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Senate panel temporarily moves oversight of state employee benefits to finance board amid deficit
Summary
The Senate Governmental Affairs Committee passed SB 693 to dissolve the Employee Benefits Division (EBD) governing board and place temporary oversight with the State Board of Finance, a sponsor said, to address a multi‑million‑dollar shortfall while lawmakers pursue a long‑term governance fix.
Senator Jimmy Hickey, sponsor of Senate Bill 693, told the Senate Governmental Affairs Committee the measure would eliminate the Employee Benefits Division governing board and temporarily place authority under the State Board of Finance to address an immediate funding shortfall in state and public school employee insurance plans. “We put $43,000,000 … into the teacher's retirement or insurance fund” in the past, Hickey said, and now the plans face another large deficit.
Hickey described the legislation as a short‑term, procedural step to make decisions before the end of the fiscal year: “This is literally phase 1 or step 1 … we’ve got to do this because before the legislature … will feel like they want to get involved and possibly even have to put more money into this plan, we’re gonna have to have a new governance that’ll be temporary.” He told members he had requested updated actuarial figures and said current internal estimates show deficits “for the Arkansas State employees … $27,000,000 for the calendar year ’22 and the public school employees will be $63,000,000.”
An employee‑benefit consultant who testified against the measure cautioned the committee against blaming board members for past problems when actuaries or data inputs may be responsible. Mark Metters, an employee‑benefit consultant with Sunstar Insurance of Arkansas, said boards are only as good as the actuarial information they receive and recommended improving data quality and oversight rather than removing local governance outright.
Hickey responded that lawmakers intend to recruit a temporary governance body under the board of finance, hire a consultant via an RFP already issued by the legislature, develop a strategic plan over the summer and return with a long‑term governance proposal in a later session. After brief questions, the committee voted to pass SB 693 on a motion from Senator Ballinger, seconded by Senator Hester.
The committee vote was by voice; no roll‑call tally was provided.
What’s next: Sponsor Hickey said stakeholder work and consultant analysis are expected over the summer; the temporary governance change would be in place immediately and legislative action on a permanent board is planned for a future session.
