HB0134 Summary

• Creates a new Tier III benefit package for persons first participating in five State-funded retirement systems (Articles 2, 14, 15, 16, 18) on or after July 1, 2015, with lower benefits than Tier II.

• Tier III participants receive a retirement benefit of either 1.6% of final average salary per year of service or an annuity from accumulated defined contributions (employer/State contributions plus interest), whichever is higher.

• Retirement annuities and employee contribution rates for Tier III participants adjust annually based on the retirement system's actual investment earnings compared to the assumed rate, allowing for increases or decreases.

• Actual employers (universities and community colleges) must contribute to amortize unfunded liabilities specifically relating to their Tier III participants under a rolling 30-year amortization period.

• When debt service obligations for certain pension bonds end, remaining funds shall be distributed proportionally to all five State-funded retirement systems to reduce their unfunded actuarial liabilities; State Mandates Act requirements exempted from reimbursement.