|Date Requested:February 23, 2005
Time Requested:02:54 PM
| FUND(S) |
PERS fund 2510
Sources of Revenue
Legislation creates:Neither Program nor Fund
Effect this measure will have on costs and revenues of state government.
| Actuarial Note Regarding Pension Legislation
The Bill clarifies existing statute to provide that lump sum leave cashed out prior to retirement is not to be included in determining final average pay for benefits and does not require member nor employer contributions on such lump sum payments. The bill further clarifies that this provision does not apply to the Death, Disability and Retirement Plan A for State Police since benefits under Plan A are based on total compensation received, not final average compensation.
Administration for PERS has interpreted current statues to be consistent with the clarification and does not represent a change in benefits previously provided under PERS. Litigation currently outstanding provides an alternative interpretation of existing statues that if upheld, would increase liabilities under PERS in excess of $100,000,000. This Bill is intended to prevent the litigation results from impacting future PERS members.
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||0||0|
|Repairs and Alterations||0||0||0|
|2. Estimated Total Revenues||0||0||0|
3. Explanation of above estimates (including long-range effect):
Current litigation in regards to inclusion of lump sum leave payments in final average pay calculations for PERS, if upheld, would modify current calculations and increase benefits for certain non-state agency employers in PERS. This bill is intended to clarify the provisions to eliminate the alternative interpretation of statutes central to the litigation.
If the Bill is not passed and the litigation is resolved in favor of the plaintiffs, then an increase in PERS liabilities on an ongoing basis will result. This bill is intended to prevent this increase in PERS liabilities for future members of PERS.
|Not enacting this Bill could result in increased liabilities and benefits under PERS due to the results of pending litigation.|