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Committee Hears Two-Year 'Thirteenth Check' Proposal for Retirees; Vote Deferred
Summary
The Pensions and Labor Committee heard testimony on House Bill 12-21, a proposal to authorize a two-year 'thirteenth check' for public retirees. Lawmakers and actuaries said supplemental reserve accounts appear sufficient for the next two years; final action was deferred to next week.
The Pensions and Labor Committee heard testimony on House Bill 12-21 on a proposal to authorize a two-year "thirteenth check" — an additional annual payment for public retirees — but the committee deferred a vote until next week.
Senator Mike Buchanan presented the bill and described it as "a relatively simple bill that essentially approves a thirteenth check for the next 2 years."
Why it matters: Retiree groups and union representatives told the committee the payment is a critical supplement to small monthly pensions. Actuarial and fiscal witnesses said the state's supplemental reserve accounts currently appear to cover the proposed payments for the two-year biennium, though longer-term funding and unfunded liabilities remain a concern.
Chief actuary Andy Blau of the Indiana Public Retirement System said the supplemental reserve account mechanisms "are currently targeting funding at a higher level than what this bill offers for the next 2 years," and that the reserves are "more than twice the amount of the thirteenth checks that are in this bill." Blau provided cost estimates by fund for fiscal year 2026 and fiscal year 2027: about $37,000,000 for PERF in each year; roughly $22,000,000 (FY26) and $21,500,000 (FY27) for the pre‑1996 teacher fund; about $4,600,000 (FY26) and $5,000,000 (FY27) for the 1996 teacher fund; and a little over $100,000 per year for the Excise/Gaming/Conservation Officers plan.
Retiree and public-employee groups urged approval. Laura Penman of the Indiana Retired Teachers Association and Gail Zahraless of the Indiana State Teachers Association both voiced support. Jessica Love, executive director of the Retired Indiana Public Employees Association (RIPIA), said 72 percent of Indiana's retired public employees have a monthly pension benefit of $1,000 or less and that "the money is there and continues to grow." Love cited a reported net position for supplemental reserve accounts of $448,000,000 as of a February 2025 board meeting and said more than $193,000,000 is in the supplemental reserve account for PERF.
Jeff Wells of the Indiana Conservation Officers FOP Lodge 201 urged parity in how thirteenth checks are calculated for small plan groups and asked that Excise/Gaming/Conservation plan retirees receive checks comparable to trooper retirees; he also asked that survivor-option choices be expanded for that plan.
Several senators, including Senator Zay and Senator Donnell, urged that the legislature pursue a permanent solution rather than repeating a biennial approval process. Buchanan noted a hesitation: the pre-1996 teachers fund still has an unfunded liability (he referenced "just under $5 billion"), and that remaining liability is a factor lawmakers consider before making any change permanent.
No formal motion to pass the bill was taken; Chair Rogers said the item would be held for a vote next week.
Looking ahead: Committee members expressed interest in pursuing longer-term fixes, including Senate Bill 275 from the prior year and study of how to make cost-of-living adjustments or thirteenth checks permanent. The committee will reconvene to vote on House Bill 12-21 next week.
