HB2851 Summary: Self-Managed Retirement Plans

• Establishes self-managed (defined contribution) retirement plans for participants in the General Assembly, State Employees, Downstate Teachers, and Judges retirement systems, allowing them to opt out of traditional defined benefit plans starting January 1, 2020.

• Participants electing the self-managed plan receive a 7.6% State contribution rate (less disability insurance cost) plus their own contributions invested in mutual funds or annuity contracts, with investment choices and risk borne by the participant rather than the State.

• Allows participants with prior service in traditional plans to terminate those rights and establish an opening account balance equal to the contribution refund they would have received.

• Participants vest in State contributions after 5 years of service, death in service with 1.5+ years, or retirement eligibility; forfeited State contributions are held in escrow for future allocations.

• Excludes self-managed plan benefits from the definition of "new benefit increase" requiring funding approval, and exempts implementation from State Mandates Act reimbursement requirements.