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The framework for reforms to four of the five state-funded pension systems (GARS, SERS, TRS, SURS) are reportedly as follows:
- Deferring COLAs until age 67.
- Only applying COLA’s to the first $25,000 of income ($20,000 for SERS employees that participate in Social Security).
- A possible COLA freeze for 5-6 years.
- Employee contributions would increase by 2% with the increase being phased-in over two years.
- Pensions would be based on the greater of the salary earned upon passage of the bill or the wage base for Social Security.
- Certain amounts would be transferred from the General Revenue Fund to the Pension Stabilization Fund to pay down the unfunded liability.
- Retirement systems could enforce state contribution requirements in the court system.
Cash Balance Plan
- A cash balance plan would be instituted for employees hired on or after January 1, 2011 (Tier 2 Employees).