State retirement plans-ad hoc payment.

21LSO-0328
2021
STATE OF WYOMING
21LSO-0328
Numbered
2.0

HOUSE BILL NO. HB0221

State retirement plans-ad hoc payment.

Sponsored by: Representative(s) Harshman, Henderson, Olsen, Schwartz and Sweeney and Senator(s) Pappas

A BILL

for

AN ACT relating to public employee retirement plans; providing for a single, additional, noncumulative benefit payment under the Wyoming Retirement Act, the Wyoming State Highway Patrol, Game and Fish Warden and Criminal Investigator Retirement Act and the Firemen's Pension Account Reform Act of 1981; specifying legislative intent and making legislative findings; requiring a study of plans administered by the Wyoming retirement system board or director; requiring reports and certifications as specified; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.

(a)

It is the intent of the legislature to:

(i)

Provide a single, benefit payment to retirees within specified Wyoming public employee retirement plans;

(ii)

Review public employee retirement plans to determine if adjustments for inflation can be made while still keeping the plans actuarially sound.

(b)

The legislature finds:

(i)

Wyoming public employee retirement plans have existed since as early as 1927.

Cost
‑
of
‑
living or other benefit adjustments have been made in various public employee retirement plans on an ongoing basis since as early as 1953;

(ii)

2012 Wyoming Session Laws, Chapter 107, made significant modifications to cost
‑
of
‑
living and other benefit increases in public employee retirement plans. While finding that the actuarial funding levels of the Wyoming plans were higher than many public employee
retirement plans in other states, the legislature found that "as constructed by statute, the Wyoming plans were not intended to and cannot support cost
‑
of
‑
living or other benefit increases;"

(iii)

The 2012 enactment removed the authority of the board of the Wyoming retirement system to provide cost
‑
of
‑
living adjustments and placed further restrictions on cost
‑
of
‑
living adjustments.

Since the 2012 enactment, no cost
‑
of
‑
living adjustments or other benefit increases have been made under any of the plans subject to the restrictions imposed by that enactment;

(iv)

For the largest retirement plan, Wyoming law has provided, since the initiation of that plan in 1949, that the enactment of the plan shall not constitute a contract or create other rights other than to receive a return of contributions upon withdrawal.

The recreated act in 1953 reiterated that no contract was created and provided that the state was not incurring any future obligation or liability other than to make the employer contributions specified.

Those provisions have remained through the current day.

However, the legislature is
authorized to make appropriations to satisfy moral obligations of the state.

State v. Carter
, 215 P. 477 (Wyo. 1923). Payment under these retirement plans and this act is not a gift to the employee but is at least in part a recognition of a moral and equitable obligation;

(v)

While stability of retirement plans is critical, fair treatment of public employees is also important in order to employ and retain dedicated employees, as recognized by past legislative actions.

Section 2.

(a)

The board of the Wyoming retirement system shall review the findings underlying the enactment of 2012 Wyoming Session Laws, Chapter 107 and report to the legislature:

(i)

Subsequent legislative and board actions which affect the findings of the 2012 enactment;

(ii)

The effect of inflation on retirees since the last benefit adjustments were provided to retirees in each public employee retirement plan;

(iii)

Eligibility of retirees under each of the plans for social security benefits and the effect that eligibility for social security benefits:

(A)

Was and is considered in establishing a plan's benefits, contribution rates and pay provisions for active employees;

(B)

Has in offsetting benefit purchasing power reduced as a result of inflation.

(iv)

Existing and projected funding ratios for each retirement plan, under current law and under any recommended benefit, contribution or other adjustment for each plan;

(v)

An explanation of each plan, providing:

(A)

The contribution rates by employer and employee and identifying mandated employee "out
‑
of
‑
pocket" contributions;

(B)

An explanation of eligibility requirements for normal and early retirement and disability benefits and how benefits are calculated;

(C)

Annual benefits paid;

(D)

Historical changes to each plan; and

(E)

Number of active, inactive and retired participants of each plan.

(vi)

Funds needed to fund each plan at an actuarial funded ratio of one hundred percent (100%) at the time of the report and at a thirty (30) year projection, and benefit adjustments that would reach these ratios without additional increases in funding not currently provided in law;

(vii)

Recommended modifications to current law that provides parameters under which any benefit adjustment may be authorized, including:

(A)

Recommended actuarial funded ratios;

(B)

An index by which to measure true cost increases or decreases for retirees;

(C)

Minimum and maximum adjustments over specified periods and the immediate and projected cost of the adjustments.

(b)

The board shall include within its review the feasibility of establishing an endowment within each retirement fund or account funded by a portion of investment returns, above the assumed rate of return used by the board in calculating the actuarial funding level of each plan, and using earnings from the investment of endowed funds to provide either regular cost-of-living adjustments or ad hoc adjustments for retirees.

(c)

The report required by this section shall be submitted not later than September 1, 2021.

(d)

The joint appropriations committee shall consider the recommendations of the board of the Wyoming retirement system and may develop legislation as the committee determines appropriate for introduction in the 2022 budget session.

Section 3.

As used in sections 1 and 2 of this act "public employee retirement plan" or "retirement plan" includes all plans administered by the Wyoming retirement board, the volunteer firefighter, EMT and search and rescue pension plan under W.S. 35
‑
9
‑
616 through 35
‑
9
‑
628 and the paid firemen plan A administered by the Wyoming retirement board under W.S. 15
‑
5
‑
201 through 15
‑
5
‑
209.

Section 4.

A single, additional payment shall be made on or before July 1, 2022, to each eligible individual receiving a service pension, survivor's pension, retirement benefit, survivor benefit, death benefit or disability pension or benefit under
the Wyoming Retirement Act, the Wyoming State Highway Patrol, Game and Fish Warden and
Criminal Investigator Retirement Act or the Firemen's Pension Account Reform Act of 1981
as provided in this section.

The additional payment shall be limited to individuals who first began receiving the applicable benefit prior to July 1, 2020, either alone or in combination with a member or retired or disabled employee if the individual is a survivor.

If the individual is a survivor, the payment applicable benefit date shall be based on the initial retirement or disability benefit of the pertinent member.

Each additional payment to an eligible individual shall be calculated by multiplying the eligible individual's existing annual benefit by one
‑
tenth of one percent (0.1%) for each year his retirement or disability benefit was effective prior to July 1, 2020, or if the individual is a survivor for each year the pertinent member's or employee's benefit was effective prior to July 1, 2020, up to a maximum amount of three percent (3%) of the existing annual benefit.

The additional payment under this section shall not be ongoing or cumulative.

Section 5.

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

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HB0221