05/07/2001 02:23 PM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 198(RLS)(efd add)                                                                                    
     "An Act  relating to a post-retirement  pension adjustment  for                                                            
     certain  persons receiving  benefits under  the Elected  Public                                                            
     Officers Retirement  System, and establishing and relating to a                                                            
     Compensation Commission  for State Officials; and providing for                                                            
     an effective date."                                                                                                        
                                                                                                                                
                                                                                                                                
This was the first hearing for this bill in the Senate Finance                                                                  
Committee.                                                                                                                      
                                                                                                                                
MELANIE LESH, Staff to Representative Bill Hudson, testified that                                                               
the sponsor  considers  this matter  an equity  issue regarding  the                                                            
difference  between the  Elected Public  Officers Retirement  System                                                            
(EPORS),  the retirement systems  of several  state leaders  and the                                                            
Public Employees  Retirement System  (PERS). She stressed  there has                                                            
been no cost of  living adjustments for some former  governors since                                                            
they  left  office,  while  all  other  retirees   do  receive  such                                                            
adjustments.                                                                                                                    
                                                                                                                                
Co-Chair Kelly reiterated this is an equity issue.                                                                              
                                                                                                                                
Senator  Olson asked  the number  of people  this legislation  would                                                            
affect.                                                                                                                         
                                                                                                                                
Co-Chair  Kelly listed:  Governor  Jay Hammond,  Former First  Lady,                                                            
Hammond,  in the event  of her  husband's death,  Former  Lieutenant                                                            
Governor  Terry  Miller's  widow,  and  Former  Lieutenant  Governor                                                            
Lowell Thomas, Jr.                                                                                                              
                                                                                                                                
Ms. Lesh affirmed  and noted this would apply in the  future, to all                                                            
former governors and lieutenant  governors and their survivors, once                                                            
they have been retired for ten years.                                                                                           
                                                                                                                                
Co-Chair Kelly asked, "Is this actuarially sound?"                                                                              
                                                                                                                                
GUY BELL, Director, Division  of Retirement and Benefits, Department                                                            
of Administration,  testified the  retirement system is funded  on a                                                            
"pay as you go basis."  He referenced the fiscal note indicating the                                                            
costs of implementing this legislation.                                                                                         
                                                                                                                                
Senator Wilken  asked if  there was any expectation  on the  part of                                                            
these  office-holders  that when  they retired  there  would be  any                                                            
inflation proofing of their retirement benefits.                                                                                
                                                                                                                                
Ms. Lesh  surmised  that since  there has  been no  increase in  the                                                            
salaries  for   almost  20  years,   there  was  probably   no  such                                                            
expectation by these retirees.                                                                                                  
                                                                                                                                
Co-Chair  Kelly spoke of  the increased rate  of inflation  that was                                                            
not anticipated  when these retirees  served. He explained  that the                                                            
inflation  rate  had  been  approximately   three  percent  annually                                                            
compared to the  current 17 to 18 percent and he informed  that this                                                            
has adversely  affected retirement benefits for those  plans that do                                                            
not include cost of living increases.                                                                                           
                                                                                                                                
Senator Leman  moved to report from  Committee, CS HB 198  (RLS)(efd                                                            
add) with accompanying fiscal notes: $57,400 from the Department                                                                
of Administration  and zero from the  Office of the Governor,  and a                                                            
new zero fiscal note from the Legislative Council.                                                                              
                                                                                                                                
There was no objection and the bill MOVED from Committee.