A quirk in state retirement law is prompting Cloquet Mayor Bruce Ahlgren to resign his position for 30 days.
Ahlgren said he stepped down on Thursday, and the Cloquet City Council is scheduled to vote on the matter Tuesday.
Laws governing how the Public Employees Retirement Association of Minnesota calculates retirement benefits are forcing the issue. PERA was established in 1931 and now represents about 200,000 active and/or vested state, county and local employees.
Under state law, an employee who pays in to the PERA system from two jobs cannot collect retirement benefits from one job while continuing to pay into the system from the other, said PERA Pension Services Manager Allen Eldridge.
That's because a person's retirement benefits are based on the combined salaries, he said. For example, if one job pays $30,000 annually and the other pays $20,000, if a person retires from only the $30,000 position, retirement benefits are based on a total $50,000 annual income, Eldridge said. The law applies to anyone earning at least $425 in any month. Ahlgren's position as mayor pays about $800 per month.
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Employees are required to be out of the PERA system entirely for 30 days before they can receive retirement benefits.
Ahlgren retired from his position as the Carlton County Court administrator at the end of March, and he received two pension checks before PERA caught the error, Ahlgren said. He was required to return the checks.
"We run into this situation three or four times a year," Eldridge said. Most situations involved public employees who also hold elected office, and most affected people either delay their retirement or leave both positions at the same time, he said.
Technically, the employee could step back into the elected position if asked by, for example, the city council, Eldridge said, though he has not heard of that happening. State law explicitly says there can be no written or oral agreement to rehire an official before he or she steps down, he said.
Ahlgren is in his third term as mayor of Cloquet. He ran unopposed for the four-year term in November and said he plans to keep up with council events during the next month. He will continue to serve on the Cloquet Economic Development Authority.
"I hope they bring me back in July," Ahlgren said.
As acting mayor, Cloquet City Councilor Herb Johnson will take over in Ahlgren's absence.
Johnson said the issue has not been discussed by the City Council. If the council chose to reinstate Ahlgren, they still would have to hold a special mayoral election in the fall. Information about the cost of a special election in Cloquet wasn't available Monday.
