Provides for a five-year Deferred Retirement Option Plan for certain members of the Firefighters' Retirement System (OR INCREASE APV)
Impact
The passage of HB 20 is projected to have significant fiscal and actuarial implications. Primarily, it is expected to increase the actuarial costs related to pensions as more funds would need to be allocated for extended benefits. Although the bill could potentially incentivize newer members to delay entry into DROP, the analysis suggests that the costs associated with existing members would outweigh any savings generated. The increased payments to members in DROP would likely lead to a higher unfunded liability for the retirement system, prompting potential increases in employer contribution rates in the future.
Summary
House Bill 20 proposes to extend the Deferred Retirement Option Plan (DROP) for members of the Firefighters' Retirement System who have a minimum of 27 years of service. Under current law, members can remain in DROP for a period of three years, but HB 20 allows them to stay for an additional two years, totaling five years. This change is aimed at providing more flexibility for long-serving firefighters, enabling them to continue working, while still accruing pension benefits during the extended period in DROP.
Sentiment
The sentiment toward HB 20 appears to be mixed among legislators and stakeholders. Supporters argue that the bill provides necessary support for long-serving firefighters, acknowledging their commitment and extending their benefits in a fair manner. Conversely, some Legislative analysts and budget authorities express concerns regarding the long-term financial sustainability of the retirement fund, suggesting that the increased costs could lead to budgetary strains and potentially impact the funding of other important public services.
Contention
A point of contention surrounding HB 20 relates to the balance between providing adequate retirement benefits for public safety officials and ensuring the financial health of the retirement system. Critics argue that the extended DROP plan could place unsustainable financial burdens on the retirement system, potentially leading to higher costs for taxpayers and reductions in available funds for other services. Supporters contend that providing these benefits is essential for retaining experienced firefighters, who play a crucial role in community safety and emergency response.
Provides for a five-year deferred retirement option plan for certain members of the Firefighters' Retirement System and provides relative to retirement benefits of certain probation and parole officers in the office of adult services in the Department of Public Safety and Corrections
Allows members of the Firefighters' Retirement System to allocate Deferred Retirement Option Plan funds between two separate interest bearing accounts (EN NO IMPACT APV)
Provides relative to the administration and participation in the Deferred Retirement Option Plan for the Firefighters' Retirement System (EN SEE ACTUARIAL NOTE APV)