Legislative Report

Report 09-29
August 14, 2009

LEGISLATURE ADJOURNS

The General Assembly adjourned on Tuesday, August 11, concluding the 2009 Session that convened on January 28th and lasted more than six months. The General Assembly will reconvene on May 12, 2010 unless there is a need for a special session before then.

There was a flurry of activity during the last few days of this session as the House and Senate worked to pass several key bills and the usual end-of-session measures. Two issues of importance to retirees were not acted upon before the General Assembly adjourned.

Cost-Of-Living Adjustment for Local Government Retirees

The House Appropriations Committee did not meet again to consider House Bill 934. This bill would have authorized the Board of Trustees of the Local Governmental Employees’ Retirement System (LGERS) to approve a 1.0% Cost-Of-Living Adjustment for local retirees that would be paid from undistributed gains available in the system.

Without the authority contained in House Bill 934, the Board of Trustees could not grant a COLA greater than the increase in the Consumer Price Index during the past year. The index had increased by only one-tenth of one percent during 2008. The Board approved this small COLA for local retirees in July and the increase went into effect with the July 25 pension payments.

The limitation on the Board of Trustees with regard to approval of COLAs is the product of a recent informal opinion from the Attorney General’s staff that interpreted a statute enacted in the early 1970s. In the written opinion, this section of the statutes was interpreted to require COLAs granted by the Board to match the increase in the Consumer Price Index if gains were available to cover the cost to the system. The Retirement Systems Division likely will seek legislative action on this law in 2010.

Comprehensive Study of State Retirement System and State Health Plan

The Department of State Treasurer supported legislation during the 2009 Session to authorize a comprehensive two-year study of the Teachers’ and State Employees’ Retirement System (TSERS) and the relationship with the State Health Plan. Two identical bills were introduced to establish this study  (SB 1060 and HB 862).

It is standard procedure for separate bills authorizing legislative studies to be incorporated as part of an omnibus studies bill ant the end of the session. The Treasurer followed this course but was not successful in having the study included in the Studies Act of 2009. The studies bill (House Bill 945) did not contain the TSERs study provisions when it gained final approval on August 11.

MANY THANKS TO OUR MEMBERS

We greatly appreciate all of the efforts by our members to promote the passage of legislation that was supported by our Association. Members were active in contacting their legislators through phone calls, letters, and e-mails. There is no substitute for polite contact by constituents to get the attention of our members of the Senate and the House. A big “thank you” to all who helped.

The September/October issue of our newsletter, Living Power, will carry a final summary of the 2009 Session of the General Assembly. Please contact us in the interim if you have any questions.