The new plan would include both a defined benefit component with a secure base benefit for employees – that acts like Social Security – and a defined contribution piece to add a level of portability for workers. The bill also allows existing LASERS members hired after July 1, 2006, to make an irrevocable choice to join the new hybrid plan after it is established.
Members would be eligible to retire at age 65, and Cost-of-Living-Adjustments (COLAs) are pre-funded in the new plan at two percent every other year – but only when the system is at least 65 percent funded.
The employer contribution rates would be roughly the same as they are currently; however, liabilities will be significantly reduced. In 2032, the actuaries estimate the Unfunded Accrued Liability (UAL) would be $100 million less in the proposed hybrid plan than it would be under the current plan.
We need you to add your voice in support of this smart policy - ask the governor to reconsider his position. Explain to him that it is time for comprehensive reform that will create a more cost-effective system that is friendlier to the next generation of state workers and to taxpayers alike.