House Republican Appropria� ons Commi� ee
The Chairman’s Report
State Budget Update: June 14, 2010
House Bill 2497 proposes to make changes to the methodology to calculate the employer contribu� on rates of the
state’s two pension systems -- the Public School Employees’ Re� rement System (PSERS) and the State Employees’
Re� rement System (SERS). The bill would address the pending spike in the employer contribu� on rates for the two
systems by incrementally increasing the rates to help lessen expenditures in the state budget and for school districts.
House Republicans have asserted that any pension-related legisla� on must also contain necessary reforms to help
the state be� er manage its future expenses. In turn, an amendment to House Bill 2497 has been dra� ed (A07493)
that would cover several key reforms. This amendment was dra� ed through bipar� san eff orts.
Rep. Bill Adolph
House Bill 2497
As introduced by Democrat Appropria� ons Commi� ee Chairman Rep. Dwight Evans, this legisla� on would make
the following changes to both SERS and PSERS:
- Re-amor� ze all unfunded liabili� es over a 30-year period.
- Establish a fi nal contribu� on rate for fi scal year 2010-11 at 5 Percent for SERS and 5.64 Percent for PSERS
(This includes the .64 Percent for premium assistance).
- Implement limits on the increases in the employer contribu� on rates. Annual Increases would be collared
at the following rates in the coming fi scal years:
- 2011-12: 3 Percent growth over prior year.
- 2012-13: 3.5 Percent growth over 2011-12.
- 2013-14 and Therea� er: 4.5 Percent over prior year.
- Change the asset smoothing period to 10 years for PSERS. The SERS asset smoothing period will remain at
fi ve years.
Pension Reform Measures - Amendment A07493
The following is a summary of the amendment to HB 2497 to refl ect reform measures being proposed to the state’s
pension systems (SERS and PSERS). Changes will only impact “new hires” and will not eff ect the benefi ts of current