House Bill Would Halt Public Employee Pension Outsourcing

The Public Retirement System Board voted last summer to privatize annuity savings accounts offered to public employees and teachers.

statehouse

Photo: Noah Coffey (Flickr)

The Indiana Statehouse

House lawmakers approved legislation on Thursday that would halt the Indiana Public Retirement System Board’s plans to outsource management of public employee pensions.

The Public Retirement System, or INPRS, Board voted last summer to privatize annuity savings accounts offered to public employees and teachers.

Under INPRS management, the accounts earned a fixed interest rate of 7.5%, which the board felt was unsustainable.

The interest rate would be considerably lower under private management, which uses market rates.

Public unions said the difference could cost new retirees’ thousands of dollars.  Proposed legislation bars INPRS from hiring a private company to manage pensions until 2019.

It also allows the board to adjust its guaranteed interest rate each year to ensure solvency.

Whiteland Republican Representative Woody Burton, the bill’s author, says his biggest issue with INPRS’ decision is its immediate impact.

“Think in terms of somebody making 30 thousand dollars a year that has worked 25 years in the state government and they want to retire in the next five years,” Burton says.  ”Their choice – the way it currently is – they’d either have to retire this year or run the risk of losing 20% to 25% of their retirement.”

The bill unanimously passed the House.  It now heads to the Senate.

Brandon Smith, IPBS

Brandon Smith, IPBS has previously worked as a reporter and anchor for KBIA Radio in Columbia, MO, and at WSPY Radio in Plano, IL as a show host, reporter, producer and anchor. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.

View all posts by this author »

What is RSS? RSS makes it possible to subscribe to a website's updates instead of visiting it by delivering new posts to your RSS reader automatically. Choose to receive some or all of the updates from Indiana Public Media News:

Support For Indiana Public Media Comes From

Search News

Stay Connected

RSS e-mail itunes Facebook Twitter Flickr YouTube

Follow us on Twitter

What is RSS? RSS makes it possible to subscribe to a website's updates instead of visiting it by delivering new posts to your RSS reader automatically. Choose to receive some or all of the updates from Indiana Public Media News:

Recent Politics Stories

Recent Videos

Find Us on Facebook