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SALT LAKE CITY (AP) -- A Utah state senator is proposing changes to the Utah retirement system that he says will help ensure its long-term stability.
Sen. Dan Liljenquist, R-Bountiful, is proposing a set of bills that would essentially do away with the state's defined-benefit pension system for new employees.
Instead, those hired after July 1, 2011, could either put 8 percent of their salary into a 401(k) type of program or put part of it into a defined benefit pension plan with greatly reduced benefits.
Public employee unions are pushing back, saying the economic crisis made the system shaky but it will recover over time and drastic proposals aren't yet warranted.
Audry Wood, executive director of the Utah Public Employees Association, said they don't oppose changes if they're needed. But she said it took 80 years to build the pension system "and in one legislative session we're going to go ahead and change it?"
The system covers 182,000 current and former public employees. The economic downturn created a $6.5 billion shortfall for the system.
"I kind of look at this like a chemical spill," Liljenquist said. "This is a disaster that has already happened. The cleanup is going to be extraordinarily expensive for a long time, so the first thing you do is contain it ... and then over time (clean it up)."
Liljenquist's bills also would remove the mandatory 30-year retirement date for police and firefighters, letting them continue work longer and earn retirement credit for their service. His measures also seek to stop pension payments to retired workers rehired by state or local governments.
The practice is known as double dipping and involves employees collecting a salary in addition to state retirement benefits. Current double-dippers would not be affected.
A November audit showed letting rehired employees collect pension benefits has cost the state more than $400 million in the past eight years and will cost nearly $900 million over the next 10.
Liljenquist said current state workers wouldn't see major changes.
"We are going to meet 100 percent of our obligations to current employees," he said.
Several public employee unions planned a rally for Saturday at the Capitol to oppose proposed changes to the retirement system.
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Information from: The Salt Lake Tribune
(Copyright 2010 by The Associated Press. All Rights Reserved.)
