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Rules committee moves to limit optional retirement program for new hires and cap employer contribution share
Summary
The Rules Committee approved a committee substitute for Senate Bill 2449 that would end ORP eligibility for new hires and cap the employer contribution portion for current ORP participants at 9 percent, sponsor Senator Sparks said.
Senator Sundar Sparks told the Rules Committee that Senate Bill 2449 addresses the Optional Retirement Program (ORP), a defined‑contribution option created by the Legislature in 1990 for certain employees at Institutions of Higher Learning and other eligible employers.
Sparks said the committee substitute would end ORP eligibility for new hires after the bill’s effective date and would leave current ORP participants in their existing ORP accounts. Under the substitute, the employer contribution for existing ORP participants would be capped at 9 percent rather than rising in step with employer contribution rates to PERS; Sparks told committee members that as the employer contribution rate rises, the share routed to ORP participants increases unless capped.
"When we get to 19.9, only 2.5% of that for an ORP participant will go to PERS," Sparks said in explanation of how current employer contribution allocations work; he described the concern that, without a cap, the employer share routed to ORP accounts could grow substantially as the statutory employer rate increases.
Sparks said he had discussed the proposal with several ORP institutions and that PERS did not make a recommendation endorsing this specific change this year. Committee members asked whether the Institutions of Higher Learning (IHL) board had issued a recommendation; Sparks said he had not asked the IHL board and was not aware of a recommendation.
The committee voted to pass the committee substitute; the transcript records a motion and that the committee substitute "do pass" and that the bill "would be reported." The transcript does not include a roll‑call tally in the audio record.
Ending: The committee approved the committee substitute for SB 2449 and reported it to the next stage; sponsor and committee discussion emphasized the proposal affects future hires and caps employer allocations for current ORP participants rather than altering current PERS member benefits.
