Legislative Report

Report 10-04
May 28, 2010

HOUSE SCHEDULES BUDGET ADOPTION

The subcommittees of the House Appropriations Committee worked through the week to finalize recommendations for consideration by the full committee next week. The House is expected to complete budget adoption by next Friday, June 4.

There will be significant differences between the budget for 2010-11 that has been approved by the Senate and the House version that will go before the House Appropriations Committee on Wednesday. We expect that a joint conference committee to resolve these differences will be appointed and begin work during the week of June 6.

STILL TIME FOR CONTACT

We will know next week whether the House was able to fund the Annual Required Contribution (ARC) for the Teachers and State Employees Retirement System. The ARC for 2010-11 I requires an additional $181 million. There are unofficial indications that the House budget will contain more money for this purpose than was appropriated in the Senate budget, but the amount still will fall short of $181 million.

We ask again that you contact members of the House if you have not already done so to let them know how important this funding is to the Teachers and State Employees Retirement System (TSERS). Please refer to our Legislative Report of May 21st (Report 10-3) for a few helpful talking points on this issue.

THANK YOU

We wish to express our thanks to all of you who have contact state legislators in the past week. Also, we appreciate your participation in the May 24th public hearing that was conducted by the House Appropriations Committee. Several members offered live testimony and several members submitted written comments for the record. The Association testified at the Raleigh site and submitted a written statement as well.

THE SHAPE OF THINGS TO COME?

Legislation was introduced this week that would make sweeping changes in the state retirement system and the State Health Plan that would affect future state employees and teachers. Please note that all of these changes would apply only to employees hired on or after January 1, 2011 and would not affect anyone currently retired.

Senate Bill 1450 was introduced this week by Senator Linda Garrou. This bill would establish a normal retirement age of 60 years for the Teachers’ and State Employees’ Retirement System. Employees still could retire prior to age 60 but would do so with a reduced pension.
The bill also changes the contributory status of the State Health Plan. Employees hired on or after January 1, 2011 would pay a portion of the plan cost through monthly premiums for Individual coverage. The bill does not currently specify the percentage that would be paid by the employee.

Senate Bill 1450 has been referred to the Committee on Pensions, Retirement, and Aging.