Legislature(1995 - 1996)
04/12/1995 03:30 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 151 "An Act placing the administrative director of the court system in the public employees' retirement system." Art Snowden, Administrative Director for the Court System stated that the Supreme Court has asked that he testify in opposition to the legislation. He offered background, noting that the office of Administrative Director is a constitutional office within this state. In 1980 the Administrative Director was put under the judicial retirement system. It is the only retirement system with a 10-year vest. This legislation updates changes that have been made since statehood. At statehood, the chief justice served forever. The voters of the state changed that constitution some years later to say, the chief justice serves for three years at which time it goes to another elected member of the court and they may not succeed themselves. At this time, the court felt it needed continuity specifically in administration because the chief justice was changing. The position of administrative director, is a profession. There are 50 in the country. It requires special training. The ten year vest was put on this bill for the purpose of making sure that there was a longevity in the office. Co-chair Halford inquired as to the retirement system. Mr. Snowden informed the committee that an employee working their way up to administrative director would fall under PERS and remain there in the first 9 years of being the administrative director. On the 10th year, the state employee is then able to buy into the judicial retirement system, receive their PERS contribution back (which is a 3% contribution, and pay 7 to 7-1/2% for the JRS retirement). It is not a free system. The court and legislature wanted continuity. He informed the committee of the administrative director's responsibilities. He emphasized to the committee that the American Bar Association standards on court organizations say in part, the level of compensation and retirement benefits of the director of the administrative office of courts should be no less than a judge of the intermediate court of appeals. The administrative director for almost 40% of our states are under a judicial retirement system. The Supreme Court wants this in place to attract highly professional people who have been trained to do this function. Senator Sharp asked what the contribution is of the administrative director for the first 9 years? Mr. Snowden responded that the administrative director contributes 7 to 7-1/5% into the judicial retirement system. If the administrator elects to leave prior to 10 years, they revert to PERS. Under PERS, the administrator would be refunded from the judicial system and then pay into PERS the appropriate amount that it would have cost over those years. Or, there is the option to take the money and elect not to take retirement. Under five years, there is no retirement benefits. After 10 years there is still an option. Robert Stalnaker, Director, Retirement & Benefits stated that it is a zero cost bill to the system because whatever system is chosen, there are contributions to pay. He explained the process. A court administrator would start out in the judicial system, make the appropriate contributions and if their longevity is less than 10 years, they could refund out of the judicial system and buy into PERS. This option is available after 10 years as well. Senator Zharoff MOVED to adopt SB 151 with individual recommendations and two zero fiscal notes. No objection being heard, SB 151 was REPORTED OUT of committee with two fiscal notes from the Dept of Administration and Courts. Trial Courts fiscal notes has a cost of $25.4 in 2001. Co- chairs Halford and Frank recommended "do pass", while Senators Rieger, Phillips, and Sharp signed "no recommendation", and Senators Zharoff and Donley recommended "do not pass". The meeting adjourned at approximately 3:45 p.m. The meeting reconvened at approximately 5:05 p.m. PRESENT Co-chair Halford, along with Senators Phillips, Donley, and Sharp were present. Senators Zharoff and Rieger joined the meeting shortly after it began. Co-chair Frank was unable to attend.