Thursday, May 30, 2013

SUAA Mini Briefing


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Sitting in the Senate or House Gallery always provides a view of lawmaking that most of you cannot imagine. During these final days of session, passing legislation is sometimes done a bit differently than nearly everyone realizes. This Mini Briefing provides information as to where legislation is at this moment - in real time. However, the latest action of the following bills might have changed before this email is even read by you.

SB 1 - House Speaker Madigan's pension reform sits in the Senate on order of Concurrence.

SB 1515 - passed both Houses; Specifies that the procurement of the program of group health benefits for Medicare-primary members and their Medicare-primary dependents by the Department of Central Management Services is subject to the approval of the applicable Chief Procurement Officer.

This basically allows the CMS Chief Procurement Officer to by-pass the Commission of Government Forecasting and Accountability when securing bids for the State sponsored proposed Medicare health insurance.

SB 1687 - Cost shifting is still waiting on the final language, but is on Second Reading in the House as a Floor Amendment. Previously it was SURS return to work bill; however, it was shelled this past Sunday night.

SB 2404 - Senate President Cullerton's pension reform bill sits in the House Rules Committee.

Now possibly making their way through the Senate are the three Madigan bills. These bills along with Cost Shifting could be the pension deal for now:

HB 1154 - provides that pensionable earnings shall not exceed the Social Security Wage Base (wage base is $113,100 for FY 13). Tier 1 participants that are receiving earnings exceeding the social security wage base as of the effective date are grandfathered and will be limited to their annual earnings rate on the effective date. Participants subject to a collective bargaining agreement or employment contract shall be exempt from this limitation until the expiration of the existing agreement or contract. No calculation of benefit shall include earnings in excess of this limitation.

HB 1165 - reforms automatic annual increases provided to Tier 1 participants and Tier 1 retirees. Members receiving an annuity of less than $25,000 a year shall continue to receive a 3% compounded automatic annual increase, members receiving an annuity of $25,000 or more shall receive an automatic annual increase of $750. Members shall not be eligible for an automatic annual increase until the January 1st following attainment of age 67 or the January 1st following the 5th anniversary of the annuity start date. Automatic annual increase received prior to the effective date are protected and not diminished.

HB 1166 - reforms Tier 1 participants’ normal retirement age. The following adjustments apply to Tier 1 participants retiring after July 1, 2013:

·         Members age 45 or older on the effective date shall not be subject to any delay in retirement eligibility;
·         Members age 40-45 on the effective date shall be subject to a 1 year delay in retirement eligibility;
·         Members age 35-40 on the effective date shall be subject to a 3 year delay in retirement eligibility; and
·         Members younger than age 35 on the effective date shall be subject to a 5 year delay in retirement eligibility.

Appropriations are moving smoothly except for the Republicans acknowledging that they have been mostly left out of discussions especially in those that refer to Higher Education. $35 M from the Higher Education budget was given to Elementary and Secondary Education. Accordingly it was because the State supported universities have the opportunity to raise tuition and fees. The reduction seems to leave all those participating in the decision satisfied and the higher education appropriation flat-lined (same as last year). Detailed information is in HB 208 Amendment 1.

For those of you who are wanting more information check out FY 2014 Group Health Insurance Report (click on title).

May 31st is the deadline to make health insurance changes to CMS.

Title: SUAA Mini Briefing
Source: State University Annuities Association
Date: May 29, 2013

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