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Public pension system investigates salary spiking to boost retirement pay


Minnesota's Public Employees Retirement Association (PERA) has launched an investigation to see how prevalent the practice of pension spiking is, and to determine whether it can be limited.

Spiking is the term used when public employees work massive amounts of overtime in their final five years of employment in an effort to hike their salaries to increase their pensions.

The Pioneer Press reported that the state probe comes following the newspaper's investigation into spiking that it documented among supervisors in the St Paul Fire Department.

At the time of the Pioneer Press story, PERA Executive Director Mary Vanek said the pension system had no method to calculate whether workers are boosting salaries, because employers don't break out earnings to show overtime pay. Now PERA has requested three years' worth of salary data, including the overtime amounts, from local governments, to see if spiking exists throughout Minnesota's public retirement system.

That analysis is expected to be presented at the PERA Board of Trustees' December 12th meeting. At least 15 states have enacted anti-spiking provisions.

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