Retirement Update

I just wanted everyone to be made aware that 3 of the 4 retirement bills that Senator Liljenquist is proposing are now online. I have linked the information below for your information.

SB0042 Retirement Eligibility Modifications - Liljenquist, D.
SB0043  Post-retirement Employment Amendments - Liljenquist, D.
SB0094  Supplemental Benefit Amendments for Noncontributory Public Employees - Liljenquist, D.

If you have any questions, please contact UPEA at (801) 264-8732.

Retirement Proposal

The UPEA State Board arranged a meeting with Senator Liljenquist and retirement system stakeholders, including the Utah School Employees Association, Utah Education Association, and Cops United for Retirement Equity. Liljenquist discussed potential legislation at the January 4th meeting and answered questions about changes to the retirement system. His proposed legislation should amount to four bills.

His first bill would require employees hired after July 1st, 2011 to either a)contribute 8% into a 401(a) plan administered by URS or b) go to a hybrid defined benefit/defined contribution plan. The new defined benefit component is expected to cost 5% of the 8% total retirement contribution. This would be a contributory system with a 35 year minimum retirement, 1% service credit per year, with a 5 year final average salary calculation.

His second bill would eliminate the 1.5% salary contribution into current employees’ 401(k) and put that money into the pension system to help address the current 2.1% contribution rate increase.

His third bill would increase the years of service for retirement using the following schedule:
Employees in the big retirement system

• 24-30 years of service would see no change
• 20-24 years of service would be eligible to retire after 31 years
• 16-20 years of service would be eligible to retire after 32 years
• 10-16 years of service would be eligible to retire after 33 years
• 4-10 years of service would be eligible to retire after 34 years
• Less than 4 years of service would be eligible to retire after 35 years

For Public Safety/Firefighters/Judges would also increase the retirement service.

• 18-20 years would see no changes
• 15-18 years of service would be eligible to retire after 21 years
• 12-15 years of service would be eligible to retire after 22 years
• 9-12 years of service would be eligible to retire after 23 years
• 6-9 years of service would be eligible to retire after 24 years
• Less than 6 years would be eligible to retire after 25 years

His fourth bill would change the benefits for retired rehired employees. This bill would require suspension of the pension payments upon rehire, but allow rehired employees to earn additional service credit and also require the employer to pay the full URS contribution rate into the retirement system. This would also remove the service cap for public safety, which is currently 30 years.

UPEA is working toward a better solution that will keep retirement whole for all employees. UPEA has also called for an independent actuarial analysis and more time to educate stakeholders on the issue.