Nonconcurrence Vote Passed
May 4, 2012
May 3, 2012(Key vote)
Title: Amends State Pension System
Vote Smart's Synopsis:
Vote to pass a bill that amends certain retirement plans for public employees.
Requires all public employees, hired on or before July 1, 2014, to contribute a mandatory 6 percent of compensation funds to the public employee’s retirement system via a salary reduction (Sec. 5).
Prohibits public employees’ from voluntary contributing to their retirement plans (Sec. 5).
Requires all public employers to credit, on a quarterly basis, 4 percent of compensations to each member’s retirement annuity account and to designate a portion of those funds to the employee’s long-term disability and death plan (Sec. 7).
Establishes a quarterly interest rate guaranteed by the state is placed on an employee’s retirement plan, based as follows (Sec. 8):
Employed for 20 years or less: 6 percent compound interest;
Employed for 20 to 30 years: 6.25 percent compound interest; and
Employed for 30 or more years: 6.5 percent compound interest.
Specifies that a member of the public employees’ retirement plan is “vested” when they have completed five years of service (Sec. 12).
Authorizes public employees’ to select any of the following benefits, including but not limited to (Sec. 13):
A retirement plan account lump-sum payment of no less than 10% and no more than 30 percent; or
A retirement plan account, which in the case of death before retirement age allows a spouse, named primary beneficiary, to receive annuity based credits within the account at the time of death.
Requires that beginning on January 1, 2014 public employees’ retirement plan members hired before July 1, 2009 adhere to contribution regulations, including but not limited to (Sec. 21):
Members that had elected to gain credit for 1.4 percent of their final salary must begin making 4 percent employee contributions; and
Members that had elected to gain credit for 1.85 percent of their final salary must begin making 5 percent employee contributions.
Requires that public employees’ retirement plan members hired before July 1, 2009 make 6 percent employee contributions beginning on January 1, 2015 and continuing every following year (Sec. 25).
NOTE: THIS IS A SUBSTITUTE BILL, MEANING THE LANGUAGE OF THE ORIGINAL BILL HAS BEEN REPLACED. THE DEGREE TO WHICH THE SUBSTITUTE BILL TEXT DIFFERS FROM THE PREVIOUS VERSION OF THE TEXT CAN VARY GREATLY.