An amended early-retirement bill which has had rough going over the course of the last year or so was vetoed by Gov. Charles W. Turnbull this weekend.
The bill, sponsored by Sens. Almando "Rocky" Liburd, David Jones and Donald "Ducks" Cole, had made a number of appearances in the Senate Committee on Government Operations before it was finally approved by the full Senate in September and sent to the governor.
In a letter to Senate President Vargrave Richards, Turnbull said "It is with a deep sense of reluctance that I hereby veto . . . this bill." The governor explained that what he called "killer amendments" led to the bill's demise.
Formally known as the Public Employees Voluntary Retirement Incentive Act of 2000, the bill would have allowed government employees to leave service early and "buy" their remaining time through a system of advance credits by contributing a percentage of their annuity over their remaining years.
The governor had proposed a retirement measure of his own earlier this year. He said while the initial Senate bill in some ways incorporated provisions of his bill and was "viewed as something this administration could have worked with," the amendments "killed its chances."
The governor pointed to a provision for "handicapped members" who are not otherwise defined, and an increase of pension benefits from 2.5 percent to 2.66 percent, which would increase the annual pension benefit obligations by more than $42.3 million.
"These provisions are unconscionable and serve to irreparably injure the system," Turnbull said, adding that the amended bill would bring the Government Employees Retirement System "closer to the brink of insolvency," increasing unfunded liabilities by more than $100 million.
In a release accompanying the letter to Richards, the governor stated that no "in-depth analysis" to determine the "fiscal impact" of the amendments was done, and that GERS had not been consulted about it.
Corrine King, GERS board chairwoman, has been consistent in her objections to the bill since May 1999.
In her fourth appearance before the committee on Aug. 30, King noted that GERS has provided cooperation and assistance to the bill's sponsors, including the assistance of GERS actuary Howard Rog. However, she said, the board wanted to avert another legislative incursion into the retirement fund by way of an unfunded legislative mandate.
She noted that Liburd had assured the board he could get the financing, but said that "to date, GERS has been unable to obtain positive assurances . . . that the $15 million (the measure would cost) would be forthcoming to GERS."
She also criticized both the legislative and executive branches for failing to discuss repayment of the outstanding unfunded liability owed GERS, calling it a "bitter pill."
In her 29-page statement, King concluded GERS could not support the bill. Early-retirement problems are expensive propositions, she said, because "historically, they purport to give away benefits for which the GERS has not been fully compensated."
Echoing Turnbull's comments, King said, "It is irresponsible to legislate enhanced benefit programs which are not fully funded, because . . . irreparable harm falls upon GERS, its members and beneficiaries."
Turnbull, in his letter to Richards, concluded, "The veto cannot end this effort. I am committed to the passage of a workable retirement incentive bill." The governor noted that money was put aside in the $300 million bond issue for this purpose.
He said he was confident a revised incentive bill can be passed which will not have "so adverse an impact on the retirement system." He said he will be calling a special session of the Legislature within the next few days to consider a revised version of the retirement bill.
