Legislation Progress Update 9/12/2011- Senate Bill No. 02010
On September 12, the Legislature’s Joint Public Service Committee released the major pension reform bill as voted by that Committee and sent it to Senate Ways and Means Committee. The Bill was assigned a number – Senate 2010 by the Senate Clerk’s office and scheduled for action by the Senate on Thursday, September 15.
NOTHING IS WRITTEN IN STONE – ALL, NONE, OR SOMETHING DIFFERENT COULD HAPPEN – SO WHAT YOU HEAR AND READ NOW IS ONLY WHAT WE KNOW HAS BEEN PROPOSED. “IT AIN’T OVER ‘TIL IT’S OVER”.
There are a number of focal points of this legislation, some of which only involve State and Teachers, or have little consequence, so I will not take the time to describe them here. However, there are some significant changes proposed that have major impacts – some for current members, and some apply to new members after January 1, 2012. I summarize them below.
Scroll to the bottom of this page for links to the full text of the proposed legislation.
Current Members Close to Retirement:
This is an attempt to minimize salary “spiking”: Anyone retiring after January 1, 2012 will have the salary portion of their retirement calculation adjusted if any year’s salary in the calculation increases more than 7% of the average of the two preceding years. The Consumer Price Index (Inflation) is considered, as are bona fide increases in hours, and changes in position.
Elected officials retiring after January 1, 2012 will have to forego their retirement benefit for one year after retiring if they are subsequently elected to public office again.
Towns, schools, districts, and agencies will have to send copies of Collective Bargaining Agreements to the retirement office, which will then be reviewed for compliance with retirement laws.
New Members (After January 1, 2012)
“Three-high-years” average salary might change to “Five-high-years” in the retirement calculation. Again, this is proposed for new members after January 1, 2012.
Retirement eligibility after twenty years at any age will be eliminated. Again, this is proposed for new members.
Minimum retirement age will be increased to 60 (from 55). New members only.
The “age factor” percentage will be reduced and pushed out to age 67 for regular members, and age 57 for police and fire, and there will be new calculation tables created – but again, this is for new members after January 1, 2012.
The contribution/deduction rate drops to 4% after 35 years of service (from 9%), but again, this is for new members after January 1, 2012.
For new members with mixed service between groups (regular (group 1) and public safety (group 4)), the retirement calculation will be prorated based on service in each group. (Currently it is based on the group classification of the position retired from.)
That concludes my summary. As you can see, most of this pertains to future members. However, this is only what is proposed – anything can happen to the exact wording between now and passage into law. Click these links to read the summary and/or full text of the proposed legislation: