The Minneapolis Teachers Retirement Fund Association is merging with the state Teachers Retirement Association because the former was mismanaged so badly to be left holding $.45 for every $1 of pension liabilities it had. The fund is closing very soon, and took what appears to be an illegal step in trying to create a trust fund to cover the backsides of its managers (including a $330k golden parachute for executive director Karen Kliberg.) This would have the effect of withdrawing an extra $1.5 million of the $783 million in assets it has left. The difference between what is turned over and what is to be paid is coming from state taxpayers, to the tune of $18 million per year.

The state auditor's office went to the fund's office to get documents about the trust and were turned away.

[Attorney for the trust Tom] Heffelfinger said the trust money would pay only for obligations not otherwise covered in the transition, and any money left over would revert to the TRA. He noted that board members are not paid and couldn't be expected to serve unless protected from potential lawsuits.

Heffelfinger, a former U.S. attorney for Minnesota, accused Anderson, a fellow Republican, of playing politics with the issue. He also said the Legislature sped up the merger at her urging, allowing barely a month to complete a complicated transition that had been expected to take 13 months.

Anderson said there is no need for a trust to withhold money to pay bills, including Kilberg's severance package, because the Teachers Retirement Association will be obligated to pay outstanding Minneapolis pension obligations. Anderson said the trust is diverting money that should be used to finance the merger and offset the Minneapolis association's nearly $1 billion in unfunded obligations to current and future retirees.

Interestingly, the attorney general's office is supporting Anderson in this food fight. Records have been subpoenaed, and the trust is fighting it in court. So it appears Hatch and Anderson, both running for political office for opposite parties, will be cooperating a little more than usual during the electoral seaosn.