Senate approves changes to firefighters’ pension fund, allows higher-risk bond investments
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Summary
The Georgia Senate passed a substitute to SB 143 that allows certain firefighters to retire at 50 (with a combined “80” rule) and lets the firefighters’ pension fund invest up to 10% in below-investment-grade (high-yield) bonds. Supporters said it aids recruitment and retention; opponents warned of added risk and noted no new funding plan was adopted.
The Georgia Senate on Feb. 17 passed a substitute to Senate Bill 143 that adjusts retirement rules for members of the Georgia Firefighters Pension Fund and permits the fund to place up to 10% of its assets in below-investment-grade (high-yield) bonds.
Senator (36), speaking in favor of the substitute, said the change would ‘‘help fill the gap’’ in recruitment and retention for firefighters and noted the pension fund ‘‘has no state tax dollars’’ and has historically posted strong returns. He described the proposal as allowing some firefighters to retire at age 50 with a combined ‘‘80’’ factor (for example, 30 years of service plus age 50) and to increase the fund’s capacity to seek higher-yield debt instruments in order to support cost-of-living adjustments.
Opponents raised funding and risk concerns. Senator (37) said the measure ‘‘expands benefits without a funding plan,’’ warning that early retirement increases years of payout while reducing active contributors. Senator (2) pressed for a clarification that the 10% allowance applies to bonds rated below investment grade (not to private-equity style purchases), and the bill’s supporters responded that the provision targets high-yield bonds specifically and that other alternative-investment authorities for the fund already exist.
The chamber adopted the committee substitute and, after floor questions and debate, approved the bill by a vote of 47 yeas and 3 nays. The bill’s supporters said firefighters and the fund’s managers requested the flexibility; critics argued the change raises solvency risks if higher-yield holdings default.
The Senate record shows proponents’ claims about historical returns and comparative performance were presented on the floor as part of the argument for broader investment authority; those performance figures were asserted by supporters but not independently verified during the session. The substitute does not appropriate state tax dollars to the firefighters’ fund; legislators emphasized it is member-funded and supported by insurance-premium revenue.
The measure now moves to the next steps in the legislative process.
