2018 PENSION LEGISLATION

 

A stipend (13th Check) was approved in the 2017 State Budget, so there was not a need this year to approach the 2018 Legislature for a stipend or COLA.

 

The 2018 State Legislature, however, did pass a bi-partisan bill to support and establish Supplemental Accounts for increasing pension benefits such as a Cost of Living Adjustment (COLA) or stipend (13th Check).  With these Supplemental Accounts established, the legislature will be able to prefund these accounts to establish potential increases in pension benefits.  These accounts will not have enough funding until at least 2020 to begin to pay out.

 

 

2017 PENSION LEGISLATION

 

During the 2017 General Assembly there were 1179 bills filed, 525 presented in the Senate and 654 in the House.  24 Pension related bills were filed and 10 of those effected teacher pensions, 9 of those bills died in the General Assembly although one bill had its language resurrected in HB1001, the Budget Bill, at the very end of the session.

 

There were 3 COLA bills and 3 “13th Check” bills written, but only HB 1534 the traditional “13th Check” bill cleared both houses and was signed by the Governor on April 20th.  The “13th Check” was funded at its normal amounts for two years in the budget which is the first time that has happened.  HB 1534 passed unanimously out of the House and on a 49-1 vote in the Senate. Only Senator Kenley voted against the bill.

 

The amount of the 13th Check was the same as has been given during the past years.

 

 

NB 1467, the Defined Contribution Option bill for new educators, passed through the house mostly on a party line vote.  It met more opposition in the Senate and passed on a delayed vote 26-24, with one Senator changing his vote in the middle of the delay and the last two Senators that delayed the vote, voted yes. Representative Carbaugh, who authored HB 1467, was not pleased with the two amendments that the Senate Labor Committee added that stripped the bill of some flexibility.  The three year flexibility was the only portion that the IRTA liked about the bill that had very few positives and they opposed the bill overall.  Representative Carbaugh took the bill to Conference Committee hoping to have the bill redeemed to its original language.  He was not able to accomplish that, so the bill died in Conference Committee, or so everyone thought.

 

The following week, during the last two days of  the General Assembly session, the language of HB 1467 was placed into the Budget Bill behind closed doors.  This was done after any public testimony could be given and before updated versions of the 165 page bill could be read.  The Budget Bill passed, so in the future new teachers will have to choose between the Hybrid Pension system that retired teachers are currently under or a 401K style retirement plan when they sign their first contract.  Many legislators were unaware that this language was included in the Budget Bill when they voted on it. This pension option will most likely become effective after IRS approval for the 2018-2019 new hires.

 

 

 

2016 PENSION LEGISLATION

 

HB 1161 “13th check” had complete support in the House of Representatives.  The bill was authored by Representative Gutwein with an amendment added by Chairman Brown to fund the bill through the tax amnesty program.  It was a huge help that the bill went fully funded and unanimously to the Senate.  The bill passed easily through the Labor and Pensions Committee and the Appropriations Committee and passed on the 3rd reading in the full Senate by a 39-11 vote.  Several additional amendments were added to the bill as it moved along.  Finally Representative Gutwein dissented and asked for the additional amendments to be pulled. The bill then had to pass through each of the steps again.  No amendments were added and the bill had final passage unanimously though the Senate.  It was later signed by the governor.

 

A much bigger problem arose when Representative Benning introduced a Defined Contribution Pension Plan to be offered to new hires in education in HB 1004.  This is the third time that such a bill has been considered in the Legislature.  Although not affecting currently retired or active teachers, this bill would have been a big blow to the pension programs of future teachers.  A Defined Contribution plan puts much more responsibility on the employee in managing the growth of his/her pension.  There is also no guarantee that the pension will not run out before the retiree is deceased.  Thankfully through the support and work of IRTA members and the IRTA Executive Director and lobbyist, this bill was defeated.  The problem, however, is that this plan is destined to return.  State legislatures across the nation are wanting to get out from under the responsibility of handling pension program.  It will be an unfortunate day for educators when this happens.