HB 1324: Gain-sharing provisions

Summary

• Repeals Plan 1 gain-sharing in the Public Employees' Retirement System (PERS) and the Teachers' Retirement System (TRS), and replaces it with four contractually-guaranteed benefit increases: a 20-cent increase in the Annual Increase, an extension of eligibility for the $1,000 minimum benefit to members who have 20 years of service and have been retired for 25 years, an annual increase of the $1,000 minimum benefit by 3% per year, and an extension of the Annual Increase to all members retired for one year in the year that they turn 66.
• Modifies Plan 3 gain-sharing to remove future PERS and TRS Plan 3 gain-sharing distributions and replaces the SERS Plan 3 gain-sharing distribution formula with an annual benefit to SERS Plan 3 member accounts of $10 per year of service.
• Creates a prospective "Rule of 90" retirement formula that permits PERS, TRS, and the School Employees' Retirement System (SERS) Plan 2 and 3 members with a combination of age and years of service of at least 90 to receive an unreduced retirement allowance beginning at age 60.
• Opens TRS and SERS Plan 2 as an option for new members, and repeals the statutes providing an annual opportunity to change employee contribution rates in TRS, PERS, and SERS Plan 3.
• Establishes annual basic contribution rates in PERS, TRS, and SERS for the next four fiscal years, in place of biennial rates.
• Establishes minimum employer and state contribution rates for PERS, SERS, and TRS beginning in 2009.

From the House Bill Analysis (HB 1324), written by the Legislature's nonpartisan staff. Read the full report ↗