|Issue||House Bill 525||Senate Bill 2024|
|Retirement Age for Investment Plan Members||Normal retirement age is the date a member attains the normal date or is vested in the investment plan, whichever is later.||Normal retirement age is the date a member attains the normal date or is vested in the investment plan, whichever is later.|
|Retirement Date for Special Risk Class Members||
Changes normal retirement date for Special Risk class members to retroactively apply to members hired on or after 7/1/11 to:
* Age 55 and completes the required years of service for vesting
* Age 50 and completes 25 years of creditable service in the Special Risk Class; or
* Age 52 and 25 years of creditable service, including up to 4 years of military service.
Changes normal retirement date for Special Risk Class members initially enrolled after 7/1/12 to:
* Age 55;
* Age 48 and 25 years of service; or
* Age 52 and 25 years of service, including up to 4 years of military service.
|Vesting||Increases amount of time needed to vest in the pension plan from 8 to 11 years for those enrolled in FRS on or after 7/1/12. Also increases years of service for disability retirement for members initially enrolled on or after 7/1/12 to conform to changes for vesting in the pension plan. Clarifies that the vesting schedule solely applies to pension plan members.||Increases amount of time needed to vest from 8 to 10 years for those enrolled in FRS on or after 7/1/12.|
|Loans and Hardship Withdrawals||
For purposes of State University System Optional Retirement Program (SUSORP), clarifies that prohibition on hardship loans does not apply to:
* A requested distribution for retirement;
* A mandatory de minis distribution authorized by the administrator; or
* A required minimum distribution provided pursuant to the Internal Revenue Code.
|Prohibited in the FRS and the State University System Optional Retirement Program.|
|Deferred Retirement Option Program (DROP)||Adjusts DROP deferral ages for members enrolled after 7/1/11, for those entering DROP based on years of service instead of normal retirement age. Makes DROP deferral age 5 years before normal retirement age - age 55 for Special Risk Class members and age 60 for all other members, which will line up the DROP deferral age with normal retirement ages.|
|Retirees||Retirees of the SUSORP employed on or after 7/1/10 are prohibited from being reenrolled as a renewed member of a state-administered retirement system.||Retirees who are a member of the investment plan or the State University System Optional Retirement Program who are employed after 7/1/12, are renewed members of the Regular Class of the investment plan. However, if reemployed in a position eligible for participation in the SUSORP or the SCCORP, the member becomes a renewed member in one of those programs.|
|New Hires||Provides that employees hired on or after 7/1/12, by an employer who participates in FRS, automatically default into the investment plan. Employee may elect to participate in pension plan, but election must be made by last business day of the 5th month after employee's hiring.|
|Distributions||Members of the State University System Optional Retirement Program may receive a distribution of up to 10% of his/her benefit after termination for one calendar month.|
|Benefit||Members of the SUSORP may receive payment of benefits from either annuity contracts or investment contracts. Defines benefit as a distribution taken by a member or surviving beneficiary, funded in part or in whole by employer and employee contributions. A rollover distribution to another qualified plan qualifies as a distribution. A member of the SUSORP may not receive benefits funded by voluntary personal contributions until after termination from employment for 3 calendar months.||Defines the term benefit to clarify when distributions received by a member he/she is prohibited from enrollment as a renewed member in a state-administered system.||Contribution Rates||Revises the required contribution rates for the pension plan and the required employer contribution rates to fund the unfunded actuarial liability of such plan.|