Committee hears actuarial fiscal note for ad hoc COLA bill 1474; members ask for updated costs under new assumptions

Members of the Select Committee on Pension Policy’s executive committee discussed whether to pursue support for an ad hoc cost‑of‑living adjustment for Plan 1 members and reviewed an actuarial cost estimate for House Bill 1474.

"Have the fiscal note for 1474 right in front of me," Michael Harber, actuary for the Office of State Actuary, told the committee, and said "the 10 year cost for that was about $200,000,000." Harber added the estimate "starts at about $33,000,000" on an annual basis, paid from the general fund if the bill were enacted under earlier assumptions.

Members said recent changes in investment assumptions and the suspension of certain contributions could change the bill’s fiscal profile. Harber told the committee a higher assumed investment rate of return (for example, 7.25 percent rather than 7 percent) and an expected decline in the eligible population would reduce projected costs: "A higher assumed investment rate of return ... that's going to bring the fiscal costs down," Harber said.

Committee members requested an updated actuarial analysis before deciding whether to endorse or recommend the bill. The chair and staff agreed to treat a recommendation as a placeholder for November, with staff and OSA clarifying what level of fiscal analysis the actuarial team can deliver by that date. No formal committee endorsement or vote on the bill was taken at the executive session.