LEGISLATIVE BULLETIN #8
This will probably be the last bulletin for the current legislative session. Our “13th check” bill, HB 1074, has passed through the legislature and has the same language as last year. After it was sent back to the House because last year’s language was amended into it from the Senate, Representative Burton filed a concurrence motion, which means that he would not try to amend it again but would accept the bill in the form that came from the Senate.
FYI:
Retired teachers will receive an additional amount in the September Check if they had
Less than 10 years of creditable service but are on disability: $150
10 years’ creditable service, but less than 20: $275
20 years’ creditable service, but less than 30: $375
30 plus years’ creditable service: $450
The bill still must be signed by the Governor, but Steve assures me that it is certain that he will sign it.
Yesterday afternoon (Thursday) I attended the conference committee for HB 1075, the bill that deals with the Annuity Savings Account. There have been numerous forms of this since the session began, and the conference committee report is five pages, but I’ll put the information about the ASA in bullet points that I feel are pertinent.
- INPRS may not enter into an agreement with a third party provider for managing the annuities before October 1, 2017.
- INPRS board must establish on October 1 and April 1, each year, beginning on October 1, 2014, the interest rate used to determine the annuity amount purchasable by a member of TRF.
- The interest rate for a member who elects to purchase the annuity is equal to the interest rate on a 10-year Treasury note on the immediately preceding September 1 or March 1, respectively, plus 1.5%.
- The interest rate established may not be less than 2% or more than 10%.
- Whenever the board enters into an agreement with a third party provider, the interest rate used to determine the annuity amount is equal to the rate for similar annuities being purchased in the private market as recommended by the third party provider.
- There are other points that are made, but these are the important ones for those teachers who are now trying to decide whether to retire this year.
The four members of this conference committee were Chairman Burton, Representative Niezgodski, Senator Tallian, and Senator Walker. They have all worked together and have worked very hard to try to make this as fair as possible. It has certainly been a learning experience for me to sit in on these meetings and to hear the various points of view, but it has also been heartwarming to see bipartisan cooperation and concern. They all deserve our thanks.
I did testify briefly to thank the committee for all the hard work and cooperation that I had seen since this began last summer at PMOC. (Pension Management Oversight Commission.)
I will add that the whole question of the ASA and pensions in general will be discussed at length in the PMOC meetings this summer. I will be at each PMOC meeting, and I imagine that Steve and Ray Jones will attend also.
Ray and I will continue to attend each INPRS board meeting to follow what the board does in regard to teacher pensions.
I will be working with Jeff Hutson from INPRS on an article for the June newsletter that will try to put this all into perspective and to educate our active members about the bill and its ramifications.
Meanwhile, as active teachers ask us about what the bill says and how it will affect their retirement, I feel that we need to tell them that it is really important that they talk to a financial advisor, preferably one who is an expert on retirement issues. We can’t advise them any further than that, but we can let them know that INPRS will be making these changes to the interest rates that people can earn if they annuitize their savings accounts after this fall.
The phone number for them to talk to INPRS is 1-888-286-3544. When it is answered automatically, they need to press #2 to get to a person.
Our Legislative Committee will be meeting on April 9. We will begin the planning for next session at that time. As your executive director, I still have COLA uppermost on my agenda.
Thank you for all the help that so many of you have given this session! We will need you and many more like you in the coming year.
Nancy
