Minneapolis Pensions are on Shaky Ground

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It can't be comforting for Minneapolis teachers to hear that their pension plan currently has only 57 cents for every dollar it owes in liabilities. All in all, the Minneapolis plan owes $715 million more than it has on hand. Even in relatively flush 1999, the plan only had 67 cents in cash for every dollar that it owed. While it is unlikely that Minneapolis will default on its obligation and be unable to pay out to widows, orphans, and retirees, the prospects for rescuing the Minneapolis pension plan seem to rest on politically unpopular moves. One option might involve some sort of consolidation with the better- funded teachers' pension plans for the Duluth, St. Paul, and the state of Minnesota. Needless to say, the merger would cause both legal and political problems. Another option would be to increase state, district, and teacher contributions to the fund, which we suspect would prove just as controversial.