Counties Support “Local Option” Amendment for Pension Enhancements

MACo Executive Director Michael Sanderson testified to the House Appropriations Committee, in support with amendments to HB 659 – Law Enforcement Officers’ Pension System – Benefits. This bill presents a significant unfunded mandate on county governments by increasing the normal service retirement benefit multiplier for members of the Law Enforcement Officers’ Pension System from 2.0% to 2.5%. The bill also raises – for the second time in three years – the cap on normal service retirement benefit payments from 65% to 70% of the member’s average final compensation.

From MACo Testimony:

According to the bill’s fiscal note, local pension liabilities would increase by a combined total of approximately $19.6 million, and employer normal costs would increase by $1.5 million. Amortizing the increased liabilities and adding the full normal cost increase will result in pension contributions growing by approximately $3.1 million in fiscal 2022 and annually thereafter, according to actuarial assumptions.

An amendment could resolve this county mandate. There is precedent for providing county members of the state system with an option to join the benefit enhancement, too. Such an option would provide a discrete amount of time for a county government to determine whether they would join the enhancement.

Follow MACo’s advocacy efforts during the 2020 legislative session on MACo’s Legislative Tracking Database.