IRTA Newsletter, February 8, 2016

Dear Member,

Please Email Your State Senator Immediately – Ask Them to Oppose HB 1004 and Support HB 1161!

You can identify your State Senator at this link: http://iga.in.gov/legislative/find-legislators/. The link will tell you their district number. Their email address will be s(district number)@iga.in.gov. For example, Sen. Frank Mrvan represents district 1. His email address is s1@iga.in.gov.

Please compose an original email using the information provided below. Do not cut and paste any of this email: “form emails” are ineffective and in fact can completely backfire!

Background Information – HB 1004

HB 1004 passed the House by a vote of 57 – 42 after lengthy and spirited debate. 13 republicans joined 29 democrats in opposing the bill. The bill addresses 3 separate issues: supplemental pay, licensure reciprocity and creates a “Defined Contribution Only” pension option for newly hired teachers. It is this section of the bill that is of great concern to IRTA. This bill’s stated intent is to address the current teacher shortage. We do not believe that a DC only option does anything to entice or retain new teachers but it does take an incremental step toward making a DC plan the only pension option at some time in the future.

Talking points for HB 1004

• Indiana Educators have both a DB (defined benefit) and DC component to their retirement plan, the pension and ASA account. The current system is the best of both worlds and a DC only option is not needed.

• Even though “DC Only” is an option in HB 1004, it is an incremental step toward doing away with our current pension plan and replacing it with a DC only plan in the future.

• Allowing a DC Only option is a significant change in public policy and should be extensively studied and vetted in the Pension Management Oversight Committee and then again in the Pensions and Labor Committee.

• As a group, employees are poor investors. DB plan assets are managed by professional managers, which on average, earn greater returns than DC plans through pooling resources.

• With a DC plan, the stock market may determine retirement despite age or health.

• An educator choosing the defined contribution only option will need to save $650,000 to generate a monthly income equal to an average teacher pension. The volatility of the stock market coupled with flat teacher salary increases will make it very difficult to save this amount. What happens when an individual cannot save enough to retire? Either they continue to work well past their prime or may end up on welfare and/or other types of public assistance. Neither is desirable.

• Proponents suggest that the DC only plan is good because it is an option and millennials want options. Then maybe the bill should include options to invest in junk bonds, oil company stocks or wheat futures. It could work out well for an individual choosing one of these options. But we all know the outcome will likely be disastrous.

• Consider the fundamental causes of the teacher shortage. Does anyone believe individuals are not choosing teaching because they want an uncertain, speculative choice about retirement security?

**Please note that in an earlier call to action, IRTA listed “increasing the unfunded liability” of teacher pensions as a major concern. We now understand that language in the bill addresses that concern and should no longer be mentioned in communication with legislators.

Background Information – HB 1161

HB 1161 is the “13th Check” bill. It passed the House by a vote of 91 – 0 and is awaiting action in the Senate Pensions and Labor Committee, chaired by Sen. Phil Boots. . An increase is on our wish list and we are working for an amendment to achieve it. Please ask your Senator to push for an increase in the “13th Check” amount. It will be a struggle to get an increase this session since it is not a budget year, but it is also an election year and those up for election may want to help retired teachers.

Talking Points for HB 1161

• No Social Security increase this year

• 8 years since last COLA in 2008

• Grocery prices have increased over 32% since 2008

• Electric Bills have increased over 15% since 2008

• Health care cost continue to escalate

• Over 14,000 retired teachers receive less than $1,000/month in their pensions

• Over 6,000 retired teachers receive less than $650/month in their pensions

• Indiana has had a surplus from their yearly budget the past few years that would more than fund a “13th Check” each year

• “13th Check” amount has never increased since its inception

• HB 1161 is funded by proceeds from the recent “tax amnesty” program and will not increase the unfunded liability of the Pre’96 pension fund.

Our goal is to ensure every State Senator receives multiple emails from constituents regarding HB 1004 and HB 1161. However, it is imperative that certain Senators are contacted because of their committee assignment, their service in a leadership position or have a contested election in 2016. If your Senator is on one of the lists below, it is doubly important that they hear your voice.

Senate Pensions and Labor Committee

Senate Leadership lists, Co-sponsors, Contested Races, Leaving Senate

(R) Senator David Long – President Pro tempore Dist. 16 Senator.Long@iga.in.gov
7100 W. Jefferson Blvd., Ft. Wayne, IN 46804 (Leadership and Contested Primary)

(R) Senator Patricia Miller – Assistant President Pro Tempore Dist. 32 Senator.Miller@iga.in.gov
1041 Muessing Rd., Indianapolis, IN 46239 (Leadership and Retiring)

(R) Senator Jim Merritt – Majority Caucus Chair – Dist. 31 Senator.Merritt@iga.in.gov
10327 Tarpon Dr., Indianapolis, IN 46256 (Leadership)

(R) Senator Jim Tomes – Assistant Majority Caucus Chair - Dist. 49 Senator.Tomes@iga.in.gov
9412 Highway 66, Wadesville, IN 47638 (Leadership)

(R) Senator Brandt Hershman – Majority Floor Leader Dist. 7 Senator.Hershman@iga.in.gov
PO Box 177, Buck Creek, IN 47924 (Leadership)

(R) Senator Randy Head –Assistant Majority Floor Leader, Communications Dist. 18 Senator.Head@iga.in.gov
200 W. Washington St., Indianapolis, IN 46204 (Leadership)

Senator Luke Kenley – Chair of Appropriations – Dist. 20 s20@iga.in.gov
102 Harbour Trees Ln. Noblesville, IN 46061 (Co-sponsor, contested primary, Leadership)

Senator Eric Bassler – Co-Sponsor – Dist. 39 s39@iga.in.gov or eric@ericbassler.com
200 W. Washington St., Indianapolis, IN 46204 (Co-sponsor)

Senator Jim Banks – Co-Sponsor – Dist. 17 s17@iga.in.gov
200 W. Washington St. Indianapolis, IN 46204 (Leaving Senate)

More Info on Senate Pensions and Labor Members

Brent Waltz – Running for Congress
Jim Banks – Running for Congress

February 8 will begin the second half of the 2016 legislative session. Time is short and it is absolutely critical that members of the Indiana Senate hear from their retired teachers constituents.

If your county hosts 3rd houses, cracker barrels, or legislative breakfasts, please attend these meetings and bring these bills up for discussion by your senators. They are aware of HB 1004 and HB 1161 as they were forwarded all bills on February 4, 2016 and IRTA has already sent each Senator a letter on our position. The Senators are receiving Fact Cards each week on the DC/DB issue and the “13th check” along with Steve and me meeting with many Senators personally.

If you are attending our Legislative Brunch, be sure to contact your Senator and let them know you will be at the Brunch. You may also set an appointment to speak to them. If your Senator is not available, feel free to meet or set appointments to meet with the co-sponsors of the bill, leadership and members of the committees.

Now is the time for the grassroots to take effect and they need to hear loud and clear from their constituents. They need to know we are here, we listen, we care and we vote. We are tired of being forgotten and pushed aside.

The last half of session will be our last chance to remove the Defined Contribution Only option out of HB 1004 and the best chance for that is in the Senate Education Committee.

Thank you so much for your efforts and support. You will be the ones that make the difference.

Tom and Steve