year by the state legislators, asking the commission to look at combining the assets and administration of DTRFA as well as the $926 million SPTRFA into the state teachers fund. It also asked the boards of the Duluth and St. Paul teachers pension funds to vote on whether they approved of a merger; the Duluth fund’s board voted in favor while the St. Paul fund opposed such a move.
The Duluth board wanted the merger to reduce its liabilities. “To close the gap … we can’t invest our way out of it,” J. Michael Stoffel, deputy executive director at TRA and former executive director of the Duluth plan, said in an interview last September. The St. Paul board said at the time the merger would be too costly.
However, St. Paul Teachers will get $7 million a year from the state beginning Oct. 1, 2015, to help improve its funded status, as part of the bill signed by Mr. Dayton.
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