Early Retirement Incentive
Our early retirement incentive is still alive and has a chance of passing in this legislative session. The retirement incentive is contained in Omnibus Pension bill #1. It has passed all of the Senate committees. The bill passed out of the House Government Operations Committee on Tuesday. Our problem will be in the House or in a conference committee that will take place. Members can call their legislators or e-mail them asking them to support Senate File 2239, or specifically the early retirement incentive, that provides for up to $17,000 incentive to employees who may be subject to layoff.
Defined Contribution vs. Defined Benefit
As supervisors may know, MSRS-covered employees are in a defined benefit retirement program. An amendment was put on to House File 2833 a few days ago that would have required a study by the commissioner of Employee Relations and the Legislative Commission on Pensions and Retirements to look at the value of defined benefit retirement vs. defined contribution. Note: the amendment was taken off yesterday. Defined contribution retirement plan, i.e., 401k-type plan, is what is normally found in the private sector. This creates an individual retirement plan where an employee invests their money and possibly some of the employer’s money in investments of their choice. When markets are good, employees see their portfolio values increase; when the market goes south, these values can evaporate. State employees are under a system that guarantees a certain retirement benefit for life based on their years of service, high five average salary, and a formula that creates the lifetime annuity. Nationwide, many employers are moving from a defined benefit to a defined contribution plan simply because it is cheaper to do so and lessens the liability on the employer. Defined contribution puts the responsibility and liability for your retirement on you. If you are lucky and make good investments and the market is positive, you may do well. If it doesn’t, you may do poorly. Middle Management Association is part of a public employees pension coalition group that is meeting monthly to put together facts with regard to defined benefit vs. defined contribution plan. We are considering funding a poll to determine what the general public feels about retirement plans for public employees. The Legislature at some point in time is going to be looking at this issue and certainly there will be pressure to move public employees to a defined contribution plan. We oppose this move because defined contribution plans are not in the best interest of public employees.
Organ Donation
Middle Management Association had an organ donation bill, House File 3217, introduced by Rick Hanson (former Board member) because one of our members, and former Executive Committee member, is scheduled to receive a transplant. There was past legislation that sunsetted about four years ago that provided up to 40 hours of leave for a state employee who becomes a donor for another person. House File 3217 allows all public employees up to 40 hours of paid leave for organ donation. That bill has passed out of all committees in the House and Senate and will now go to the floor. We believe this is good public policy and costs the state very little.
Health Care Purchasing
Middle Management Association has been following Senate File 2241 and House File 2438 that would centralize the purchasing of health care within state government. A study was commissioned in the last session that required state agencies that purchased health insurance, namely DOER, Administration, Health, DHS, and Corrections, to look at the feasibility of combining purchasing under one authority. The initial legislation authored by Senator Kiscaden, would have put the authority for purchasing with the Department of Administration. After a number of meetings and letters from DOER, the bill now would give DOER the purchasing authority and an oversight position in DOER that would monitor and coordinate the purchasing in other departments. We think this is the proper place for this position and believe that it would not have made sense to take state employee health care purchasing out of DOER and put it into another department, thereby consolidating all of health care purchasing under that department. At this point it looks like DOER will be the central authority for the coordination of other departments’ health care purchasing.
Return To Archives
