Public Retirement & Social Security Programs-Joint

Members if you go and find you H. usage will go ahead get started. Sure she's a quorum. Culture you have any comment you wanna make today. Members of the the senator and I have been working with staff and it looks like after today we will be down to eighteen bills so that would put us with six bills each meeting for the next three meetings that we get this done in March so things are looking good for that. So we will be in touch with you when we can schedule bills that a remaining. If you have any questions just see one of the two of us. All right members here we go we're gonna start off with house bill thirteen forty nine represent warn you want to go to the table and if you have guessed you want to help president would you go ahead and have them come to the table and introduced himself for the record. Members one house bill thirteen. Forty nine. And members of the amendment in your packet and I'll need to get a motion to adopt the amendment. Which have a chance to look at. Have motions are second. I got a second from representing Maddox any other questions regarding the amendment. Represent warning thing also about the amendment I'll just say that the the amendment is to enhance details of this bill after working with the a very highly regarded Rhys attorney who of S. to join me at the table this morning so in his just fine tuned details of the retirement plan that have made the bill even stronger all right read the sorry man Monday morning I jumped over a little bit Senator Elliot has questions Senator really yes message here I would just ask since this amendment. What is real sensitive or not it has a whole bunch of words that we're just getting so when we get to the parts of the bill Senate president if that something from here is kind of a change you think we need to know about what you do you mind pointing that out like when you get to when you're when you are present in the bill something from here that you think we really need to take hold of is not this it's this that would be helpful just because I don't have the capacity to merge these in my head and see the full picture right now seven XS yes ma'am okay all right thank you senator just in response to that what I want to tell you is that up I have a very good friend who has done estate planning and I called him and I said who do I need to get with to make sure that we are getting all the details correct with respect to a retirement plan like this and the gentleman that's going to introduce himself is the man that came that he recommended okay all right thank you well one there's more I'm sorry yes. There are a lot of details to arrest a plan that I can't even begin to explain that's why this man is here so I'll let him talk briefly about that when he speaks so. Mister chair if I could have him introduce himself all right go ahead and do stuff they were going to take about a vote on the adoption of the amendment would go interview so. Request for pressure but. Thank you area of. Just push it down one hundred you're you're hot I'm Craig Westbrook from Little Rock I've been practicing employee benefits area for about to almost forty years okay. All right thank you all right members we have a a motion and second to adopt the amendment any other discussion to the motion second. All favor say aye. Any opposed. Okay with that represent war with the motion adopted you're recognized to proceed for the presentation of the bill. Thank you Mr chairman first of all want to bring your attention to a hand out that you have this was done by a lady by the name of Angela Antin Ellie Senate to everybody last night on the committee excellent article on retirement both nationally and in Arkansas if you haven't had a chance to read it I would really encourage you to do so it's a real strong support for the bill that I'm about percent. I'm very excited to be presenting this bill today it is an issue would fail to address for far too low we have a significant problem in our state and nation as legislators it's important that we not only identify problems in our society but come up with some with viable solutions for these problems. Our Kansans and Americans are not saving to provide for stable and an enjoyable existence during their retirement years. Currently in Arkansas alone we have some five hundred and thirty thousand citizens who have no access to retirement plan through their employers the result is that they are not saving for retirement when a person reaches retirement and has not saved they realize they cannot survive on social security alone. They have two options number one they have to go back to work during their golden retirement years or number two they have a they have a handout asking for government assistance or worse depend on family members for help. Neither one of those are acceptable options but it is what many of our fellow Arkansans face today when they retire they may not realize it at first but they do within a very short period of time. An alarming statistic I came across indicated that the average working person without an employer sponsored retirement plan only had twenty five hundred dollars put back to retirement the average retired household coming from the same situation only has twelve thousand dollars but back that won't last and then we will be left with another or tension who needs our help. Rather than let the problem grow we can offer a current solution the every Arkansan retirement plan opportunity act this