Missoula County opposes SB 389: Generally revise public employees retirement system, up for hearing this afternoon in the Senate State Administration Committee. This bill creates a third class for new employees enrolled in the Public Employees Retirement System (PERS), creating an artificial interest rate associated with their contributions into the plan. Instead of using a rate of return calculated by a certified actuarial, SB 389 now arbitrarily codifies the rate of return into statute between 4% and 9%, unless the retirement system was judged to be actuarially unsound as of the date of the most recent actuarial valuation. The plan has been actuarially unsound for many years, so the rate of return a new “Tier Three” employee would expect to see for the foreseeable future is 4%. A Tier Three employee has lower overall contributions into their retirement account in addition to no death benefits for a surviving spouse other than a lump sum payout of the remaining funds. The solution to the unfunded portion of the PERS retirement plan is not to create a lower class of retirement benefits for new employees. Instead, it is to fully fund the deficit contained within the PERS fund.
Senator Bennett,
ReplyDeleteMissoula County opposes SB 389: Generally revise public employees retirement system, up for hearing this afternoon in the Senate State Administration Committee. This bill creates a third class for new employees enrolled in the Public Employees Retirement System (PERS), creating an artificial interest rate associated with their contributions into the plan. Instead of using a rate of return calculated by a certified actuarial, SB 389 now arbitrarily codifies the rate of return into statute between 4% and 9%, unless the retirement system was judged to be actuarially unsound as of the date of the most recent actuarial valuation. The plan has been actuarially unsound for many years, so the rate of return a new “Tier Three” employee would expect to see for the foreseeable future is 4%. A Tier Three employee has lower overall contributions into their retirement account in addition to no death benefits for a surviving spouse other than a lump sum payout of the remaining funds. The solution to the unfunded portion of the PERS retirement plan is not to create a lower class of retirement benefits for new employees. Instead, it is to fully fund the deficit contained within the PERS fund.
Please oppose SB 389.