Thursday, May 23, 2013

Legislative Update on Cash Balance Plan Bills

Yesterday, the Senate voted 35-0 to suspend implementation of the current Cash Balance Plan (CBP) which was passed during the 2012 Legislative Session. The CBP was to go into effect July 1, but with the unanimous passage of HCR 2 (Harrison), it will be delayed until July 1, 2014. The LASERS Board of Trustees supported suspension of the plan until the Internal Revenue Service can make a determination on the equivalency of the plan to Social Security.

HB 729 (Pearson) which is a substitute bill for HB 68 (Pearson) was scheduled to be heard yesterday on the House floor. However, it was returned to the calendar and is subject to call. This bill recreates the Cash Balance Plan and places a 10 percent cap on interest which can be earned by the members. The LASERS Board opposes this measure due to the lack of retirement security offered to members who have no Social Security safety net and the failure of the legislation to address many of LASERS administrative concerns.

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