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Pension body proves its worth
IN ONLY ITS first year, the new 20-member Select Committee on Pension Policy has proven itself.
Its members have gained credibility with the State Legislature and the body has been instrumental in the passing of bills that will improve Council 2 members’ pension benefits.
The committee — appointed by the Legislature last year after years of work on pensions reform by Council 2 — ensures that the views of active and retired employees are heard more strongly than was the case with the previous board.
In this year’s legislative session, three bills developed by the new committee were approved by the Legislature.
“They will help to improve our state’s pensions system, which, as members know, has been inadequate in meeting the needs of public employees,” says Council 2 Deputy Director Pat Thompson who played a leading role in the establishment of the new pensions committee.
The major hurdle we need to overcome is age 65 being the “normal” retirement age, Thompson adds. “The committee is reviewing priorities for next session and lowering the 65 age is at the top of our list,” he says.
Pension bills approved
The two largest measures approved in the 2004 legislative session involve workers in public safety.
• SB 2537 provides a $1,000 minimum benefit to mitigate the hardship of long-term retirees. It includes coverage of medical premiums. It creates the “Public Safety Employees’ Retirement System Plan 2” and lists the job classes of full-time fully compensated members of the Public Employees’ Retirement System Plans 2 and 3 (pers 2/3) that are eligible for membership.
The measure allows psers 2 members a normal retirement age of 60 with 10 years of service and early retirement beginning at 53. Members with 20 years of service may retire early with a 3 percent-a-year reduction to their benefits.
Members who transfer from pers 2/3 will be dual members, and receive benefits from each plan under the portability rules.
Current members will begin receiving service credit in the new system July 1, 2006.
The bill includes specific job classes: city corrections officers, jailers, police support officers, custody officers and bailiffs, county corrections officers, county probation officers and probation counselors, state correctional officers, correctional sergeants and community corrections officers, liquor enforcement officers, park rangers, commercial vehicle enforcement officers and gambling special agents.
The measure will cost about $270 million over the next 25 years and will be equally split between employees and employers as it is in all current systems.
• SB 2535 permits members of the Public Employees’ Retirement System and the School Employees’ Retirement System Plans 2 and 3 to purchase up to five years of service credit. The service credit may be bought at time of early retirement at full actuarial cost. A member purchasing service may pay all or part of the cost with a transfer from an eligible retirement account. This would allow members to transfer their 401(k) money directly to DRS to buy down their retirement age by up to five years. More importantly, this benefit can be bargained locally.
• HB 2538 establishes a minimum benefit of $1,000 a month, before optional reductions, for the Teachers’ Retirement System and the Public Employees’ Retirement Plan 1 members with at least 25 years of service and who have been retired for at least 20 years.
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