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Committees Consider Major Changes to TRS Pension and TRS Care

On Monday, the Senate State Affairs and House Pensions Committee heard testimony on significant proposed changes to TRS in SB 1458 by Sen. Duncan and HB 1884 by Rep. Callegari.  While laying out the committee substitute, Sen. Duncan noted the importance of keeping the current defined benefit structure in place, ensuring the system is actuarially sound, and the need to give retirees a cost-of-living adjustment (COLA). Highlights of the committee substitute include the following proposed changes:

  • Pension Benefit – Rule of 80 would still apply, but creates a minimum retirement age of 62 without a reduction (5% reduction per year prior to age 62).  Provides a grandfather clause of August 31, 2014: age 50; Rule of 70; or 25 years of service.
  • Beginning in FY 2015, school districts would be required to pay 1 percent of minimum salary schedule on any TRS participating employee for whom the district is not contributing to Social Security.
  • Provide a 3 percent COLA for retirees who have been retired for 20 years or more, but only once the system is actuarially sound.  The COLA increase could not exceed $100 month. 
  • TRS-Care – Rule of 80 with a minimum retirement age of 62 to qualify for TRS-Care II or III. Provides a grandfather clause of August 31, 2014: Rule of 70 or 25 years of service.
  • Provides the employee contribution to rate to be at least 6.4 percent but not to exceed the state contribution rate of 6.9 percent.

Both chairmen acknowledged concerns from various stakeholder groups on the financial impact to school districts, employees, and the creation of a new minimum retirement age of 62 for TRS pension and TRS-Care benefits.  We anticipate additional discussions on this topic.

Immediate Action Needed!

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See the complete agenda. Watch the hearing live.

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