Showing posts with label legislative session. Show all posts
Showing posts with label legislative session. Show all posts

Senate Bill 185

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I saw a brief note on local news that Gov. Parsons had signed a bill related to feral hogs and pension plans. Assuming this was some type of omnibus bill, can you provide information about any impacts on state pensions?
On June 6th, Governor Parson signed a variety of bills that cover many different subject areas. (View the news release on bills the Governor signed.)

The bill he signed affecting MOSERS is SB 185. We have information on our website summarizing it. This act provides continued eligibility for membership in MOSERS for employees of the Missouri Housing Development Commission and of the Environmental Improvement & Energy Resources Authority. There are no other changes to retirement provisions affecting any other members or retirees.

The bill about feral hogs is separate legislation; it is HB 655.

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70 & Out Rumor

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I was hearing that there may be a 70 & out for one to retire from Corrections? Is this true or another rumor....
 No, this is not true. MOSERS administers retirement benefits but we do not have the authority to change plan provisions. Any change to the Rule of 80/”80 & Out” (or any other state employee pension provisions) would require a change in the law. The 2018 regular legislative session ended on May 18th and there were no such proposed changes. Keep in mind that the Rule of 80/”80 & Out” is not the only way to reach normal retirement eligibility.

General state employees become eligible for normal retirement once they meet one of the following sets of age and service criteria:

MSEP Members
•         Age 65 + 5 years of service
•         Age 60 + 15 years of service
•         “Rule of 80” – (at least age 48) when age + years of service = 80 or more.

MSEP 2000 Members
•         Age 62 + 5 years of service
•         “Rule of 80” – (at least age 48) when age + years of service = 80 or more

MSEP 2011 Members
•         Age 67 + 5 years of service
•         “Rule of 90” – (at least age 55) when age + years of service = 90 or more at time of termination

You can view additional information for each plan on the Which Plan Am I In page of our website.

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MOSERS' Appropriations

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Now that the House has passed and sent to the Senate HB 2005, could you tell me whether the amounts appropriated for MOSERS ($417,959,249) include all of the amount requested by the MOSERS Board and, if not, what percentage of the request it does include.
Also, could you tell me whether the amount appropriated for MCHCP ($499,756,307) includes the amount requested by MCHCP to subsidize retired state employees' secondary insurance premiums as has been the case in past years?
Yes, the amount appropriated by the House Appropriations subcommittee in HB 2005 fully funds the employer contribution rate as certified by the MOSERS Board. HB 2005 has now been sent to the Senate and must be passed in the Senate and then signed by the Governor. Changes could still be made. We will monitor all bills related to retirement benefits and let our members know about changes, if any, that may affect them.

The House Appropriations subcommittee included $449,656,307 as the state’s contribution to MCHCP. Since health care is a benefit that we do not administer at MOSERS, we are not in a position to comment about whether or not it was the amount requested by MCHCP. Please contact MCHCP directly at (800) 487-0771 or www.mchcp.org for more information. 

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MSEP 2011 Retirement Eligibility

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I know that the 10 years vested has been reversed back to 5 years, however I'm inquiring where the process is with going back to 80 & out vs. 90 & out. Is this still on the table?
We are not aware of any plans to change retirement eligibility requirements.

The 5-year vesting for MSEP 2011 members went into effect on 1/1/2018, and MSEP 2011 members must be actively employed on or after 1/1/2018 to be covered by this change.

Members of MSEP 2011* will become eligible for normal retirement when they reach age 67 and have at least 5 years of service OR under the “Rule of 90,” which is when they are at least age 55 and their age and service equals 90 prior to leaving state employment.

The 2018 legislative session began January 3 and will end on May 18th. We do not know what might happen with individual bills during the legislative session, but we will monitor all legislation impacting MOSERS and inform our members of any changes that become law.

*Members of MSEP 2011 are those who were first employed in a MOSERS benefit-eligible position on or after January 1, 2011. 

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Sick Leave & Retirement

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Is there any discussion about allowing current employees to use sick leave hrs as time worked in order to retire earlier, rather than counting them at retirement for yrs of service? If so what type of time frame for implementation is being looked at.
No, not that we are aware of. Currently, you will get one month of credited service for each 168 hours of unused sick leave you have at retirement. While this will increase the amount of your benefit, unused sick leave cannot count toward eligibility for retirement. That is, the months of unused sick leave will not make you eligible for retirement sooner, but will increase the amount of your payment.

