HF2821

Purpose of the Bill

The bill aims to modify the conditions under which additional employer contributions to the Public Employees Retirement Association's (PERA) general employees retirement plan are repealed. It also seeks to increase postretirement adjustments.

Main Provisions

• Modification of Employer Contributions: The bill mandates additional employer contributions to the general employees retirement fund of PERA. These contributions are based on a specified percentage of the total salary of basic members and coordinated members in the retirement plan.
• Adjustment in Contribution Rates: The bill outlines historical changes in the contribution rates, noting that previous rates from before January 1, 2006, would remain effective until adjusted in subsequent years, with significant increases beginning January 1, 2010.
• Condition for Repeal: The bill modifies the conditions for repealing the additional employer contributions. It specifies that the contributions will continue until the actuarial value of the plan's assets meets or exceeds 98% of the plan’s liabilities. Once this financial goal is reached, the additional contributions will cease, taking effect on the first full pay period after the specified date.

Significant Changes

• This bill increases the threshold for when the additional employer contribution can be repealed. Previously, contributions could be halted under different conditions; now they persist until the plan's assets reach the specified percentage of liabilities.
• The increase in postretirement adjustments implies a more favorable condition for retirees, enhancing their financial security post-retirement.

Relevant Terms

public employees retirement, employer contribution, PERA, retirement plan, actuarial valuation, postretirement adjustments