Legislation containing reforms to the state’s retirement systems is expected to pass through the state Senate Friday morning, according to a member of their leadership team.
Senate Bill 1, sponsored by Joe Bowen, chair of the Public Pension Oversight Board, with Senate President Robert Stivers as the primary co-sponsor, would move all new teachers into a hybrid cash-balance plan after the legislation is enacted and focus on adopting a level dollar funding formula to ensure the correct amount of funds are put toward the systems up front rather than backloading payments as has been done previously. The plan also includes items adjusting the current systems to create savings as the state faces more than $60 billion in unfunded liability from the systems. (Get more details about what is in the bill here.)
In an exclusive interview with The Bottom Line Thursday, Senate Majority Leader Damon Thayer said Senate Bill 1 has been posted in the Orders of the Day for Friday and he said he expects the Senate to take action on the bill and believes it has the votes to pass.
“It’s a good way forward, it reduces the risk for taxpayers, I think our bond rating agencies will be happy with it. It does put us on a path to sustainability for our pensions and provides a good pension for those who are currently retired and those in the system and creates a new hybrid cash-balance plan, much like we did in Senate Bill 2 in 2013, for future teachers,” Thayer said.
Thayer noted funding is also part of the equation with the budget currently moving through the legislative process containing full funding for the state’s retirement systems with more than $3 billion going to pensions over the next two years.
Some of the changes for current and retired teachers contained in the bill, including changes to the cost of living adjustments (COLAs), have been changed as the bill moved through the process with the reduction in COLAs being lessened in the version the Senate will vote on tomorrow. (Thayer discusses COLA changes contained in Senate Bill 1 at 2:00 in the video.)
With only 15 days remaining in the 2018 session, Thayer said he feels “very good” about the passage of Senate Bill 1.
Watch the interview segment with Sen. Thayer on pensions here:
Check back on The Bottom Line next week for more of the interview with Senate Majority Leader Damon Thayer on the budget, potential tax reforms, and other 2018 priorities to be passed in the final weeks of session next week.