Commission advances amendment to require employers to remit pension contributions for rehired retirees

The Legislative Commission on Pensions and Retirement adopted a DE1 amendment and recommended incorporation into the omnibus pension package for a bill that would require employers to remit pension contributions when rehiring retired, pension-collecting employees.

Representative Driscoll, sponsor of House File 4162, explained that the change would hold agencies accountable for money the state previously allocated for services and that it would align practice across multiple plans. Staff and sponsors cited an estimated cumulative yield between $10 million and $12 million for various plans if the change were widely applied.

Questions and concerns: Members generally supported the principle that state-allocated funds should be used as intended, but some raised concerns about the cumulative impact on local budgets, school districts and property taxes. Senator Rasmussen and others noted the change could create a disconnect between who pays and who benefits if employers remit money for rehired retirees who receive no additional benefit adjustments. Sponsors said the amendment is intended to preserve plan integrity and the money would be applied to the pension plans.

Outcome: The commission adopted the DE1 amendment by voice vote and incorporated the change into the 2026 omnibus pension bill. Sponsors said the amendment’s effective dates will follow payroll and fiscal-year timing (effective July 1, 2026 or Jan. 1, 2027 depending on employer fiscal calendar).

Provenance: Sponsor presentation and fiscal figures are in the record beginning around SEG 1611; motion, debate and adoption appear through SEG 1896.