The bill seeks to amend the retirement system for state employees, their beneficiaries, and legislators by adjusting the cost of living retirement adjustments (COLAs). For those who retired on or before December 31, 1967, the bill proposes a 1.5% annual COLA, while those who retired between January 1, 1968, and December 31, 1980, would receive a 3% annual COLA. The bill also introduces a provision for certain employees and beneficiaries to receive a compounded 3% COLA annually, while others would receive the lesser of 3% or the CPI-U increase, compounded annually. Additionally, the bill raises the cap on the retirement allowance subject to COLAs from $35,000 to $60,000, indexed annually based on the CPI-U or 3%, whichever is less, affecting employees not eligible to retire by September 30, 2009.

For retired teachers, the bill proposes a new provision granting a 4% annual increase on their base salary for ten years to those who have never received a COLA, with the ten-year period reduced for each year a COLA was received. After ten years of receiving the COLA, the annual increase would be reduced to 3% until the teacher's death. The retirement allowance cap would also be increased to $60,000. The bill is set to become effective upon passage, with the Legislative Council providing an explanation to clarify the intent and impact of the proposed changes.

Statutes affected:
6118: 36-10-35