bill would create a retirement plan for employers without a current retirement plan offer to their employees. It is a voluntary plan features payroll deduction a big key to saving. It would be run by the treasurer's office much like the five twenty nine college savings plan is now that plan has proven hugely successful this plan will as well. Instead of future our Kansans facing the same problems many already have when they reach retirement we can provide them with a way to make sure they have a better retirement with their own money and not needing help from the government. We need to create a society where people save and plan for retirement while they are working a society that supports itself. Before I close I want to add that this bill has been vetted by the Arkansas bankers association the National association of insurance and financial advisors I've had conversations with Stephens Inc and the governor's office is very supportive additionally a business with so many small businesses and individuals who are ready for this I'm not aware of any known opposition I would be glad to. At handle any questions. As will Mr Westbrook. Part of this was working for you want safe we get into the question period. No Sir okay represent have. representative last question for you you know you're not talked about this for a long time and I know it's a great idea and I hope it works but let me ask you this of this the employer of these folks do they have any involvement or would this be strictly something that will be of like us in our system of saving that will be pulled out of a person's check before they actually touch the money can you explain that for Sir thank you representive right yes the employer's key role is to sign up his company for the plan. If they sign it up then it is automatically available to every employee that they have. The plan calls for a an automatic payroll deduction of five percent of that employee's money into the plant. Each employee has the opportunity to opt out of the plan if they don't want that one of the big things we see and retirement plans and I've actually talked to a couple people they go last. If it's in my hand I'm going to spend. If once I get my paycheck I'm I'm using it if it doesn't get in my hands I can say that. And that is a huge key with this payroll deduction. It's it's the the data supports that it a person is fifteen times more likely to save yes. They do payroll deduction. So Yes every every employee has the option. All right representative. Did you have another question John hang on let me get to represent their they'll come back to represent their. Thank you Mr chairman a representative warned look at this I got a couple questions on would be for you Mr Westbrook. So on the. On the amendment if you have had a plan within the last two years are not eligible to participate. That's correct okay. Follow up follow up missed him in the chair just survey knows on the chair don't worry about asking for false loans to questions or not repetitive and it's going to mean for direction I'll let you go if you get a long list of my issued by the queue just for clarification go ahead how would what complications or what kind of paperwork would be necessary once the plant reaches six hundred thousand for employer. Because this would be a state and minister plan in full disclosure I actually do these type of plans so right I'm working with an employer and they come to me and say Hey I've got eight hundred thousand dollars what kind of administrative. Paperwork would it be to pull that group and enroll them in their own claim. Okay that brings up a very good point that I want everybody to understand when I was working with the bankers association one thing that I made clear was that we wanted to be a partner not be working in opposition that's another deal with the national association of insurance and financial advisors that we've been having conversations with we wanted to be a partner in what the bankers association loved about this was that we were basically And incubator program for retirement plans so that when a an employer who signed up if there aggregate assets grow to six hundred the excuse me six hundred thousand or more they have to get their own plan. So basically we would be growing up plan for the private sector to build on at some point as far as the administrative issues that would be handled by the third party administrator that we will be the board will be hiring. So it will not be a cost to The plan that is sleeping okay in a. I know the secure act is going to have some plans available would is be able to work in conjunction with that or. Would it be better to pay you back on that may be a Westbrook question that I will let the attorney handled. I I agree I think this probably will be of a pool employer plan in this will be a pool employer plans under the secure act and because of the benefits to that. Senator question. would so what they would work be able to pick and choose between which plan they want to opt in. Well they would have some if some if someone doesn't want to be in this plan of sure that makes playing a little bit if you don't mind so the secure act. Which was adopted in late the the December two thousand nineteen by Congress. Of puts in a what's called a pooled employer plan you know wrestle look lawyers Love acronyms so we called pips. The New Yorker thanks call maps and tips multiemployer plan Blake of so the pool employer plan is a kind of multiple employer plan that allows