HB 6131 Summary

• Establishes "Tier 2," a defined contribution retirement plan for public school employees first hired on or after June 1, 2010, alongside the existing "Tier 1" defined benefit plan.

• Allows existing Tier 1 members to elect irrevocably to transfer to Tier 2 between April 30, 2010 and July 3, 2010, with lump sum transfers of accumulated contributions and vested benefits calculated at 8% interest.

• Requires employers to contribute 4% of compensation to Tier 2 participant accounts, with participants able to contribute up to 3% with matching employer contributions, plus additional voluntary contributions without employer match.

• Tier 2 participants vest immediately in their own contributions and employer contributions over 4 years (50% at 2 years, 75% at 3 years, 100% at 4 years), with health insurance vesting at 10 years of service or upon meeting Tier 1 health benefit requirements.

• Requires department to designate at least 3 Tier 2 investment plans from different providers, with participants directing their own investments; distributions available as lump sum, rollover, periodic payments, or deferred withdrawal upon separation from employment.