Committee action, May 16: HB 311

HB 311, the slightly smaller version of SB 7, came out of the Senate Retirement Committee today in pretty good shape. About the only major change contemplated was keeping the 2.5 percent rate of accrual for retirees after a certain number of years of service.

As we know, the state retirement systems face an unfunded accrued liability in the neighborhood of $12 billion, largely due to the generosity of the system to retirees. The changes would prevent people from retiring in their late 40’s near 100 percent of their average earnings of their (usually) last three years, or in their late 50’s at over 100%, with the ability to then double-dip, sometimes with their own agencies.

As usual, the retirement systems’ representatives argued the apocalypse would occur regarding these future employees (anybody hired after the end of the year; it doesn’t apply to present employees). Here’s the sad picture painted: the average LASERS-qualified employee arrives at 35, retires at 58, and thus over 40 percent of them will retire at levels below poverty.

Right – if they’re dumb enough not to set aside some money in addition to their state pension, which everybody except at the lowest pay levels has the capacity to do. Further, they’re entering the system later at higher compensation levels and leaving it relatively early because the generosity of the system gives them incentive to do so! Finally, they always have the exit option – if they think benefits are too low, they’re perfectly free to work elsewhere.

The bill’s sponsor, state Rep. Pete Schneider, did not mince words when it came to his assessment of assistance he got from LASERS itself. He declared it and its director Bob Borden had not always been forthcoming and completely helpful in trying to find a solution to the unfunded liability problem – an assessment that state Sen.Walter Boasso did not disagree with, Boasso complaining about the tons of misinformation the agencies did not discourage from being disseminated about this bill and his own SB 7.

In the end, the bill went to the Senate floor unanimously. It may have a chance to pass since, unlike Boasso’s bill, it does not address the question of system governance.

TUESDAY: HB 80 is scheduled to be heard by the House Civil Law and Procedure Committee; HB 688, HB 691, and HB 731 are scheduled to be heard by the House Ways and Means Committee.