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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | May 2, 2013 02:53 PM |
|---|---|
| From: | Representative Warren Kampf |
| To: | All House members |
| Subject: | Future State and School District Employees Defined Contribution Plan |
| Colleagues, I ask for your co-sponsorship of two pieces of Pension Reform legislation I am about to introduce. These are redrafts of legislation I introduced last session, which many of you co-sponsored, although I have made some important changes and this legislation is therefore new. One piece of legislation would create a mandatory Defined Contribution (“DC”) plan for all future state employees. The other would create a mandatory DC plan for all future school district employees. Both plans would include an option for current employees to freeze their Defined Benefit plan in place, and switch to a DC plan for future service. Their prior Defined Benefit would remain for them upon retirement. The new DC plans would be a 4% employer match and a mandatory 4% minimum employee contribution in almost all cases. I think we need to stop adding new hires to our Defined Benefit plans. These systems are seriously underfunded, and the vast majority of our constituents support creating a retirement benefit for government employees which mirrors their own. While some of those who oppose moving to a DC plan for new hires claim that the costs associated with transitioning will be significant, Milliman, a national actuarial firm, TIAA-CREF, the long-established DC plan administrator, and The Arnold Foundation, which studies and advises on Pension Reform, have recently offered information and analysis to debunk the transition cost myth. I believe the redrafted legislation tracks their analysis. I hope you will co-sponsor these two new plans. Thank you for your consideration. |
Introduced as HB1352