unrelated employers to pool into a single plant previously employers had to have some sort of rule of relation to each other like all employers in certain industry so the pool employer plan now allows of the unrelated employers to be a single plan get the benefit us of. Of the economies of scale have a fiduciary oversight the the the takes the employer at out of that which is a huge benefit. Representative Perry I see this being a pool employer plan. Okay the first mall but for smaller employers show where as you know I think this man this this plan may fulfilling the age that other employers plans don't but we don't know that yet because full employer plans you just started one right twenty one is a new. Roth contributions will be allowed. One would think telcos shaking his head back there. Okay thank you Mr chairman. All right representative Ryan in Rome Senator Elliott and Senator Rapert. Thank you Mr chairman representative last one thing I really like about this this building we have brought this up yet did you know like if a person is making thirty thousand dollars a year Joel Senator does not on like this there's a lot of folks statewide I think fifty something representative makes minimum wage. Okay but at the same time. If a person wanted to save lives just say every two weeks one to save two hundred dollars well if you brought that money home you actually maybe only burnt be bringing home a hundred thirty thirty five dollars where if you save two hundred dollars you save two hundred dollars and and when you come home you may only be looking at maybe a hundred fifty or sixty dollars less that you're bringing home in a rusher that's exactly correct thanks thank you. Senator Elliot. Thank you Mr chair I'm reading about the six hundred thousand dollars The combined total six hundred thousand dollars in assets of does this mean it is is this saying that if I own a business and right now is it's my total assets or five hundred thousand dollars then when it reaches six hundred thousand dollars something's going to happen is that explain what this actually means to me because I I haven't had the pleasure of talking with anybody about this that's fine but let me clarify for the committee okay what we are working on right now. Is a plan to get people and employers who have nothing to begin a plan. So. Well that would be coming into this would be at a zero level now then there is a provision that allows individuals to roll over up to seventy five thousand into the plan. What we are looking to get that segment of the population that has not been offering retirement plans. And the members who have not saved anything for retirement that's what we say if you had a plan for the last two years. You're not eligible. We want to get those if not been saving to get into this plan. What we wanted to do with the six hundred thousand is if a company grows and is successful engrossed to that six hundred thousand this plan is not for the bigger plans this is for those who are not saving that have not made any provisions and for employers that basically bill like. They don't have many options out there and I again want to say that what we're trying to do here is complement. What is in the market we're not trying to replace anyone I still hope that mark Senator Rapert and everybody else continue to sell their products and if they get to these five hundred and thirty thousand Arkansans who have nothing correct. More power to the I want them to. My goal is to reach as many of these five hundred thirty thousand our Kansans can so that they have money that they need when they retire and not a hand out saying I can't make it on would have got I need help so does that yes that's very helpful I do you know how many of those five hundred and thirty thousand folks are at the poverty line or below the poverty line have any idea I do not know that are out for you the okay and I know there what we're doing here is relatively new but and other how many other states have done that who has some is located in the article of from Angela Antin Ellie there's that on that there are a number of states that have undertaken this and the number is growing there are a lot of states that are looking at legislation right now during this session well I just I I got the article with great intentions hoping I would read it but I had. That sure it's it's like thirteen states to Bahrain enacted something with the growing so I just had a behavioral problem of questions regarding states have already done it because I just know I think this is it is a good idea thank you I really do what I'm trying to figure if you add that how may how has it gone for people who. Our state making minimum wage and they're already making choices about do I pay the light bill of my my kids new shoes and that kind of thing do we know anything about what behavior has been like for folks who are struggling what what and I have been reading on this for three years now and very diligently for the last six to seven months in the data that I've seen is that. When you offer something even if they start at the minimum of five percent and they get a net check. They're not really thinking about what's with hill they're thinking about okay I can live on this so the hope is that. They let that five percent be withheld. For the future time. the payroll deduction is is huge but What we're seeing is with the payroll deduction it's a real big key to get him into the plan and to continue that savings so okay is everybody going