HB 10-1207 Summary

• Changes highest average salary (HAS) calculation from 3-year to 5-year average with 5% annual salary increase cap for members not yet eligible for retirement on January 1, 2011

• Establishes new employer and member contribution rates of 10% of salary each beginning January 1, 2011, and eliminates amortization equalization disbursement (AED) and supplemental amortization equalization disbursement (SAED) beginning January 1, 2011

• Reduces cost of living adjustment (COLA) from 3.5% or 3% to 2% or inflation (whichever is less) for all current and future retirees, with flexibility to adjust when a division reaches 90% actuarial funded ratio

• Creates new Rule of 95 requiring members without 5 years of service on the effective date to have 30 years of service and reach age 65 for full retirement benefits (except state troopers)

• Establishes new defined contribution plan for employees hired on or after January 1, 2011, and prohibits all service credit purchases beginning January 1, 2011