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Posted on: May 17, 2019

Legislation Introduced to Implement Path to Progress Recommendations

Yesterday Senate President Sweeney and Senator Oroho held a press conference announcing a 27-bill package to implement some of the recommendations of the Path to Progress Report. While we are currently reviewing the bills presented in the package, we would like to highlight that Senate President Sweeney announced his plans to move the pension and health benefit reforms by end of June and noted that if the Governor does not sign the pension and health benefit legislation he is prepared to move forward with a public question amending the constitution to enact changes.

The proposed pension bill would establish a cash balance plans in PERS and TPAF for new employees and employees with less than five years of service. For those same employees, the legislation would increase retirement age to 67; move them into a hybrid pension plan in which employees will have a defined benefit pension on the first $40,000 of salary and a cash balance plan that provides an interest credit of 75% of the State’s rate of return or a minimum return of 4%, whichever is greater; details the distribution of funds when the employees retires or terminates employment after less than 10 years; and requires no employer contribution to the employees’ cash balance plan.

The proposed health benefit reform bill would terminate the School Employee Health Benefit Plan (SEHBP) as of January 1, 2020 and shift employees to the State Health Benefits Plan (SHBP). Health plans offered would not be able to exceed an actuarial value of 80%. No plan offered by a public employer could provide greater benefits than the highest level provided under the SHBP. The bill would permit a local public entity and bargaining unit to renegotiate a collective bargaining agreement to account for these modifications.

In the upcoming days we will release a more detail analysis of the bills proposed as part of the package.

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