State House Update
Ed Note: This is the first of an occasional feature that will appear in the
403(b) Advisor. It provides the status of legislation before state legislatures relevant to NTSA membe
California. SB 1149
would create a new optional defined contribution plan for new state employees who are eligible to become members of the California Public Employees’ Retirement System (CalPERS) and who choose not to make contributions into the defined benefit program.
The bill would require state employees who opt to participate in this alternate system to contribute the same percentage of compensation as do similarly situated employees who contribute to the DB program, subject to applicable limits of federal law. The bill would authorize an employee in the DC program, after five years, to have the right to continue in the program or switch to the DB plan, subject to certain terms and conditions.
Referred to the Senate Committee on Public Employees, Retirement, and Social Security on Feb. 22.
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Oklahoma. Companion bills
OK HB 1339 and SB 1056
would modify the Teachers’ Retirement System by authorizing the system to terminate its 403(b) program. They provide that termination of the program must be done in a manner consistent with federal tax law and which minimizes financial harm to participants in the program. They also provide that the independent school districts would continue to choose and offer alternative 403(b) programs.
The Senate Retirement and Insurance Committee with amendments reported SB 1056 on Feb. 26. HB 1339 passed out of the House Banking, Financial Services and Pensions Committee on Feb. 14. These bills are eligible to be put on the calendar for floor consideration in their respective chambers.
Tennessee. SB 2016
would transfer the administration of 403(b) plans for employees of institutions of higher education from the Chancellor of the Tennessee Board of Regents (TBR) and the president of the University of Tennessee (UT), to the Tennessee Consolidated Retirement System (TCRS). It would delete:
- the limit of three companies from which the Optional Retirement Plan for Higher Education (ORPHE) may purchase investment products; and
- certain limits on when a separated employee may withdraw money accumulated in a retirement account and deletes certain limits on the amount of such withdrawal.
On Feb. 27, The Senate Finance, Ways and Means Committee recommended SB 2016 for passage by and referred it to the Senate Calendar Committee for floor consideration. On March 2, the bill was placed on the Senate calendar for consideration on March 5.
Alaska. AK HB 83
is a bill that would create new DB tiers in the public employees’ retirement system and the teachers’ retirement system and allow certain employees to choose between the DB and DC plans of the two systems. It was introduced on Jan. 27.
Pending before the House State Affairs Committee.
Louisiana. LA HB 39
, a bill that would establish a hybrid retirement benefit structure for members of the state retirement systems first hired on or after July 1, 2020, was introduced on Jan. 29.
Pending before the House Retirement Committee.
New Hampshire. NH HB 1754
is a bill that would establish a state retirement plan for new members of the retirement system who begin service on or after July 1, 2019, and which would be structured as a DC plan. All new group I and group II members of the retirement system employed by the state and political subdivision employers on and after July 1, 2019 would be required to contribute to the DC plan as administered by the state treasurer, the department of administrative services, and a benefits advisory committee.
Placed on the House calendar.
Joseph A. Caruso, III, JD, MSPPM, is Government Affairs Counsel for the American Retirement Association.