Any change to this, or any other state employee pension provision, requires passage of legislation by the Missouri General Assembly and approval by the Governor. Pre-filing of bills begins on December 1, 2017 and the 2018 legislative session begins on January 3, 2018. We do not know what might happen with individual bills during the legislative session but we will monitor all legislation impacting MOSERS and inform our members of any changes that become law.

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Pension-Related Legislation

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 We recently received two Rumor Central questions about pension-related legislation: 
Are you going to summarize the actual pension changes enacted by the legislature during the current session? And when will the summary be available?
I heard that the retirement vesting time has changed for FTE MOSER-eligible employees from 10 years to 5 years, effective Jan. 1, 2018. Any truth to that?
Yes, it is true that the legislature changed the vesting requirement for MSEP 2011 members, pending Governor Greitens’ approval. The Governor has until July 14 to approve or veto legislation. The Missouri House and Senate Truly Agreed and Finally Passed (TAFP) HCS SS SB 62 on May 11th. If signed by the Governor, the 10-year vesting requirement for MSEP 2011 members will be changed to 5 years. In order to do this, policy makers had to provide “offsets” so that the change would not increase costs for the state. To that end, the following offsets apply to new terminated-vested MSEP 2011 members*:
•       They are not eligible to receive service credit for any unused sick leave.
•       If they die prior to normal retirement eligibility, benefits will not be payable to their survivor until the member would have become eligible for normal retirement.
•       They will not receive a cost-of-living adjustment until the 2nd anniversary of their retirement.

The same bill also contains language authorizing a pension buyout to terminated-vested members. Below is a summary:

•       The legislation gives the MOSERS Board the authority to establish and offer a buyout program to terminated vested members in lieu of retirement annuity benefits otherwise payable – but it does NOT require the board to do so.
•       Members who make an election to accept such a buyout will forfeit their credited service and, if they return to state employment, will be considered a new employee.
•       The authority for the board to establish such a program ends 5/31/2018.
•       If the MOSERS Board establishes a buyout program, it is anticipated that we will send packets to eligible terminated-vested members in September 2017.

MOSERS will provide more information via our website and social media when the Governor acts on this legislation. Please ensure that both your email and mailing address are up to date with MOSERS so that you will receive important information from us if you are affected by any new legislation.

*A terminated-vested member is someone who has left state employment but has enough service to qualify for a pension benefit in the future once they also reach the age requirement for retirement. 

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MOSERS 2018 Funding

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We recently received two questions on this topic:
Was MOSERS fully funded for 2018?

Does the budget that the legislature passed and sent to the governor contain an appropriation for the full amount requested by MOSERS to fully fund the retirement system?
Yes, the budget committee agreed to fully fund MOSERS’ budget request for FY18. The appropriations bill was Truly Agreed to and Finally Passed and sent to Governor Greitens on Thursday May 4th.

For background information about our funding, see the Rumor Central posts Appropriations for Pension Funding  from February and FY18 Funding for MOSERS from March.

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Proposed Legislation for MSEP 2011 Members

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My question is in regard to SB 333 and HB 729. I am currently a member of MSEP 2011 and have 4 years and 8 months of service time. If these bills pass and are signed, will I become vested in 4 months or will I become vested after 5 more years of service? Thank you.
As currently written, if House Bill 729 &/or Senate Bill 333* pass, the vesting period will be reduced from 10 to 5 years of service, effective January 1, 2018, for current and future active members of MSEP 2011 (those members first employed in a MOSERS or MPERS benefit-eligible position on or after January 1). So, in your particular case, if this legislation were to pass and you are still employed, you will become vested on January 1, 2018.

Eligibility for benefits for any MSEP 2011 member who has already or who will terminate employment before the effective date of the bill (January 1, 2018) is based on the laws in effect on that person’s termination date**

Please note that this is proposed legislation. It must be passed by the Missouri House and Senate and approved by the Governor. If it is passed, it could also be change during the process. We will monitor all legislation impacting MOSERS and inform our members of any changes that become law. The 2017 legislative session ends on May 12, 2017.

*Language to reduce the MSEP 2011 vesting requirement is also contained in HCS SS SB 62, HCS SB 394, and SCS HCS HB 831.
**Termination date is your last day of work in a MOSERS (or MPERS) benefit-eligible position, as reported by your employer.

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Can Politicians Change Retiree Pay?

