A bill to enhance Tier 2 Public Safety and Firefighter retirement benefits was passed during the 2019 legislative General Session and signed by the governor on April 2, 2019.
Here are a few important things to know about Senate Bill (SB) 129:
» It takes effect beginning July 1, 2020, and is subject to change.
» It applies to new and current employees in the Tier 2 Public Safety and Firefighter Retirement System, for benefits earned after July 1, 2020. These changes are not retroactive.
» It does not open a new window for employees who have worked beyond a year to change their selection between the Hybrid Option and 401(k) Option. The decision made during the first year remains irrevocable.
» The Retirement and Independent Entities Interim Committee will study the bill and may make recommendations for the 2020 legislative General Session.
In its current form, SB 129 does the following for the Hybrid Option (subject to change):
» Increases the multiplier from 1.5% to 2% on service earned after July 1, 2020. All service accrued prior to July 1, 2020, will still be multiplied by 1.5% for the calculation of benefits.
» Increases the employer funding from 12% to 14% of pay.
» Would result in employees paying the costs beyond the 14%. In its current form, employees would be required to contribute approximately 1.91% of their pay to fund the pension benefit beginning July 1, 2020.
» Allows employers to choose to pick up (pay for) the employee costs.
» Ends employer 401(k) contributions when costs exceed 14%, as they currently would.
In its current form, SB 129 does the following for the 401(k) Option (subject to change):
» Increases the employer 401(k) contribution from 12% to 14% of pay.
» Allows employers to choose to make supplemental 401(k) contributions.