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22LSO-0273
2022
STATE OF WYOMING
22LSO-0273
Numbered
2.0
HOUSE BILL NO. HB0095
State retirement plans-ad hoc payment.
Sponsored by: Representative(s) Harshman, Henderson, Olsen, Schwartz and Sweeney
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; providing an appropriation; 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 as provided in this act;
(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)
Wyoming law has provided, since the initiation of the largest state retirement 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 act was recreated in 1953 and both 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 a recognition of a moral and equitable obligation;
(v)
While the stability of Wyoming's 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 joint appropriations committee:
(i)
Subsequent legislative and board actions and other facts that 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 and contribution rates 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 benefit, contribution or other adjustment proposed by the board 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 under 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 increases in funding that are not currently provided by law;
(vii)
Recommended modifications to current law that provide parameters under which benefit adjustments 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 to provide either regular cost-of-living adjustments or ad hoc adjustments for retirees. The board shall consider the possibility of funding the endowments with any portion of investment returns that are
above the assumed rate of return used by the board in calculating the actuarial funding level of each plan and by using earnings from the investment of endowed funds.
(c)
The report required by this section shall be submitted not later than September 1, 2022.
(d)
The joint appropriations committee shall consider the report and recommendations required by this section and may develop legislation as the committee determines appropriate for introduction in the 2023 general session of the legislature.
Section 3.
As used in sections 1, 2 and 4 of this act, "public employee retirement plan" or "retirement plan" includes all retirement 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)
A single, additional payment shall be made on or before July 1, 2023 to each eligible person receiving a service pension, survivor's pension, retirement benefit, survivor benefit, death benefit or disability pension or benefit under
a retirement plan
other than the paid fireman A plan administered by the Wyoming retirement board under W.S. 15-5-201 through 15-5-209.
The additional payment shall be limited to persons who first began receiving benefits prior to July 1, 2021, either alone or in combination with a member or retired or disabled employee if the person is a survivor.
If the person is a survivor, the payment date shall be based on the initial retirement or disability benefit of the applicable employee.
Each payment to an eligible person shall be in an amount calculated by multiplying the eligible person'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, 2021, or if the person is a survivor for each year the applicable employee's benefit was effective prior to July 1, 2021, up to a maximum amount of three
percent (3%) of the existing annual benefit.
The additional payment under this section shall not be ongoing, cumulative or in any way affect any future benefits paid to any person.
(b)
There is appropriated five million dollars ($5,000,000.00) from the general fund to the board of the Wyoming retirement system for the purpose of making the payment as provided in subsection (a) of this section. This amount shall be allocated to each retirement plan on a proportional basis using the amount of payments calculated under subsection (a) of this section. This appropriation shall not be transferred or expended for any other purpose and any unexpended, unobligated funds remaining from this appropriation shall revert as provided by law on June 30, 2024. It is the intent of the legislature that this appropriation not be included in the board's standard budget for the immediately succeeding fiscal biennium.
(c)
Notwithstanding W.S. 9-3-454, any amount required to make the payment as provided in subsection (a) of this section in addition to the appropriation provided under
subsection (b) of this section shall be provided from amounts within the applicable retirement plans and then only in the amount necessary to make payments applicable to persons who receive benefits from the retirement plan from which the money is drawn.
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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HB0095