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Senate committee advances bill to allow Roth catch-up and QDRO access for deferred compensation accounts
Summary
Senator Sundar Sparks said the Rules Committee reported Senate Bill 2863 after explaining it would allow Roth catch-up contributions and make deferred compensation accounts subject to qualified domestic relations orders, while not changing current PERS benefits.
Senator Sundar Sparks, speaking to the Senate Rules Committee, said members reported Senate Bill 2863 out of committee after explaining it deals with the state deferred compensation program and does not change PERS retirement benefits.
The bill would add language to permit Roth-style after-tax catch-up contributions for deferred compensation participants who exceed the age threshold for catch-up contributions, and would make deferred compensation accounts subject to qualified domestic relations orders (QDROs) for child support, alimony or similar court-ordered payments, according to Sparks.
"The first part of this bill addresses Roth accounts after tax...that would allow that for our state employees potentially to make those catch up contributions," Sparks said. He later summarized the second change: "a qualified, domestic relations order...currently is not able to be accessed, and this legislation would do that."
Sparks emphasized that the proposal does not change PERS benefit calculations or cost-of-living adjustments for current employees or retirees. "Nothing in any of these proposed pieces of legislation changes or attempts to change any benefit to retirees, including the cost of living adjustment," he told the committee.
Sparks placed the discussion in the larger fiscal context for PERS, citing figures provided by PERS staff: PERS holds assets of about $34,400,000,000 and an unfunded actuarial liability (net pension liability) of about $26,500,000,000, a funded ratio Sparks said was about 55.9 percent. He also cited system counts of roughly 154,000 active members and 118,000 retirees and beneficiaries, and an annual payout figure he placed at about $3,400,000,000.
After discussion and clarifying questions from committee members, the committee moved and approved a motion to report Senate Bill 2863 from committee; the transcript records the motion and that the bill "would be reported." The transcript does not record a roll-call tally in the committee record.
Ending: The committee action was a committee report (committee passage) that advances SB 2863 to the next step in the legislative process; committee members and PERS staff indicated the bill was drafted with PERS input and is intended to affect only the optional deferred compensation program rather than PERS benefit formulas.
