HB 2199 Summary

• Changes the average monthly benefit compensation calculation period from the highest three consecutive years to the highest five consecutive years within the last twenty completed years of credited service.

• Modifies normal retirement requirements for newly hired employees (on or after effective date) to require 25 years of service and age 52.5, compared to the prior requirement of 20 years of service or age 62 with 15 years of service.

• Increases member contribution rates incrementally from 7.65% to 11.65% of compensation between fiscal years 2011-2012 and 2015-2016, with a cap at 33.3% of the employer contribution rate thereafter.

• Requires members participating in the Deferred Retirement Option Plan after the effective date to continue making member contributions and receive reduced account credits (one-half the system's total rate of return, capped at the assumed investment rate and minimum 2%).

• Changes the benefit increase calculation methodology based on the fund's funding ratio, with excess investment earnings available only when the market value to actuarial liability ratio exceeds 70%, with retroactive application to June 29, 2011.