2023 Omnibus Retirement Bills
2023 Omnibus Retirement Bills
On May 19, 2023, the Governor signed three bills impacting PERA benefits:
- SF3016/HF2950, the Pension and Retirement Omnibus Policy Bill (Policy Bill),
- SF3162/HF3100, the Pension Omnibus Budget Bill (Budget Bill), and
- SF1959/HF1234, a bill modifying peace officer and firefighter duty disability provisions (Disability Bill)
The Policy Bill included a return to monthly threshold criteria for PERA membership eligibility requirements, age standardization of dependent child benefits, minor changes to the leave purchase process for terminated members and those applying for disability, Statewide Volunteer Firefighter (SVF) changes that authorize previous service to count for vesting purposes, and a provision for previously elected but now appointed positions to remain in the Defined Contribution Plan (DCP). Many of these provisions were administrative changes and did not create any additional costs to PERA plans.
The Budget Bill contained a few changes that provided direct funding by the legislature. The first change provides a one-time lump sum payment to Coordinated, Basic, and Police & Fire recipients. The Bill also modifies the assumed rate of return from 7.5% to 7%, adjusts vesting requirements from five years to three years for General Plan members, repeals the delayed annual increase for General Plan members, adjusts the annual increase trigger criteria for the Correctional Plan, and allocates direct funding for General and Correctional Plans’ unfunded liabilities. In addition, the bill includes $5 million for an incentive program for new entities to join the SVF Plan.
The Disability Bill establishes new treatment plan requirements for Police & Fire members with a psychological condition that occurred on the job, changes the Police & Fire vesting requirements from 10-20 years graded vesting to 5-10 years graded vesting, codifies PERA’s reapplication process, increases Police & Fire duty total and permanent benefits from 60% to 99% of the member’s average salary, eliminates the workers’ compensation offset, and modifies the offset calculation for disability members with reemployment earnings.
We appreciate your patience as we begin communicating and implementing these new changes. We will provide additional communication in our Summer 2023 member and employer newsletters, including when each change will be effective. In addition, we will share specific details to impacted membership groups as we begin implementing these changes.