Retirement Press Conference

Sen. Liljenquist held a press conference Tuesday 2/9/2010 “designed to shed light on the retirement system” and his three retirement bills. He explained how the losses URS experienced in 2008 has “created a massive problem for URS.” He continued to note how “there is not an option to do nothing. Doing nothing just exacerbates the problem.”

UPEA has never supported not doing anything. UPEA supports the Governor’s budget which funds the 2.1 contribution rate increase. UPEA has met with numerous individuals who have repeatedly noted that if the contribution rate increase is funded, URS will not go bankrupt, but remain fiscally sound. UPEA continues to push for an independent taskforce to study the retirement issue over the next year before legislation to change the system for both current and new employees goes into effect.

Update on HB 140

UPEA staff met with DHRM about HB 140 yesterday (2/9/10). In the meeting, DHRM explained that the intent for changing the pay system was to try to encourage more merit pay increases by removing the steps from the pay plan. If only 1% is available, the legislature could grant a 1% merit step increase rather than being limited to 2.75%. UPEA is in the process of researching the plan, and will be meeting with DHRM again next week to discuss UPEA’s viewpoint on this plan.

The changes to the grievance process as explained were due to conflicts that have been found with the Attorney General’s Office and costs associated with the grievances handled at the Career Service Review Board.

UPEA has scheduled a meeting for Thursday (2/11/10) with the sponsor of the bill, Representative Brad Dee.

HB 140

Late Friday evening a new bill became publicly available that deals with State Employees. HB 140, Human Resource Management Amendments, was introduced to the House on 2/8/10. It has been sent to the Rules Committee for assignment.

HB 140 is something high on UPEA’s radar, because it deals with several public employee issues, including:

· Taking the merit steps out of the pay scale

· Changing the language related to the post-retirement sick leave benefit

· Changing the grievance process

· Changing the grievable actions that may be taken to the Career Service Review Office

On 2/8/10, UPEA met with legal counsel to ensure that staff understood what was being presented. UPEA staff also has a meeting scheduled with the Department of Human Resource Management on 2/9/10 to discuss the intent behind the proposed changes.

UPEA will continue to update members as to what is happening with HB 140 as more information becomes available.

Executive Offices & Criminal Justice

Executive Offices & Criminal Justice 2/3/10

The committee heard from County Sheriffs, the Board of Pardons, and Department of Corrections. The fiscal analyst went over the budget brief on each department.

Tom Patterson, the Executive Director of the Department of Corrections, presented on the budget of DOC. Some of the items that were discussed to address the 5% total budget reduction were to close the Parole Violator Center which would save $7.6 Million, eliminate meals for Correctional Officers which would save $400,000, and close two prison housing units which would save $3.8 Million.

Corrections discussed the risks involved with closing Special Services Dorm and OQuirrh 5 housing unit. If these two pods were to close the Utah Prison would be over maximum capacity by 215 beds. This would mean releasing 215 inmates early, and the prison would still be at maximum capacity. Tom discussed the risks involved to staff and also to the public with releasing inmates early and also operating a prison that is over crowded.

Retirement and Independent Entities Committee

The House Retirement and Independent Entities Committee met today and passed three bills through the committee with a favorable recommendation. The bills are H.B. 215 Amendments to the Public Employees’ Benefit and Insurance Program Act – Risk Pools, H.B.233 Retirement Office Amendments, and H.B.83 Sub 1 Public Employees Retirement – Spousal Election.

H.B. 215 Amends the Public Employee’s Benefit and Insurance Program Act risk pools for full-time enrollees at an institution of higher education from full time equivalent enrollment of less than 18,000. Currently it is less than 12,000 full time equivalent students.

H.B. 233 modifies the Utah State Retirement and Insurance Benefit Act by amending provisions related to appointment of board members, purchase of service credit, disability benefits, and termination of employment on retirement date. This is URS annual “clean up” bill, which intends on clarifying the statue in Title 49 – or the Utah State Retirement and Insurance Benefit Act. UPEA was originally concerned with the original bill and talked to Dan Anderson, URS’ attorney about amending the bill. The bill was amended in committee today.

H.B. 83 Sub 1 requires the Utah State Retirement Office to provide written notice (within 30 days of a change and at least 60 days prior to retirement) to a retiree’s spouse of the retirement allowance option made by the retiree under the Public Employees’ Contributory or Noncontributory Act.

Health and Human Services Appropriations Committee

House Democratic Caucus 2/2/10

UPEA staff attended the House Democratic Caucus on 2/2/10, where the House Democratic Caucus discussed various items, including HB 1- Education funding, the Ethics legislation, and various housekeeping items.

Much conversation surrounded the ethics bills that have been presented thus far, including increased financial disclosure, lowering gift limits, and limiting on uses of campaign funds.

Health and Human Services Appropriations Subcommittee 2/1/10

In the Health and Human Services Appropriations Subcommittee held on 2/1/10, the committee discussed several issue and budget briefs that had to do with the Departments of Health and Human Services. These issue and budget briefs are linked below.

Department of Health
Epidemiology and Laboratory Services
Health - Federal funds
Health - Intent Language follow up from prior year.
Health - Executive Director Operations
Health Systems Improvement
Workforce Financial Assistance
Community and Family Health Services
Local Health Departments
Health Nonlapsing Balances
Social Services Related Revenue Options
Substance Abuse and Mental Health
Division of Aging

The Utah Association of Counties also spoke to the impacts of potential cuts to the Health and Human Services line items described above. They are very concerned about the trickle down effect that this may have on local health departments and governments.

Overview of Utah's Retirement System

On Tuesday 2/2/2010 UPEA staff attended the Office of Legislative Research and General Counsel’s (OLRGC) “Bagels and Briefings – Overview of Utah’s Retirement System.”

Policy Analyst Ben Christensen went over the history and membership of the retirement system. Currently there are 155,667 employees in the Public Employee Noncontributory Retirement System (or the Big System), of which 52% include public and higher education employees, 20% include state employees, 27% include counties and local districts. Christensen also discussed the retirement allowance formula of years of service multiplied by 2% and the average of an employee’s 3 highest salaries. Lastly Christensen noted how the financial losses of 2008 affected the retirement system as a whole.

Next fiscal analyst Danny Schofield noted how the URS Retirement Board asked for a 2.1% contribution rate increase for the public employees contributory and noncontributory systems. According to the URS Retirement Board, if the contribution rate increase is funded, the retirement system will remain actuarially sound. In addition, URS annually expects at least a 7.75% investment return. In 2009, URS received a 13% return on investments. Schofield also spoke about the $23 million PEHP increase for FY 2011.

Lastly Darin Underwood from the Auditor General’s Office discussed the Reemployed Retiree Audit, presented to the Audit Subcommittee and Retirement and Independent Entities Committee November 2009.

UPEA is at the forefront of the retirement discussion and will continue to present arguments and information on how URS is still the best funded retirement system in the country.