Looks like the bill would require all employees hired on or after July 1, 2012 to participate in a defined contribution annuity plan rather then the current defined benefit retirement plan currently administered by MPERA.
The bill would hurt public agencies' ability to attract and retain good workers by replacing a desirable retirement plan with a less desirable plan.
I'm not sure what advantages, if any, this plan would have over the state's current defined contribution option. This plan would be managed by a different agency.
I don't know much about the annuity plan envisioned in this bill, but in general, annuities are expensive investment vehicles with relatively expensive fee structures.
My major concern is what potential impact this might have on the state's ability to fund current and future retirement obligations. I presume we will need to hear from MPERA on that issue.
I don't know if we want to actively oppose these types of retirement bills (see also SB 328), but if so, the above concerns are my main ones.
Steve Johnson writes:
ReplyDeleteUpon first glance:
Looks like the bill would require all employees hired on or after July 1, 2012 to participate in a defined contribution annuity plan rather then the current defined benefit retirement plan currently administered by MPERA.
The bill would hurt public agencies' ability to attract and retain good workers by replacing a desirable retirement plan with a less desirable plan.
I'm not sure what advantages, if any, this plan would have over the state's current defined contribution option. This plan would be managed by a different agency.
I don't know much about the annuity plan envisioned in this bill, but in general, annuities are expensive investment vehicles with relatively expensive fee structures.
My major concern is what potential impact this might have on the state's ability to fund current and future retirement obligations. I presume we will need to hear from MPERA on that issue.
I don't know if we want to actively oppose these types of retirement bills (see also SB 328), but if so, the above concerns are my main ones.
Anyway, hope that helps.
Steve