Committee backs bill letting overfunded public-safety pension plans reduce employer contributions

Committee members returned House Bill 20 15 with a due‑pass recommendation after staff and agency representatives described technical changes to two retirement plans for corrections officers and elected officials.

Mr. Douglas Dexter, research intern, told the committee the bill would change how the Correctional Officer Retirement Plan (CORP) and the Elected Officials Retirement Plan (EORP) treat excess valuation assets, give trustees direction on stabilizing reserves and suspension of contributions, and allow certain member contribution changes to reduce employer contributions when a plan reaches a specified funding threshold. “It creates a board, it requires the Board of Trustees for CORP and EORP to account for the excess valuation assets up to 100% of present value of all future benefits in the stabilization reserve account,” Dexter said.

Diane McAllister, testifying for the Public Safety Personnel Retirement System (PSPRS), said the bill moves the funding benchmark from a snapshot actuarial accrued liability (AAL) to the present value of future benefits (PVFB). “We are moving it to a percent funded of the present value of future benefits, which means we have all the money we need to pay out the benefits for our actives as our retirees,” McAllister said. She gave the city of Tombstone as an example of an employer that was significantly overfunded under older measures and said the bill would let employers use the overfunded portion to reduce normal‑cost payments rather than permanently “stranding taxpayer dollars” in a trust.

The measure also directs the Joint Legislative Budget Committee (JLBC) may confirm whether a state employer meets requirements before the Legislature passes a bill directing a transfer of assets, the staff explanation said. McAllister said the bill allows an employer with a closed plan that has no beneficiaries to seek transfer of those employer funds to another of the employer’s plans with unfunded liabilities.

The committee’s motion to return the bill with a due‑pass recommendation passed on a voice and roll call showing eight ayes, zero nays and one absent. The committee then moved to the next bill on the calendar.

The bill makes technical, largely actuarial and administrative changes to CORP and EORP; it does not itself change benefit formulas for members and does not directly appropriate new state money.