Committee supports $135 million strategic‑fund transfer to reduce PERS main‑plan liability

Representative Jason Doctor introduced House Bill 12‑34, a one‑time proposal to transfer $135 million from the Strategic Investment and Improvements Fund (SIF) to the PERS main defined‑benefit plan to reduce the system's unfunded liability. Doctor said the goal is to reduce interest costs and the long‑term burden on taxpayers by paying down plan liabilities sooner.

Doctor described two earlier options he considered (designating internet sales tax revenue or excess gaming tax receipts) but said the House elected to use SIF for the lump‑sum transfer. He said actuarial projections indicated the state's unfunded liability was roughly $1.718 billion as of June 30 (sponsor testimony), and that a substantial up‑front payment will reduce future required employer and taxpayer contributions.

Derek Holbein, PERS chief operating and financial officer, testified in support and described how a $135 million deposit would interact with current ADEC calculations. Holbein said the agency's July 2024 actuarial valuation showed roughly $1.9 billion in unfunded liability; he explained that lump‑sum deposits reduce the amount that otherwise would be recovered through higher employer contribution rates (the ADEC). PERS noted that if the lump sum covers the roughly $90 million of biennial ADEC funding the agency expected, employers would not face a planned increase in employer contribution rate (roughly 5.92% without lump‑sum funding; Holbein described a 6.02% figure that would apply absent deposits for certain entity removals). He said additional lump‑sum payments reduce future biennial employer burdens by increasing the plan's funded ratio and providing more assets to earn investment returns.

Committee members asked about competing budget priorities and long‑term choices. Representative Doctor said the plan is to apply the $135 million with approximately $90 million toward the immediate ADEC need and the remainder toward reducing the unfunded liability principal. After discussion, Senator Wallin moved a due‑pass recommendation with referral to appropriations; Senator Castaneda seconded. The motion passed on a recorded committee vote (5‑0‑1). Representative Doctor volunteered to carry the bill and committee members said appropriations would set the final appropriation amount during that process.