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Can state politicians change/reduce a retirees established retired pay? I have heard that MO retired state pay and benefits are going to be looked at it the near future.
No, members’ accrued benefits are protected by law. There are currently some proposed bills making their way through the Missouri legislature that would change vesting requirements for members of the MSEP 2011 only, but would not affect members or retirees under the MSEP or MSEP 2000. We do not know if any proposed legislation will pass or not but we will monitor all legislative proposals that may impact MOSERS and inform our members of any changes that become law. The 2017 legislative session ends on May 12, 2017.

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News Tribune Article

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 news tribune article dated april 9, 2017 - "Schmitt promotes mosers revisions" quote from board member and state treasurer Schmitt "Missouri's troubled pension system is the single greatest threat ...long term solutions to fix the problem of our insolvent public retirement system before it's too late". from a post dated feb 7,2017 "is mosers properly funded" states the mosers board of trustees monitors all financial aspects of the plan...to stabilize plan funding and provide sustainability for the future. our long term plan is SOLID and the objective data supports that conclusion. confused - is the system a "troubled pension system with problems of a insolvent retirement system" or a system that is SOLID and secure.
The MOSERS board and staff are working to KEEP the retirement system solid and secure. The April 9 article in the News Tribune references a proposal to reduce the system’s long-term liability by offering a voluntary lump-sum payment (rather than a monthly pension) to former state employees who will be eligible for a pension benefit at some point in the future. On average, these terminated-vested members left state employment at age 38 with about 10 years of service, and they will become eligible to begin receiving a MOSERS benefit at age 62. The specific details of this potential offer must still be determined but it will be designed to reduce the system’s long-term liability.

The lump-sum proposal is in addition to other recent action taken by the MOSERS board regarding future assumptions about investment income and retiree life expectancy which will result in increased costs to the state in the short-term but keep the system on solid ground for the future. Additionally, in 2010, the Missouri Legislature changed plan provisions for all new employees hired on or after January 1, 2011. Changes include 4% contributions from employees, a later retirement age, and discontinuation of subsidized service purchases, which significantly reduce costs going forward.

Currently, the Missouri Legislature is making decisions about the FY18 budget. MOSERS submitted our budget request for FY18 as we do as part of the normal process each year. The amount determined by the actuaries and certified by our board was $393 Million. The amount the House funded is $361 Million – about $32 Million less than requested. The budget now moves to the Senate. If the Senate approves the full amount we requested, or any amount other than the amount approved by the House, the House and Senate will go to conference committee to come to agreement on the appropriation amount.

Treasurer Schmitt has emphasized how important it is for the legislature to fully fund the pension system. NOT funding MOSERS could be a threat to the state’s AAA bond rating. If the legislature decides to not fully fund MOSERS’ FY18 budget request, it will have no immediate impact on benefit payments to retirees, however, a pattern of inadequate funding certainly could have negative long-term consequences for the retirement system.

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SB 228 & Current MOSERS Retirees

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I am writing in regard to Senate Bill 228. I am concerned how this will impact current retirees, who chose the MSEP 2000 plan. I am especially concerned about what this says on page 6, line 52, #7. This would affect the COLA rate and cap it at 2% rather than the current 4%. Will this affect those of us, who are currently retired under the MSEP 2000 plan or future retirees? 
No. SB 228, in its current form, would NOT affect current retirees. It would affect only future retirees who first begin state employment on or after January 1, 2018 (see lines 1-4 on page 5). We will continue to monitor any pension-related legislation throughout the rest of the legislative session, which ends on May 12. Print Friendly and PDF

Retroactive Vesting for MSEP 2011 Members?

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Assume HB 729 passes. How would that bill affect an employee who was hired after 2011, now has more than 5 years of service, but leaves state employment prior to passage of the bill. Would that person be vested retroactively?
It would have no effect on such a person and, no, as it is currently written, HB 729 does not allow for retroactive vesting. Eligibility for benefits for any MSEP 2011 member who has already or who will terminate employment before the effective date of the bill (currently 1/1/2018) is based on the laws in effect on that person’s termination date*. Non-vested service is considered forfeited.

Assuming they did not take a refund of their member contributions after termination, if such a member returns to work in a MOSERS (or MPERS) benefit-eligible position, their forfeited service will be restored and combined with their new service after they work continuously for one year in a MOSERS (or MPERS) benefit-eligible position.  So, if the vesting requirement was 10 years when they left but they came back in a benefits-eligible position and worked continuously for at least one year, they would then fall under the five-year vesting rule.

