Legislature(1997 - 1998)
03/27/1997 03:35 PM Senate STA
Audio | Topic |
---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Number 460 SB 129 PERS REQUIRED SAVINGS UNDER RIP CHAIRMAN GREEN brought SB 129 before the committee as the next order of business. SENATOR DUNCAN , prime sponsor of SB 129, explained the legislation relates to the Retirement Incentive Program (RIP) passed last year by the Legislature. Last year's bill allowed cost savings to be calculated over a three-year period of time, and SB 129 amends that provision to a five-year cost savings calculation. He said he thinks it is an important provision to consider as far as ensuring that the program that passed last year will work to its maximum and allow the cost savings that he believes should be generated under the program. Senator Duncan pointed out that the five-year cost savings calculation is not a new concept, having been in two previous Retirement Incentive Programs. The numbers of people who not only were eligible but designated to participate were of a much higher percentage than what is occurring in the current program. Changing to the five-year calculation would increase the number of people who would be eligible to retire and who potentially would retire. Therefore, as that happens, there is more cost savings in state government and it will have a very positive impact on helping reduce government expenditures overall, he stated. Number 420 CHAIRMAN GREEN commented that in listening to the budget process this year, she was disappointed in the amount of cost savings being shown. SENATOR DUNCAN said he thinks this program is being managed much more conservatively than previous programs were, primarily because the legislative intent was to do that. He said it is hard to compare this program with previous programs because of the three-year calculation and because the last two programs had only one window period whereas this program runs through 1999. He noted Senator Sharp has introduced legislation that would require eligible employees to take the RIP in the first window they are eligible. Number 400 SENATOR WARD commented that it would appear that the Administration has been restrictive and selective in their approach, making the program not necessarily working in the way the Legislature had intended. He also noted that Senator Sharp's bill, SB 126, has a broad enough title to extend the three-year calculation to five years, but it is his understanding that the 5-year calculation was rejected by Senate Finance because that tool was not considered as a necessity. SENATOR DUNCAN agreed that the provision was discussed in the Senate Finance Committee, but he said it was never rejected by the committee. It was only discussed because Senator Adams asked a question of a union representative. He also stated he would have no problem with amending Senator Sharp's bill to include a 5-year cost savings. SENATOR WARD then voiced his concern that he was not sure if changing the provision from three years to five years was good public policy. Number 340 BILL CHURCH , Retirement Supervisor, Division of Retirement & Benefits, Department of Administration, came forward to respond to questions from the committee. SENATOR WARD asked if it was correct that out of the state's 12,500 department employees, there have been 46 individuals that have actually retired under this RIP. MR. CHURCH responded that it is probably a little bit more at this point in time. There are people retiring each month under the program so it's very dynamic in nature. He agreed with Senator Duncan that they are seeing fewer people retire under this program than they have in previous RIPs, although this program is structured much differently than previous programs. SENATOR WARD asked Mr. Church if he thinks the new RIP has been structured to the letter of the legislative intent, or has it been selective and restrictive on the part of the Administration. MR. CHURCH replied that he wasn't at the committee hearings when the bill was passed, but it his understanding that the program is being run in accordance with the guidance and understanding that was given through the Legislature. Number 300 SENATOR DUNCAN asked Mr. Church his reaction to computing cost savings over five years instead of over three years. MR. CHURCH said when the law was changed in the previous RIP from three years to five years, there were many more individuals who met the qualifications to be able to retire under the program. He added he believes it was very successful by allowing more people to take advantage of the RIP, reducing personal services costs to the employers. Number 270 There being no further testimony on SB 129, CHAIRMAN GREEN said she was willing to move the bill out of committee, but she didn't think there were the signatures to do so. She advised SB 129 would be held over to the April 1 meeting.
Document Name | Date/Time | Subjects |
---|