Proposed TRS Pension Bill: Here's how it can improve

State Reps. Scott Lewis, R-Hartford, and Travis Brenda, R-Cartersville, have introduced a bill to make changes to the Teachers' Retirement System. While we support parts of the proposal, it needs to be strengthened in order to address the issues needed to ensure a stable and secure retirement plan for future teachers. Below is our list of recommendations to ensure HB 504 contains the kind of strong policy that results in real reform:

Mandatory

1. Benefits:

• 1.7% benefit factor for years of service 1-10
• 2.0% benefit factor for years of service 11-20
• 2.3% benefit factor for years of service 21-30
• 3.0% benefit factor at age 55, indexed to normal retirement eligibility
• Benefit factors do not apply retroactively to past service

2. Prohibit future retroactive benefit enhancements

3. Adjustments to retirement eligibility will be made in 3-6-month increments and will not apply to members who are eligible to retire within one year of the change. For example, if the TRS board and actuaries determine that retirement eligibility needs to increase by one full year, this change will be implemented over a 2-4-year period.

Optional

1. Benefits:

• 3.0% benefit factor for years of service over 30
• Benefit factors do not apply retroactively to past service
• Only applies to those who achieve 30 years of service prior to age 55/normal retirement eligibility, therefore may not be an effective incentive for retention

2. Payroll contribution rates:

• Reduce employer payroll contribution to foundational plan from 8% to 7% (no less than 6%)
• Reduce employer payroll contribution to supplemental plan from 2% to 1%
• Employer’s normal cost is 3% of payroll, therefore contribution rates are more than adequate
• TRS would be better served with additional contributions to the existing pension fund

3. Implement HB 504 with amendments by July 1, 2019

• 5-year vesting allows plan to be implemented immediately