Under the legislation, there would be a minimum retirement age of 55 for state and local government workers, and a worker’s age and years of work experience would have to total at least 80 to retire with full benefits, according to Bloomberg. For educators, retirement eligibility depends on when a teacher started work. There would be a minimum age of 55, with combined age and work experience equaling 75 for those hired before June 30, 2010. For those in the Education Retirement Board pension system after that date, there would be a minimum age of 55 but a combined work and age requirement of 80.
The news report said the legislation also reduces the cost-of-living adjustment for Public Employees Retirement Association-covered workers with less than five years of experience. Two years after they retire, they qualify for pension increases of 0.75% of the consumer price index, but it can be no more than 3%. Currently, PERA retirees automatically get 3% yearly cost-of-living adjustments, and that wouldn’t change for workers with more than five years of experience or those already retired.
The proposed cost-of-living adjustment for PERA is in line with what’s provided for ERB-covered employees.
About 35,000 employees would be affected in the pensions administered by the Public Employees Retirement Association and the Educational Retirement Board, according to an analysis by the Legislative Finance Committee, Bloomberg said. However, the changes would not apply to police, firefighters, judges and legislators.PERA has unfunded liabilities of about $3.4 billion and ERB has $4.9 billion. The funded ratio is about 66% for ERB and 78% for PERA.