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Regents task force recommends pursuing employer ORP contribution increase; eyes $81M UAL retention as potential funding source
Summary
The task force discussed raising the employer contribution rate for optional retirement plan participants from 6.2% to 8% and debated funding options, including retaining about $81 million from a proposed constitutional amendment sweep; members discussed phased implementation, guardrails and cost-share tradeoffs.
Staff presented a recommendation to increase the employer contribution rate for optional retirement plan (ORP) participants from 6.2% to 8%, citing recruitment and retention goals and parity concerns with pension-plan participants.
Elizabeth (staff) summarized the task force’s earlier recommendation and said one funding option would be to request that proceeds from a proposed constitutional amendment (Act 1 of the 2024 third extraordinary session) be retained for higher education rather than returned to the general fund. Staff estimated that if those funds were retained for higher education the amount available would be about $81,000,000, and that retaining that sum and reallocating a portion could cover the roughly $11,000,000 additional annual cost to move the employer contribution from 6.2% to 8%.
Members said the decision to reallocate swept funds rests with the legislature and that retaining the funds is not guaranteed. CFOs warned of the fiscal impact and urged consideration of a phased implementation (for example, incrementally moving from 6.2% toward 8%) and clear guardrails if the board recommends the change. One board member framed the increase as a fairness issue: ORP participants do not receive the same package as TRSL members; another emphasized cost constraints.
The task force did not adopt a final recommendation at the meeting; staff said it will present drafted recommendation language and cost estimates at the next meeting. The group also discussed other funding tools (pension obligation bonds, bonding UAL) and noted those options carry risks and additional financing costs.
Votes at a glance: the meeting approved the prior meeting's minutes by voice vote; no formal legislative motions or statutory changes were adopted by the task force at this session. Next steps: staff will prepare draft recommendation language, cost estimates and a proposed phased implementation schedule for review at the October and November meetings.
