X hits on this document





53 / 135

The Christie Reform Agenda includes the following:

  • Employee contribution rates vary across retirement systems, from a low of 3% to 8.5%. Governor

Christie’s reforms will align the rates at a uniform 8.5%.

Many states are reducing pension liabilities by lowering or eliminating cost of living adjustments (COLAs) for current retirees, or eliminating them only for current and future employees who have not yet retired. For example, Colorado reduced its 2010 COLA from 3.5% to 0% with a rate of 2% starting in fiscal year 2011. Minnesota reduced COLAs from 2.5% to 1% to 2% depending on the fund, and South Dakota made a 1% reduction in 2010 and tied COLAs in future years to investment performance.

This change will require the use of an employee’s average annual salary over the highest 5 years, rather than highest 3 years for PERS, TPAF, and to the highest 3 years from 1 year for SPRS and PFRS, when calculating final retirement payout.

  • Raise the retirement age to 65 for normal and early retirement for TPAF and PERS members, and

  • Requiring 30 years of service for TPAF and PERS members to qualify for early retirement or SPRS and PFRS members to qualify for “special” retirement at 65% of final pay.

  • Adjusts the benefit calculation for future service of TPAF and PERS members to N/65 (years of service divided by 65) from the current N/55 and rescinds the 9% benefit increase for all future earned credit in the pension systems. The 9% increase was enacted in 2001 without any way to pay for it. It will also match the benefit formula to the proposed new retirement age. This change is not retroactive and will not affect prior service earned by current employees.

  • Adjust the anticipated rate of return used by the Pension Fund from 8.25% to 7.5% to reflect a more realistic picture of today’s investment climate; and

  • Move the amortization methodology from a percentage of pay schedule (which defers the retirement of any unfunded liability) to a level dollar amount each year in order to retire part of our unfunded liability earlier.

  • Better define the qualification standards to address the growing abuse of accidental disability



Document info
Document views299
Page views299
Page last viewedThu Oct 27 11:41:57 UTC 2016