Example:  Let’s say Kathy worked in a MOSERS benefit-eligible position from January 1, 2011 until March 31, 2016 (5 years & 3 months). HB 729 passed as currently written. Kathy returns to work in a MOSERS benefit-eligible position on February 1, 2018 and works continuously for one year. On February 1, 2019 (with a total of 6 years & 3 months), her previous service will be restored and she will become vested, which means she is eligible for a future pension benefit from MOSERS. She can begin drawing her pension benefit once she also meets the age requirement and completes the retirement process.  Because the formula for MOSERS pension benefits uses service in the calculation (Final Average Pay x Service x Multiplier = Monthly Base Benefit), the more service she has, the higher her benefit will be.

Please note that this is proposed legislation. It must be passed by the Missouri House and Senate and approved by the Governor. If it is passed, it could change during the process. We do not know what might happen with individual bills during the legislative session but we will monitor all legislation impacting MOSERS and inform our members of any changes that become law. The 2017 legislative session ends on May 12, 2017.

*Termination date is your last day of work in a MOSERS (or MPERS) benefit-eligible position, as reported by your employer.



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Possible Vesting Legislation?

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I've heard a rumor that the 10 year minimum to qualify for retirement benefits may go back to 5 years. Is this true? 
There is proposed legislation to do so. If passed by the General Assembly and approved by the Governor, House Bill 729 &/or Senate Bill 333 will reduce the vesting period from 10 years of service to 5 years of service for current and future active members of MSEP 2011 (those members first employed in a MOSERS or MPERS benefit-eligible position on or after January 1, 2011).

The legislature is on break this week, but House Bill 729 is scheduled for a hearing on March 29th in the Rules—Administrative Oversight committee. The Senate Committee Substitute for SB 333 is on the Formal Calendar - Senate Bills for Perfection.

For additional information, see a previous Rumor Central post on HB 729 from March 15.

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FY18 Funding for MOSERS

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 This week, we received the following questions from different members:
I read an article in the newspaper discussing how some legislators are not wanting to fully fund MOSERS retirement in the new budget. If that were to happen, what implications does/could that have for employees who have already retired or who are close to retirement? Also, would that create the possibility that retirement benefits for MO state employees could be cut in the future as they have been for retirees in certain municipalities with underfunded retirement plans.

My husband said he viewed a newscast that said that the MO Retirement fund has a shortfall of $45 million. Is that true? If so what affect will that have on our retirement?

Today on KY3 noon news, I caught a sentence only, re: MO State Employee Pension fund being under funded. Republican Leg is suggesting even less funding? Since this pension is the majority of my retirement income, what did I really hear? I'm am concerned!

In light of the budget crisis and the shortfall in the pension fund, are state retirees at risk of having their pension amount cut or losing the pension entirely? I would appreciate a heads-up in case I need to start looking for employment.
As we do each year, MOSERS submitted its Fiscal Year 2018 (FY18) budget request to the State. In the initial phase of the budget process, the House Budget Committee chose to not fully fund the amount that was determined by the actuary and certified by the MOSERS Board. Our budget request is still pending in the House. Once the full House has finalized its version, the Senate will weigh in with its budget recommendations. If the legislature decides to not fully fund MOSERS’ FY18 budget request, it will have no immediate impact on benefit payments to retirees, however, a pattern of inadequate funding certainly could have negative long-term consequences for the retirement system.

For additional information, see this Rumor Central post from February, Appropriation for Pension Funding, and our Key Facts about MOSERS’ funding principles. Print Friendly and PDF

Impact of House Bill 729

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Please explain the impact HB729 would have on state employees and retirees if it were to pass. Thank you.
HB 729 contains provisions affecting members of the MSEP 2011* only. This bill decreases the vesting period for retirement benefits for MSEP 2011 members from 10 years to 5 years.

Because MOSERS and MPERS** do not currently have a funded ratio (assets divided by liability) of at least 80%, state statute requires the bill to contain cost-saving provisions to offset the increase in plan liability associated with the reduced vesting period. Offsets contained in HB 729 affect only MSEP 2011 members who leave state employment after becoming vested (but prior to attaining retirement eligibility).

It is important to note this bill will not affect active state employees or retirees except that MSEP 2011 members will become vested in a retirement benefit in 5 years rather than 10 years. If an MSEP 2011 member separates from state service after becoming vested, then offset provisions will apply to that individual. For more detailed information you can follow all HB 729 actions on the Missouri House website.

Please note that this is proposed legislation. It must be passed by the Missouri House and Senate and approved by the Governor. If it is passed, it could change during the process. We do not know what might happen with individual bills during the legislative session but we will monitor all legislation impacting MOSERS and inform our members of any changes that become law. The 2017 legislative session ends on May 12, 2017.

