BIPPS pension reform ideas move forward in the General Assembly

As lawmakers returned to Frankfort for Part 2 of the 2021 legislative session, pension reform topped the list of their priorities.

BIPPS’ pension ideas regarding both a new Teachers’ Retirement System (TRS) hybrid plan for new teachers and our solutions to ease the skyrocketing pension costs for quasi-governmental agencies easily passed the House State Government Committee on Thursday.

House Bill 8, sponsored by Rep. Jim Duplessis, R-Elizabethtown, was an updated version of a bill passed unanimously in the House last session but which met a premature end in the Senate with the onset of the COVID-19 pandemic. This bill includes our proposal to stop the practice of forcing quasi agencies to make disproportionally higher payments than their individual liabilities by basing quasi-agencies’ payments on liabilities specific to them which are much lower than the Annual Required Contribution (ARC) payments into the state workers’ pension system. The solution, which  was praised by the National Institute on Retirement Security this winter, moves on to a full floor vote in the House.

Sponsored by Rep. Ed Massey, R-Hebron, House Bill 258 incorporates BIPPS’ approach to improving the TRS plan for new teachers by offering a defined benefit component while protecting taxpayers with a defined-contribution element. The bill, projected to save taxpayers $3.57 billion over the next 30 years while paying out more than Social Security would to retired teachers, passed the House with a 68-28 floor vote and moves on to the Senate.