The Senate Budget Committee introduced a new Committee Bill today, SPB 7094. The bill reworks many of the terms of Senator Ring’s SB 1130 to the detriment of current members, and brings the Senate version much closer to the House version. The committee is headed by Republican Senator J.D. Alexander. As we read the new proposal, which is to be heard by the Committee on Wednesday, it proposes to:
· Does away with the DROP program after July 1, of 2011. It appears to read that you must enter the DROP prior to that date in order to be eligible. (lines 1857 through 1862)
· The Investment Plan will be mandatory for ALL new hires after July 1, 2011, and will not be eligible for a Pension. (lines 888 through 896
· Members will cease to accrue COLA credit after July 1, 2011. As in HB 1405 the COLA will be calculated using service prior to July 1 as a percentage of total service multiplied by 3%. Therefore, it appears that if you have 20 years of service prior to July 1, and 10 years after, you will be eligible for 20/30 = .67% times 3% = 2% annual COLA. Those hired after July 1 will not be eligible for the COLA. (lines 1944 through 1963
· Average Final Compensation for service prior to July 1 will include overtime, and up to 500 hours of unused leave time. Service after July looks like it will not include overtime, nor can you add to unused leave time. (lines 471 through 513)
· The Vesting Schedule in the Investment Plan for Employer contributions is spread over 5 years, with 20% credit per year. You would be fully vested after 5 years. (lines 3141 to 3151).
· Employee Contributions will go to a flat 3% of gross compensation for all employees. (lines 4555 to 4557)
· Normal retirement age for those hired after July 1 for Special Risk will have the normal retirement age increase to age 62 or 30 years of service. (lines 536 through 542).
This new proposal will bring the Senate version of Pension Reform closer to the House version, and therefore closer to becoming law. In order to become law, both houses must approve an identical version. While they are still not identical, they are working that way.
IT IS ESSENTIAL THAT ALL FRS MEMBERS CONTACT THE MEMBERS OF SENATOR BUDGET COMMITEE (Click on the blue underlined link for members and contact information) AND EXPRESS THEIR VIEWS BEFORE THE HEARING ON WEDNESDAY!