2001 House Bill 5109 ↩

Senate Roll Call 278: Passed

To authorize a one-time early retirement incentive for certain state employees who retire between July 1 and November 1, 2002. (This proposal was originally contained in House Bill 5732.) State employees whose combined age and years of service totaled 80 as of November 1, 2002, would be eligible to elect to take advantage of the offer during a signup window of April 1 to April 30, 2002. The incentive would increase the multiplier used to calculate the retirement benefits of these employees from 1.5 percent to 1.75 percent of highest salary times the number of years served, which would increase the cash portion of their pension benefits by 16.7 percent. The bill also contains a provision to create a new pension fund retirement health care sub-account, which would pay for future state retiree health care benefits. This sub-fund would receive from the regular pension fund any contributions in excess of the amount deemed sufficient under actuarial and accounting standards to cover future pension expenses. In years when employee pension contributions were less than this amount, money could be transferred from the health care sub-fund to the pension fund, subject to approval by legislative appropriations committees. Also, the bill includes a provision which requires an application for a duty disability retirement pension to be filed no later than one year after termination of employment. The early-out offer was proposed by the governor as a way to balance the FY 2002-2003 state budget without additional cuts in state spending. This bill originally just extended to state employee pensions the same protection against being alienated (taken) in a bankruptcy procedures as that afforded under current law to private sector pensions, and this provision is still included. The bill is tie-barred to <a href="/bill.asp?ID=6536">House Bill 5112</a>, which contains an early retirement pension enhancement proposal for judges.