HB437 Summary

• Establishes a new Tier III defined benefit retirement plan for public employees first hired on or after October 1, 2020, by employers participating in the Employees' Retirement System.

• Tier III plan members receive a service retirement allowance consisting of an annuity plus a pension calculated at 2% of average final compensation multiplied by years of creditable service, with a maximum of 80% of average final compensation.

• Tier III members are eligible for service retirement at age 62 with 10 years of creditable service, or with 30 years of creditable service at any age without reduction.

• Sets employee contribution rates for Tier III members at 7.5% of earnable compensation (7.75% for correctional officers, firefighters, and law enforcement officers).

• Allows Tier II plan members to elect and transfer into the new Tier III plan, and requires a two-thirds legislative vote to increase the retirement age for Tier II members above age 62.