Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pensions County topic
No spam. Unsubscribe anytime.
Committee advances bill letting county boards set smaller cost-of-living increases; key amendments fail
Summary
House Bill 754 would allow county retirement boards to grant cost-of-living adjustments up to, but not exceeding, the change in the consumer price index rather than requiring COLAs equal the CPI.
House Bill 754, sponsored by Representative Harkins, would amend the County Pension Law (Act 96 of 1971) to allow county retirement boards to grant a cost-of-living adjustment (COLA) that may be any percentage up to, but not more than, the applicable change in the consumer price index rather than requiring the COLA to equal the CPI change.
Representative Harkins said the change would give retirement boards flexibility to grant smaller COLAs when the CPI is high and counties cannot afford the full index increase. "My bill simply inserts six words — 'up to, but no more than' — into the relevant section regarding supplemental benefits," Harkins said, adding county treasurers contacted him saying many counties lack the ability to afford a full CPI-based increase.
Committee members debated two amendments offered by Chairman Miller. Amendment A00148 would (1) replace a now-defunct oversight reference with reporting to the Auditor General and (2) require counties to prepay the cost of any COLA obligation rather than finance it with debt. Chairman Miller argued prepayment would avoid increasing unfunded pension liabilities. Representative Harkins and others said the prepayment requirement could make it difficult for counties to provide any increase and might unduly restrict options. The committee rejected A00148 by roll call (14 no, 12 yes).
A second amendment, A00158, would allow counties to offer a defined contribution plan option in addition to the traditional defined benefit plan. Supporters said the amendment would give counties flexibility; opponents said including that change in this bill would be a larger policy shift better handled separately. The committee rejected A00158 on a recorded vote (14 no, 12 yes).
After debate the committee voted to report the bill to the House (final committee vote recorded as 15 yes, 11 no). Representative Harkins and other backers said the bill is intended to enable counties with limited fiscal capacity to provide modest COLAs to retirees; critics argued prepayment or similar safeguards are needed to protect pension fund solvency.
