This bill reduces the vesting period for retirement system benefits from 10 years to 5 years. It also allows members with 5 or more years of creditable service to retire on an ordinary disability retirement allowance and collect a vested deferred retirement allowance if they cease to be an employee or teacher for reasons other than retirement or death. The bill will take effect on July 1, 2024. The bill is estimated to decrease the unfunded actuarial accrued liabilities by $12.1 million but increase the present value of future benefits by approximately $11 million. This would lead to higher normal costs and an increase in employer contributions, with an estimated increase of $1,220,000 in FY 2026 and $1,260,000 in FY 2027. The bill would also result in an indeterminable increase in administrative costs in FY 2025. The fiscal impact of the bill on state and political subdivisions is not able to be separated, so it is shown together.

Statutes affected:
Introduced: 100-A:6, 100-A:10, 100-A:19-d