Late last week, the Senate Pensions and Labor Committee amended and passed out HB 1075. It is now available for 2nd reading in the full Senate.
The bill has been amended to prevent INPRS from ever privatizing the administration of annuities. The bill had originally only prevented INPRS from contracting out for 5 years. ISTA welcomes this change.
The bill has also been amended to change the interest rate at which a member of TRF or PERF must be paid for their annuity. The current rate is calculated by looking at both the market and the history of the plan’s past performance.
The bill had originally allowed INPRS to set the annuitization rate once a year at a rate not less than the rate of return on the retirement allowance account (the assumed rate = 6.75%) for the prior 12 months.
However, the bill was amended to a single rate tied to a market based calculation. The bill now says that the rate will be set twice a year based on the current rate of the 10-year Treasury note, plus 1.5%.
By using today’s rate the original House version would offer a larger return for retirees.
Although the bill is not perfect by any means, it is a step in the right direction in protecting upcoming retirees and those already retired.
We are urging members to keep contacting their legislators and urge them to help provide a cushion from rate changes for those most nearest to retirement.