SS/SB 228 - This act creates a new retirement plan for any person who becomes a state employee for the first time on or after January 1, 2018, excluding uniformed members of the highway patrol. Under the new retirement plan, the life annuity for a member will be calculated by multiplying one percent of the final average pay of the employee and the years of service. The life annuity for a member of the General Assembly shall be an amount equal to one forty-eighth of the monthly pay for the member multiplied by the years of service. However, a member of the General Assembly cannot receive an annuity in excess of fifty percent of pay. For a statewide elected official the life annuity shall be an amount equal to one forty-eighth of the monthly pay multiplied by the years of service, and the statewide elected official cannot receive an annuity in excess of twenty-five percent of pay.
Cost-of-living adjustments (COLA) shall be made annually beginning twelve months after the annuity starting date as provided under current law. However, the COLA shall not be more than two percent of the annuity.
An employee is eligible for early retirement at the age of sixty-two and ten years of service. A vested former employee is not eligible for early retirement.
Members must work for the state for ten years to vest in the retirement system. However, if the plan reaches a funded ratio of ninety percent, then beginning January first of the following year and all years thereafter the required creditable years of service to vest will be lowered to five years for current and new members.
Members also must participate in a defined contribution plan. The employer must contribute two and three quarters percent of payroll to the plan and the member must contribute one percent of his or her pay. Members must have five years of creditable service in order to retain one hundred percent of the employer contributions. Members with less than five years of service will forfeit portions the employer contributions as provided in the act.
This act is substantially similar to HB 1591 (2016).