At a “stakeholders” meeting this after noon (3/21) in the Senate, details of SB1609 were shared.  All of us in attendance learned that an agreement had been worked out between the House and Senate and as a result, the Senate bill would be the bill that continues to move through the legislative process.  The bill will be heard tomorrow afternoon in the House Committee on Employment and Regulatory Affairs.  An amendment merging some of the provision of HB2726 (Speaker Adams’ bill) will be introduced in committee.  The following are some of the changes that will be a part of the final bill.




The COLA is based on a market value assumption.  This is important because the existing Excess Earnings Fund will be able to pay out a COLA for the next two years but after that it may 15-20 years before another COLA is issued.

Employees will be expected to pay 11.65% contribution rate in three years.  No reduction in this rate is delineated.

Drop is eliminated for those with 5 years or less service.  Those between 5-20 years will have to pay contributions into the fund when they enter DROP with interest rates dropping on these accounts.  Those with 20 years of more service no change in DROP.

Return to work – Penalty payment assessed.


No changes to the current structure and mechanism of the COLA.

No changes to the structure of the employee/employer contribution rate.

The return to work alternate contribution rate (ACR) will take effect on July 1, 2012

Eliminates the points system for new hires after July 1, 2011.  “Normal retirement” will be age 65 or 62 and 10 years of service.

Other Issues For ALL


Commission of a class five felony (not conviction) – pension is forfeited

Military and in-state service – prior service purchase restriction (purchase must be initiated before the bill takes effect)


They are also going to study disability payments to all persons so classified in the next two years.  This means there is a possibility that disability pensions will be targeted in the future for reduction or elimination.  The study will also examine defined contribution options, the definition of compensation, consolidation of local boards, and merging 401(a) Plan options.

It is expected that the bill will pass out of the committee.  Although committee members may not agree with the bill (as was the case with HB2726), there will more than likely be enough “aye” votes to pass it on.  If that is the case, it will move to House Rules, then onto the Caucus and COW.

You are urged to not only contact the committee members before the hearing at 2:00 p.m., but also contact the Representative within your legislative district.  You can click HERE to find your legislative district and Representative.

I will be at the hearing to speak in opposition to the bill.

– Jimmy Chavez

FOLLOW-UP: The bill was voted through the House Committee of Employment & Regulatory Affairs.  Watch Jimmy’s testimonial at 2:38:00 by CLICKING HERE.

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