HB508 Summary

• Establishes a new defined benefit retirement plan (Tier II Plan) for public employees first hired on or after January 1, 2013, by employers participating in the Teachers' Retirement System (TRS) or Employees' Retirement System (ERS).

• Tier II plan members contribute 6% of earnable compensation to the Annuity Savings Fund, compared to higher rates for Tier I (existing) plan members, with different retirement age thresholds (age 62 for Tier II versus age 60 for Tier I).

• Establishes minimum retirement eligibility requirements of 10 or more years of creditable service and specifies pension calculations at 1.65% of average final compensation multiplied by years of service, capped at 80% of average final compensation.

• Tier II plan members are ineligible for sick leave conversion to creditable service and hazardous duty time benefits previously available to Tier I members.

• Effective date is January 1, 2013, with provisions making the act severable if any portion is declared invalid or unconstitutional.