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Friday, November 29, 2013
Proposed Pension Reform Bill Next Week (from Today’s Capitol Fax by Rich Miller)
…Employees will contribute 1% less toward their pension.
…Future COLAs will be based on a retiree's years of service and the CPI. The annual increase is equal to 3% of years of service multiplied by $1,000 ($800 for those coordinated with social security). The $1000/$800 will be adjusted each year by the CPI for everyone (retirees and current employees). Those with an annuity that is less than their years of service times $1000/$800 (or whatever the amount is at the time of retirement) will receive a COLA equal to 3% compounded each year until their annuity reaches that amount.
…Current employees will miss annual adjustments depending on age: employees 50 or over miss 1 adjustment (year 2); 49-47 miss 3 adjustments (years 2, 4, and 6); 46-44 miss 4 adjustments (years 2, 4, 6, and 8); 43 and under miss 5 adjustments (years 2, 4, 6, 8, 10).
Pensionable salary cap: Applies the Tier II salary cap ($109,971 for 2013), which is annually adjusted by the lesser of 3% or ? of the annual CPI-U. Salaries that currently exceed the cap or that will exceed the cap based on raises in a collective bargaining agreement would be grandfathered in.
…For those 45 years of age or under, the retirement age will be increased on a graduated scale. For each year a member is under 46, the retirement age will be increased by 4 months (up to 5 years)…
…Up to 5% of Tier 1 active members have the option of joining a defined contribution plan. If a member chooses to opt into the defined contribution plan, benefits previously accrued in the defined benefit plan will be frozen.
…All pension matters, except pension pickups, are removed from collective bargaining.
…Prohibits the State pension systems from using pension funds to pay healthcare costs.
For entire article: Capitol Fax by Rich Miller