The House Personnel and Pension Committee voted to send SB 512 to the House floor for consideration by the full House of Representatives on November 8, 2011. The veto session has been extended to include another day on November 29, 2011.
House minority leader Tom Cross introduced amendments to SB 512 on November 7, 2011. The amendments largely correct some technical issues in the original proposed legislation. The amendments were, in part, designed with the help of TRS, in order to address concerns and unintended consequences identified by TRS. Below is a summary of the provisions that specifically impact teacher pension benefits.
• The effective date of the legislation will be July 1, 2013.
• The due date of your irrevocable election is January 1, 2013.
• The Tier I pension contribution will increase to 13.77% on July 1, 2013 and remain at that level thru June 30, 2016.
• The Tier I pension contribution will increase by a maximum of 2 percentage points to 15.77% on July 1, 2016. The maximum Tier I pension contribution is capped at 15.77%.
• The maximum salary for purposes of pension calculations will be set at $110,100 as of July 1, 2013. This salary cap will be indexed for inflation annually.
• Teacher contracts that require a school district to pay teacher pension contributions will be required to be re-negotiated on the issue of who will pay increased teacher pension contributions.
What does this all mean to you? It means you need to take action now whether you plan to retire in 2 years or 25 years. If you don’t, you will be letting the politicians and state government make your retirement plan for you.