whereas no other pension plan in this state is required to meet those same levels of funding in such a short time period.
The bill, as amended:
Raises contribution rate for all employees with salary of $20,000 and above:
- FY 2014 Employee Contribution Rate - 10.1% (School administrators are having the 10.1% they are required to pay covered out of lump sum individual school employee salaries funding as a deferred salary benefit. These administrators pay nothing into the pension plan out of their current salaries.)
- FY 2015 Employee Contribution Rate - 10.7% (How would you like to be forced to pay this much of your annual income into a retirement fund?)
- Employees with annual salary below $20,000 stay at 7.9%
For new employees hired on or after July 1, 2013: (Part-time employees, whom levels can reach as high as 70% + are still forced to pay into the pension plan.)
- Soft Minimum Retirement Age of 55; actuarial reduction if member retires with 30 years and is younger than age 55.
- COLA begins at age 67, rather than age 65
For current retirees:
Immediately reduces the Cost of Living Adjustment (COLA) for all retirees until the plan is 100% funded. The COLA reduction is based on the median retirement benefit ($18,000) of all retirees excluding disability retirements.
Retirees with benefits at or below the median AND with 25 or more years' service, will have a 10% COLA reduction; their average COLA will be 1.8%. All other retirees will have a 20% COLA reduction; their average COLA will be 1.6%. (Please note that the cost of food, gas, utilities, and housing has not and will not be reduced in the coming years for these retirees who are living on fixed incomes.)
These reductions will stay in place until ERB is 90% funded. Once there, the COLA reductions will decrease. The retirees with benefits at or below the median AND with 25 or more years' service, will have a 5% COLA reduction; their average COLA will be 1.9%. All other retirees will have a 10% COLA reduction; their average COLA will be 1.8%. (No action was taken to prevent payouts to lawyers for fund managers who were sued for mismanaging the pension fund in the first place. It is highly likely that future managers will also mismanage the fund thereby preventing it for every reaching a 90% funding rate.)
Once ERB is 100% funded, the COLA reductions will cease and the average COLA for all ERB retirees will be 2%. This bill is consistent with ERB’s funding policy to ensure ERB's long-term sustainability.
Is it any wonder why State Representatives like Mimi Stewart were so offend by this bill. Yet, the majority of Legislators and School Administrators supported and even voted for this bill.