Pension reform legislation won approval in House and Senate committees Thursday. The changes are designed to save the state billions over the 30 years.
The proposed plan sets a minimum retirement age of 56 for law enforcement employees, 62 for all other state employees. It would only apply to new employees hired after January 1st, 2013. It would also change the way benefits are calculated. Benefits would not change for current employees or retirees.
"It became clear as almost 40 other states have taken to change and modify their retirement systems, Alabama needed to follow suit as well," said Sen. Arthur Orr, R-Decatur, and Chairman of the Senate Ways & Means General Fund Committee.
Both Orr's committee and the House State Government Committee approved the plan, but not without some opposition.
"The bill gives us a five billion dollar cure to a 12 billion dollar problem is that right," said Rep. Jim McClendon, R-Springville. "My daughter and my grandchild that's sitting over there, we're giving this problem to them."
McClendon is talking about is the gap between the RSA's assets and its liabilities to retirees. Taxpayers make up the difference.
But the governor's office and supporters of the bill says those liabilities should go back down as the economy improves. They're banking on this reform package coupled with improved returns to keep the retirement system on solid financial ground.
"Certainly we hope better performance and we're already seeing better performance with the returns of the investments in the Retirement Systems," said Rep. Jamie Ison, R-Mobile, and Chair of the House State Government Committee.
The full house and senate will now consider the bills. The Legislature is on Spring Break next week, but these bills will likely hit the floor as soon as lawmakers return.
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