News Column

Texas Lawmakers to Leave State Retirement Age Alone

May 8, 2013

A Texas House leader is backing off from a controversial plan to increase the age at which most state workers could retire to get full pension benefits.

When House Bill 1882 comes to the floor Wednesday, it will be changed so that only new hires will be subject to rules setting the minimum retirement age at 62, said Pensions Committee Chairman Bill Callegari, R-Katy.

"There was just a lot of opposition to changing the plan for existing employees," Callegari said. "If I were an employee, I'd have a problem with changing things midstream, so we said let's try to be fair."

Nearly two-thirds of current state employees who work outside of higher education -- including prison guards, child abuse investigators and legislative staffers -- would have been affected by the retirement eligibility changes in the version of the bill that cleared Callegari's committee.

To retire now, longtime employees have to satisfy the Rule of 80 -- years of service plus age must equal 80 -- with no minimum age. But the bill would have required many of them to work until 62 for full benefits, about a decade longer for people who started with the state in their early 20s.

That approach effectively penalized people who made a career with the state but were still too young to be exempt from the new rules, said Gary Anderson, executive director of the Texas Public Employees Association.

The changes, which mirror what a Senate committee approved two weeks ago, were aimed at improving the financial condition of the Employees Retirement System of Texas while protecting the pension against political attacks.

If everyone chips in a little more, that goal can still be achieved even with the looser grandfathering provisions, Callegari said. Details on the new proposal were still being worked out Tuesday.

"We've got to take steps now to make sure going forward that we are secure," Callegari said.

The $23 billion Employees Retirement System has ample resources to cover its long-term obligations, but it has an "unfunded liability" of $6 billion that will increase without some structural changes.

Anderson said his members are willing to help protect the pension by contributing more if the state does the same.

"It needs to be done. There needs to be improvements made. Every employee acknowledges that," Anderson said.

State agency leaders also appear willing to find money within their existing budgets to put toward the pension fund to keep midcareer employees.

The Texas State Employees Union, however, will not support the bill even with the changes because the state is contributing too little, said the union's organizing coordinator, Seth Hutchinson.

"It is a step in the right direction, but it's still not where we need to be," Hutchinson said of Callegari's new proposal. "It's always been the state employees who have been asked to sacrifice when the state hasn't done any of the sacrificing."

The Senate has not moved on its Employees Retirement System bill. So far, the upper chamber has been focusing on a separate bill addressing the Teacher Retirement System of Texas, which could be voted on at any time.

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Source: Copyright Austin American-Statesman (TX) 2013