House Appropriations leaders and subcommittees worked through the week to complete the House 2007-09 budget proposal. Formal presentation of the budget proposal to the full House Appropriations Committee should occur next week.
On Thursday, the Appropriations subcommittees released budget recommendations and proposed special provisions. Decisions regarding compensation increases for active employees and COLAs for retired employees are made by the eight co-chairmen of the full House Appropriations Committee. These recommendations should be announced next week.
We have received many inquiries from members regarding the status of the various bills introduced during this Session to modify the statutes that govern the re-employment of retired teachers, state and local government employees. Following is a summary of the major bills in this area.
House Bill 34: Remove Earnings Cap
This bill would remove the 50% annual earnings cap that currently applies to retired state government employees who are re-employed by any agency or unit that participates in the Teachers’ and State Employees’ Retirement System. Retired state employees would be allowed to return to work after a six-month separation from service at full salary and without loss of retirement benefits.
The bill was referred to the House Rules Committee and has not yet been scheduled for consideration.
House Bill 213: Remove Local Retirement Earnings Cap
The bill repeals the 50% annual limitation on earning of local governmental retirees who return to work with any local government that participates in the Local Governmental Employees’ Retirement System. Retired local employees would be allowed to return to work following a one-month separation from service at full salary and without loss of retirement benefits.
House Bill 237: Retirees Returning to Work
This bill proposes a number of significant changes to the statutes governing the re-employment of members of the Teachers’ and State Employees’ Retirement System (TSERS). These changes are described below.
1.) The bill would establish “normal retirement age” as age 60 with 25 or more years of service or age 65 with a minimum of 5 years of service.
2.) Members who retire at or beyond “normal retirement age” would be allowed to return to work with no break in service.
3.) Members who retire before “normal retirement age” would be allowed to return to work after a minimum separation from service of 25 working days.
4.) The bill maintains the 50% salary cap for all state retirees except teachers who are re-employed on a part-time, interim, temporary, or contractual basis.
5.) The sunset date of July 1, 2007 on the exemption allowing retired public school teachers to return to work at full salary with no loss of retirement benefits is repealed, making this exemption permanent.
House Bill 237 was discussed by the House Pensions and Retirement Committee at a regular meeting on April 11. However, the bill failed to receive a favorable report due to concerns about negative impacts on the TSERS. The bill has been sent to a subcommittee for further refinement.
House Bill 956: Retired Teachers Work
The bill extends the sunset on the special exemption allowing retired public school teachers to return to work without loss of retirement benefits from the current June 30, 2007 to October 31, 2009.
The bill received a favorable report from the Pensions and Retirement Committee on April 24 and was re-referred to the Appropriations Committee.
Senate Bill 70: Hiring of Retired Teachers
This bill removes the sunset on the exemption for re-employed teachers and directs the Retirement Systems Division to study innovative programs to re-employ retired teachers.
The bill was assigned to the Senate Education Committee and has not yet been scheduled for consideration.
