Senate Bill 195

The Senate Retirement and Independent Entities Committee presented Senate Bill 195 today. This bill eliminates the 1.5% employer contribution to public employees' 401(k) for one year. Employees who were incentivized to leave the contributory system for the non-contributory system are excepted from the cut.

The bill's sponsor, Senator Dan Liljenquist, R-Davis, offered the bill for public comment, as required, but he then suspended committee debate by motioning to adjourn. The bill was not voted out of committee; however, it may be brought to the Senate floor by a majority vote. Liljenquist has made SB 195 an option for solving the state's budget problems.

Senate Bill 145

Sen. Greiner’s “Public Safety Retirees’ Death Benefit Revisions” passed the Senate last week, and passed the House today. This bill allows a public safety retiree to choose a death benefit of 75% instead of 65% of the retiree's allowance to be paid to the surviving spouse in exchange for an actuarial reduced retirement allowance. UPEA feels that this is just the beginning of creating parity for public safety retirees. This bill will now be sent to the Governor for his signature.

1st Substitute Senate Bill 126

As noted a few days ago, UPEA was able to work with Sen. Liljenquist to come up with a compromise solution and a substitute bill. Yesterday, it passed the full house and will be sent to the Governor for his signature.

Divestment of Retirement Retired for a Year

House Bill 211, sponsored by Representative Julie Fisher, R-Davis, sought to divest retirement fund investments that do business in Iran. Fisher ran a similar bill last year, HB 39, but it was tabled by a senate committee.

House Bill 211 came up today on the House Retirement and Independent Entities Committee's agenda. While the social cause is admirable, UPEA was prepared to oppose the bill on the grounds that it would increase portfolio volatility, increase administrative costs, conflict with URS's fiduciary responsibility and have potentially unintended consequences.

Fisher substituted the bill with language that creates a year-long study of the issue. The committee passed 1st Substitute HB 211 , even though it had a $10,000 fiscal note. Fisher will work with URS to decrease the fiscal note and make the bill debateable on the House floor. UPEA will track the issue next year to ensure that it does not put employees' retirement funds at any additional risk.

Advisory Council and Board of Directors

The Utah Public Employees’ Association State Board of Directors and Advisory Council met on Saturday, February 7, 2009, to discuss the state’s ongoing budget crisis.  Board members discussed how important it is for public employees to be proactive in helping the state resolve the crisis while preserving and limiting the impact on jobs.  Pending the outcome of final state revenue numbers State Board and Advisory Council members believe their input and suggestions could assist in reducing the number of RIF’s in state government.  The State Board and Advisory Council discussed certain options such as furloughs and benefit considerations.  As stated – saving jobs is the ultimate goal!

SB 126 Update

Senate Bill 126 first substitute sponsored by Senator Dan Liljenquist, was heard in the Senate Government Operations Committee today. UPEA opposed the original draft of the bill and met with Senator Liljenquist to discuss our concerns. The meeting resulted in changes to the proposed language with UPEA supporting the substituted bill.

The substituted bill contains the following:

-Allows an individual who has been RIF’d to be given preferential consideration when applying for a new position with the state.
-Preferential consideration is the equivalent of Veteran’s points.
-Preferential consideration is maintained as long as an individual has not accepted a career service position with the state.

Historically, preferential consideration stayed in affect for only one year.

SB 126

UPEA is tracking SB 126.  UPEA had met with the Senate Government Operations Committee.  The sponsor of the bill delayed the bill and will speak to it on Monday.  The Salt Lake Tribune wrote an article on SB 126, click here to read.

Health Systems Reform

On Tuesday UPEA met with Cathy Dupont, the General Council for the Health Systems Reform Task Force, who is currently drafting the bills relating to heath care reform.  Dupont noted that the Health Systems Reform Insurance Market bill (not yet numbered) currently creates health care reform specifically for the small employer.  The bill would give the ability for the large employer to participate in 2012.  Dupont explained, the bill would allow small employers to offer group plans through a HSA or 125 cafeteria plan.  Then employees would use an internet portal similar to Einsurance or Travelocity to shop for health insurance.  This would continue to be a group plan with group rating, not individual plans.  UPEA will continue to track this bill because it could potentially affect the public employee health plan; as this bill lays the groundwork for statewide health care reform.