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GERS Contribution Rates Could Soar for Some Government Employees

Sen. Alicia "Chucky" Hansen was the committee's lone "no" vote on Wednesday.Legislature and Judiciary employees’ retirement contributions will go from 11 to 15 percent if a bill approved in committee Wednesday becomes law. However, larger increases are needed to make the system solvent, GERS officials testified Wednesday before the Government Operations Committee.

The bill before the Legislature codifies proposals approved by the GERS Board of Trustees some time back; and since then the retirement system’s fiscal situation has deteriorated further, GERS Administrator Austin Nibbs said. To be solvent over the long run, "the actuary is presently looking at 20 percent" as the employee contribution, Nibbs said.

Several senators said they were uncomfortable with any contribution increases, suggesting GERS should be able to make up the shortfall by taking riskier and potentially more lucrative investment gambles with GERS contributions.

"We are robbing Peter to pay Paul and I’m not too sure I like that," Sen. Ronald Russell said. More lucrative investments "could make up the difference," Russell said.

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If contribution rates must be increased, "why has the board not raised rates when it is in their authority to do so?" Sen. Usie Richards asked Nibbs. The board can raise contributions up to 3 percent every five years, and he has told both the board and the Legislature what his recommendations are, Nibbs said. "I cannot give a definitive reason as to why they have not [increased rates]," he said.

Under the terms of the bill, employees will also be able to purchase up to five years of service, increasing their retirement annuities by paying all the contributions and other GERS costs in advance of retiring.

In addition to paying what would have been paid in pension contributions, the employee seeking to purchase a larger pension than justified by the number of years they actually worked would have to pay any interest or capital gains the money they contribute would have earned had it been collected over time.

Voting to send the GERS reform bill on to Rules and Judiciary Committee for further consideration were: Richards, Russell, Sens. Janette Millin-Young, Celestino White and Alvin Williams. Sen. Alicia "Chucky" Hansen voted nay, and Sen. Terrence "Positive" Nelson was absent.

The committee also sent forward a bill expanding the use of the federal write-in absentee ballot, authorizing late voter registration for recently discharged military personnel and banning election board members who are running for other elected office from participating in board decisions.

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Sen. Alicia "Chucky" Hansen was the committee's lone "no" vote on Wednesday.Legislature and Judiciary employees' retirement contributions will go from 11 to 15 percent if a bill approved in committee Wednesday becomes law. However, larger increases are needed to make the system solvent, GERS officials testified Wednesday before the Government Operations Committee.

The bill before the Legislature codifies proposals approved by the GERS Board of Trustees some time back; and since then the retirement system's fiscal situation has deteriorated further, GERS Administrator Austin Nibbs said. To be solvent over the long run, "the actuary is presently looking at 20 percent" as the employee contribution, Nibbs said.

Several senators said they were uncomfortable with any contribution increases, suggesting GERS should be able to make up the shortfall by taking riskier and potentially more lucrative investment gambles with GERS contributions.

"We are robbing Peter to pay Paul and I'm not too sure I like that," Sen. Ronald Russell said. More lucrative investments "could make up the difference," Russell said.

If contribution rates must be increased, "why has the board not raised rates when it is in their authority to do so?" Sen. Usie Richards asked Nibbs. The board can raise contributions up to 3 percent every five years, and he has told both the board and the Legislature what his recommendations are, Nibbs said. "I cannot give a definitive reason as to why they have not [increased rates]," he said.

Under the terms of the bill, employees will also be able to purchase up to five years of service, increasing their retirement annuities by paying all the contributions and other GERS costs in advance of retiring.

In addition to paying what would have been paid in pension contributions, the employee seeking to purchase a larger pension than justified by the number of years they actually worked would have to pay any interest or capital gains the money they contribute would have earned had it been collected over time.

Voting to send the GERS reform bill on to Rules and Judiciary Committee for further consideration were: Richards, Russell, Sens. Janette Millin-Young, Celestino White and Alvin Williams. Sen. Alicia "Chucky" Hansen voted nay, and Sen. Terrence "Positive" Nelson was absent.

The committee also sent forward a bill expanding the use of the federal write-in absentee ballot, authorizing late voter registration for recently discharged military personnel and banning election board members who are running for other elected office from participating in board decisions.