Senate committee hears bill to seed $300 million pension reserve and keep interest split to support debt relief and pensions

Senator Wendy McKamey introduced Senate Bill 287, saying the measure “creates a financial framework to assist in ensuring that the public employees and teachers retirement systems meet their long term rate of return assumptions and adds an ongoing additional funding source for the pension state special revenue account.” The bill would make a one‑time general fund transfer of $300,000,000 to a newly created pension state special revenue account and allow that account to retain its interest earnings.

The bill also changes the distribution of interest earned in the treasurer’s cash account so 50% would go to the general fund and 50% would continue to be directed to the debt and liability free account. Under a separate rule in the bill, any unobligated balance in the debt and liability free account in excess of $150,000,000 at the end of the biennium would be transferred into the pension reserve.

Ryan Evans of the governor’s budget office walked the committee through the mechanics and the flow diagram. He described the proposal as a way to “seed” the pension reserve and generate interest that would…