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| SPONSOR: | Maes | DATE TYPED: | 02/28/01 | HB | |||
| SHORT TITLE: | Hazardous Duty Member Coverage Plan | SB | 774 | ||||
| ANALYST: | Eaton | ||||||
| Recurring
or Non-Rec |
Fund
Affected | ||||
| FY01 | FY02 | FY01 | FY02 | ||
| unknown | unknown | Recurring | General Fund | ||
| unknown | unknown | Recurring | County & Municipal Retirement | ||
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to Appropriation in The General Appropriation Act
SOURCES OF INFORMATION
Public Employees Retirement Association (PERA)
SUMMARY
Synopsis of Bill
This bill creates a new state hazardous duty member coverage plan for correctional officers. Specifically, Hazardous Duty Plan 3, if approved by an election of the affected membership, will allow for 20 percent enhanced service credit for every year the member has served has a correctional officer and 20 year retirement. The definition of "correctional officer" is amended to include county or municipal correctional officers. Additionally, this bill offers a higher pension factor of 3.5 percent of each year of service. The member must be in the Hazardous Duty Plan 3 for three years prior to being eligible for the 20 percent enhancement, 20 year retirement and the increased pension factor. Correspondingly, the member's contributions either stay the same or are reduced to 4.78 percent of salary and the employer's contributions are increased to 38.02 percent of the member's salary.
Significant Issues
That will result in correctional officers being eligible to retire at any age after 16 years and 8 months of service. The costs of these plan enhancements together in one plan have not been studied by PERA's actuaries and represent significant plan changes.
FISCAL IMPLICATIONS
This bill increases employer contributions over the percent of contributions for State Hazardous Duty Plan 2 by 12.3 percent. The increase in the amount of contributions for the municipal and county employees is varied, because these employees will be from all four municipal general plans.
An actuarial study would have to be performed to determine the increased cost to the general fund and the cost increases to county and municipal retirement plans.
ADMINISTRATIVE IMPLICATIONS
PERA is mandated to hold an election on the plan change and new election regulations would be required.
JBE/ar