Cost of living adjustment passes out of house committee
01/22/2015
Optional Defined Contribution plans for new hires in both PERF & TRF pass as well
ACTION: Please thank Rep. Bob Cherry and Rep. Woody Burton for offering COLAs to retirees. Also, please urge Rep. Burton to work with ISTA lobbyists on the Defined Contribution (DC) plan proposal.
The House Employment, Pensions and Labor Committee heard two bills of importance to our PERF and TRF members.
HB 1493 (Rep. Bob Cherry, R-Greenfield): Provides BOTH COLAs and 13th Checks for PERF and TRF retirees. ISTA recommends support for this bill.
HB 1481 (Rep. Woody Burton, R-Whiteland): While both HB 1493 and HB 1481 took circuitous routes to get through the committee, HB 1481 now also has some really great components, coupled with a new provision that ISTA would like to see continued work on. Rep. David Niezgodski (D-South Bend) also offered an amendment to HB 1493 that was accepted by the committee. The bill now looks like this:
- Grants COLAs in 2015 and 2016 to public sector employees, including TRF and PERF members.
- Maintains the existing PERF optional DC plan for new hires and does not mandate new hires go into a DC plan (as was in the original bill).
One concern is that the bill provides for an optional Defined Contribution (DC) plan for TRF new hire members. This could be risky and costly. Other states have tried the conversion from Defined Benefit (DB) to Defined Contribution (DC) with negative results for both the state and employees.
ISTA strongly supports the much-needed, long-awaited COLA language for both PERF and TRF members and applauds the House Committee for maintaining the DC plan for new PERF members as an option. ISTA indicated that it would like to continue to work with Rep. Burton on the TRF component.
The bill will now be heard by House Ways and Means.