HB 1033 -- LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM

This bill makes several changes to the Local Government
Employees' Retirement System (LAGERS).  The bill changes the
percentages on which reduced benefits are calculated under 3 out
of 4 options for those whose first payment is due on or after
October 1, 1998.  Currently under Option A, a retirant receives
80% benefits which are adjusted up or down based on the number
of years older or younger the beneficiary is than the retirant.
The bill increases this option to 85% benefits, retaining the
adjustment formula.  Current Option B uses an 85% basis; the
bill changes this to 90%.  Option C currently uses a 90% basis;
the bill raises this to 95%.  If a former member dies before his
or her retirement date, is entitled to a deferred retirement
allowance, and has not received a lump sum payment, the former
member's surviving spouse is entitled to an allowance.  The
allowance will be computed as though the former member had
survived to minimum retirement age and retired based on credited
service and final average salary at the time of termination of
membership, chosen option A, and designated the spouse as a
joint beneficiary.  A surviving spouse under age 40 is limited
to 120 months of such benefit.  Currently, the system may pay
the reserve value of an allowance not exceeding $3,500; the bill
allows for the payment of reserve value on a deferred allowance
if the former member has less than 10 years of credited service
and is more than 10 years from minimum retirement age.  Under
this bill, a former member entitled to a deferred allowance must
make application no earlier than 90 days before early retirement
age; a limitation specifying that no application could be made
more than 10 years after minimum service retirement age has been
dropped.

HB 1033 -- LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM
(Franklin)

This bill makes several changes to the Local Government
Employees' Retirement System (LAGERS).  The bill changes the
percentages on which reduced benefits are calculated under three
out of four options for those whose first payment is due on or
after October 1, 1998.  Currently under Option A, a retirant
receives 80% benefits which are adjusted up or down based on the
number of years older or younger the beneficiary is than the
retirant.  The bill increases this option to 85% benefits,
retaining the adjustment formula.  Current Option B uses an 85%
basis; the bill changes this to 90%.  Option C currently uses a
90% basis; the bill raises this to 95%.  If a former member dies
before his or her retirement date, is entitled to a deferred
retirement allowance, and has not received a lump sum payment,
the former member's surviving spouse is entitled to an
allowance.  The allowance will be computed as though the former
member had survived to minimum retirement age and retired based
on credited service and final average salary at the time of
termination of membership, chosen option A, and designated the
spouse as a joint beneficiary.  A surviving spouse under age 40
is limited to 120 months of such benefit.  Currently, the system
may pay the reserve value of an allowance not exceeding $3500;
the bill allows for the payment of reserve value on a deferred
allowance if the former member has less than 10 years of
credited service and is more than 10 years from minimum
retirement age.  Under this bill, a former member entitled to a
deferred allowance must make application no earlier than 90 days
before early retirement age; a limitation specifying that no
application could be made more than 10 years after minimum
service retirement age has been dropped.

FISCAL NOTE:  No impact on state funds.

HB 1033 -- LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM

CO-SPONSORS:  Franklin, Leake

COMMITTEE ACTION:  Voted "do pass by consent" by the Committee
on Retirement by a vote of 10 to 0.

This bill makes several changes to the Local Government
Employees' Retirement System (LAGERS).  The bill changes the
percentages on which reduced benefits are calculated under three
out of four options for those whose first payment is due on or
after October 1, 1998.  Currently under Option A, a retirant
receives 80% benefits which are adjusted up or down based on the
number of years older or younger the beneficiary is than the
retirant.  The bill increases this option to 85% benefits,
retaining the adjustment formula.  Current Option B uses an 85%
basis; the bill changes this to 90%.  Option C currently uses a
90% basis; the bill raises this to 95%.  If a former member dies
before his or her retirement date, is entitled to a deferred
retirement allowance, and has not received a lump sum payment,
the former member's surviving spouse is entitled to an
allowance.  The allowance will be computed as though the former
member had survived to minimum retirement age and retired based
on credited service and final average salary at the time of
termination of membership, chosen option A, and designated the
spouse as a joint beneficiary.  A surviving spouse under age 40
is limited to 120 months of such benefit.  Currently, the system
may pay the reserve value of an allowance not exceeding $3500;
the bill allows for the payment of reserve value on a deferred
allowance if the former member has less than 10 years of
credited service and is more than 10 years from minimum
retirement age.  Under this bill, a former member entitled to a
deferred allowance must make application no earlier than 90 days
before early retirement age; a limitation specifying that no
application could be made more than 10 years after minimum
service retirement age has been dropped.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that the bill makes small increases
in benefits for members choosing an option that includes their
spouse in their benefits by changing the actuarial equivalent
for optional forms of retirement, based on updated factors.  The
bill does not increase employer contributions.

Testifying for the bill were Representative Franklin; and Local
Government Employees' Retirement System.

OPPONENTS:  There was no opposition voiced to the committee.

Becky DeNeve, Legislative Analyst

HB 1033 -- Local Government Employees' Retirement System

Co-Sponsors:  Franklin, Leake

This bill makes several changes to the Local Government
Employees' Retirement System (LAGERS).  The bill changes the
percentages on which reduced benefits are calculated under three
out of four options for those whose first payment is due on or
after October 1, 1998.  Currently under Option A, a retirant
receives 80% benefits which are adjusted up or down based on the
number of years older or younger the beneficiary is than the
retirant.  The bill increases this option to 85% benefits,
retaining the adjustment formula.  Current Option B uses an 85%
basis; the bill changes this to 90%.  Option C currently uses a
90% basis; the bill raises this to 95%.  If a former member dies
before his or her retirement date, is entitled to a deferred
retirement allowance, and has not received a lump sum payment,
the former member's surviving spouse is entitled to an
allowance.  The allowance will be computed as though the former
member had survived to minimum retirement age and retired based
on credited service and final average salary at the time of
termination of membership, chosen option A, and designated the
spouse as a joint beneficiary.  A surviving spouse under age 40
is limited to 120 months of such benefit.  Currently, the system
may pay the reserve value of an allowance not exceeding $3500;
the bill allows for the payment of reserve value on a deferred
allowance if the former member has less than 10 years of
credited service and is more than 10 years from minimum
retirement age.  Under this bill, a former member entitled to a
deferred allowance must make application no earlier than 90 days
before early retirement age; a limitation specifying that no
application could be made more than 10 years after minimum
service retirement age has been dropped.