Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY (AP) -- The Utah Senate passed two bills on Friday to overhaul the state's retirement system after the sponsor agreed to tweak one of them to address concerns from firefighters and police officers.
Senate Bill 63 would replace the defined-benefit pension plan for public employees hired after July 1, 2011, with a scaled-down option.
The bill from Sen. Dan Liljenquist, R-Bountiful, would provide a choice between a hybrid retirement plan with reduced benefits or a 401(k) plan that allows workers to contribute 8 percent of their salaries.
Under the hybrid plan, public safety employees like firefighters and police officers could retire after 25 years instead of the 35 years originally proposed.
"It's a reasonable compromise," Salt Lake City Police Chief Chris Burbank told The Associated Press. "We reached a point where I can say, you know what, I can live with that."
The other bill would bar Utahns who retire and are rehired after July 1, 2010, from collecting a pension and a paycheck at the same time, a practice known as "double-dipping." The Senate didn't have time to vote on Liljenquist's third proposal, Senate Bill 94, which would relieve employers of the requirement to add 1.5 percent of a state or school employee's salary into their defined-contribution plans.
The two measures passed Friday now go to the House for consideration.
The economic meltdown in 2008 left many pension funds shortchanged. The crisis stripped Utah of $6.5 billion, and returns in 2009 did little to recover losses.
Liljenquist has said that the number one goal of the sweeping legislation, about which he has received 1,000 e-mails, is to protect the state's current employees by freeing up future funds.
"We are basically going to be for a very long time cleaning up what happened in 2008," Liljenquist told the Senate this week.
Except for the adjustments made for public safety employees and some lengthy debate, the bills breezed through the Senate. But those who voted against them said the changes were rash.
"The hurry-up nature of this legislation may be a little premature," Sen. Jon Greiner, R-Ogden, told lawmakers on Thursday.
The financial crisis and changing demographics have also forced other states to go back to the drawing board for new ideas on retirement.
A recent report by the Pew Center on the States said that in 2000 roughly half of the states had fully funded pension systems. Fast forward to 2008, and only four still did.
It also pegged Utah's pension system as 84 percent funded, just above the 80 percent benchmark recommended by the U.S. Government Accountability Office.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