* MSEP 2011 members are those hired for the first time in a MOSERS or MPERS benefit-eligible position on or after January 1, 2011.
**MPERS is the MoDOT & Patrol Employees’ Retirement System

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Healthcare Retirement Incentive

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Is there any truth to the rumor that there could possibly be insurance coverage for retirees until they are eligible for Medicare? 
There was a healthcare retirement incentive (HB 1134) that was introduced in the 2015 legislative session to subsidize retiree health care premiums for certain state employees, but it didn’t pass. It would have to be reintroduced in the current legislative session to be considered again. We are not aware of any similar proposed bills.  

Specific questions regarding health care benefits should be directed to your health care provider, which, for most state employees, is Missouri Consolidated Health Care Plan (MCHCP).

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MOSERS' Funding

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Could you please provide information on the bills that will going through the legislature concerning funding of the retirement system. This information would be helpful for communication with our legislators etc.
MOSERS is funded, in part, through an annual appropriation that must be vetted within the appropriation process of the Missouri General Assembly.  While that bill has not yet been introduced to date, the MOSERS appropriation will be included in “House Bill 5”.  You will be able to find that bill (once introduced) via the House of Representative bill page http://www.house.mo.gov/billlist.aspx.
 
To track other pension related proposals, you may be interested in accessing the Legislative Status Report maintained by the Joint Committee on Public Employee Retirement (JCPER) at http://jcper.org/weekly-pension-legislation/ which is updated weekly. We will keep our members informed through our website, newsletters, and social media if there is any news on retirement-related legislation. The 2017 legislative session ends on May 12, 2017.

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Pension Funding

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Very concerned, if Mosers is asking the Legislators for more money, what's to keep them from saying they don't want to fund our retirement any longer and we end up with reduced benefits, like Kansas. I planned my retirement based on this, this is the reason I worked for lower wages, I'd like it to be there when I do retire. Thank you for your insight.
The state of Missouri has been consistent in fully funding the contribution rate recommended by the actuary and certified by the MOSERS Board of Trustees. You may be interested to read a similar question we answered last Friday.

As a vested member of MSEP/MSEP 2000, your accrued pension benefits are protected by law and cannot be reduced or modified.

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Financial Health of Pension Plan

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I have heard that MOSERS is asking for over $40 million in additional funding from the State Legislature for the next fiscal year. Is this the case? And if so, why is the additional funding needed? Is the State Retirement fund solvent?
Thank you for your inquiry regarding MOSERS’ funding. Your diligence in maintaining an understanding of MOSERS’ overall fiscal health is commendable. 

To provide some background, money comes into the MOSERS trust fund in two ways: 1) Contributions by the employer and from employees in the MSEP 2011 and the Judicial Plan 2011, and 2) Investment Earnings. The two are linked. Over the past 30 years, investment earnings have accounted for approximately two-thirds of MOSERS’ revenues. Each year, the Missouri General Assembly appropriates an employer contribution to MOSERS typically at the level of annual employer contribution rate certified by the MOSERS’ Board of Trustees.  For more information, see our Key Facts regarding funding of MOSERS.

During 2016, the MOSERS Board of Trustees reviewed the plan’s experience study conducted for the five-year period ending June 30, 2015. Recommendations associated with this experience study were offered for the Board’s review. After careful consideration, the Board voted to:
    • Reduce the plan’s investment rate of return assumption from 8.0% to 7.65%, and
    • Strengthen the mortality tables associated with potential increased membership longevity.
These modifications were made to more closely align the fund with future capital market expectations as well as potential longer lifespans of members. Once incorporated, these modifications contributed to an increase in employer contribution requirements for FY18. The employer contribution rate increased from 16.97% to 19.45% of payroll. This change results in an approximate dollar increase in MOSERS’ appropriation request of $47 million as compared to the FY17 appropriation. As a percent of the total state budget, MOSERS’ appropriation represents approximately 1.4% of that total budget which has been consistent for more than a decade.

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2016 Legislation

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Are they thinking of reintroducing the bill again this year? bill 1134
HB 1134 was introduced in the previous legislative session as a retirement incentive. At this point, nothing has been proposed similar to HB 1134. To track pension related proposals, you may be interested in accessing the Legislative Status Report maintained by the Joint Committee on Public Employee Retirement (JCPER) at http://www.jcper.org/legsheet.pdf  which is updated daily once bills are pre-filed, which began on December 1. The 2016 legislative session began on January 6. Print Friendly and PDF