to participate no but our hope is that we get as many as we can. this might be a this may be a question for Mr Westbrook Did any of the state start with a graduated approach I'm thinking in terms of getting people who really just barely making or not making it thank for example. If if we have of a minimum wage let's say estate perhaps with the minimum wage and it gradually gets to say fifteen dollars. Is anybody matching that with that maybe we start the. The star a plan like this a at two percent then move it to three percent then move it to five percent anyone doing anything like that. What go ahead. The. What I will tell you is that what I have read about the plans is that everybody has been coming up with their own plan ours is not exactly like anybody else's but it's their hybrids of what is out there and every time a new state introduces something its new ideas especially with the passage of the secure act that has allowed new avenues so. We're we're going from each other as we move forward in this new direction but we don't know if anybody's taking that kind of gradual approach okay thank you thanks Mr. Senator Rapert thank you very much and thank you representative Warren and you know United are big buddies. But I have questions on this right I thought you might yeah I wish I had a little bit more contact on this previous to to the running that's not your responsibility it would love to have had more input I think in the past so I want to make sure get an idea of how this is different than what was tried in the past that wasn't successful because the bottom line is is that everything that you talk about is available in the private market today right. And I'm having a hard time understanding why the state of Arkansas. Niece's suddenly become a player. Or a you know an option out here. In the face of all the people in the private market that offer these all over the country and in the state of Arkansas and so that's my first question I guess is is why should we do this when there are people that are professionals all over the state that currently offer this and I will go ahead and say every time I've looked at this it's not in a situation where there is a lack of opportunity. It's a lack of money. The questions Senator Elliot ask about about of these people how many years the poverty level. It honestly is a lack of money so it's not that there's an element that there's a lack of opportunity for people to have these their advertisements on the radio television internet social social media there are calls that go out to people inviting them to participate and so I get back to the old based principle of should private entities or government be the ones to offer that so could you help me with that again you know you and I are buddies some talking points here is nothing do we're working a lot of the stuff together but on this issue I would like to know one okay the I appreciate the question because you you give me a couple of opportunities the number one. The statistics have not changed. Basically we're looking at the same statistics that we had the last General Assembly. So what I'm seeing is we're still not reaching the population. What I think is noteworthy here number one the treasurer's office has handled the five twenty nine college savings plan it has been hugely successful they hope to have over a billion dollars in that plan now and I can't when say five years is that correct. thanks the duration of that plant. Hugely successful the other thing that I think is a real plus for this plan is that we're going after employers. The employer is to. We're going to be marketing too so that they get the opportunity to offer to their employees something that they've not been doing when I worked I had the pleasure of working in trust for ten years. And during that time I deal with some big companies. I remember a company paying thirty thousand dollars for the plan that they had developed for their company not to mention the administrative cost the testing the investments. It is a very expensive a product now what you're talking about is is not as costly as some companies thanks. But. What we're doing is giving employers a chance in a market today where employers have difficulty providing insurance and retirement plans to their employees please. So we're addressing one of those avenues of saying here's a way that you can offer a retirement plan to employees I have one a constituent in the House who is so excited about this he has a construction company and he does this is exactly what I've been looking for he goes I have been wanting to do something for my employees. This is perfect. So in in please understand I don't want to take business from you or representative Perry I want us to complement each other you continue to keep going after every customer you can representative period does the same and if we reach people through the every our cans and retirement plan then our canned our Kansans are better off so that's my approach on this we also put the up part in there that basically is an incubator plan for the private sector when they get to a certain level they have to get out the plan so I think it is different than what we started out with. But like I said we want to complement what you doing not compete as chairman I do want to make the verbal disclosure in here because the person everyone keeps mentioning that what I do I have been in the financial services business monitor professional career I sold my book of business actually in sixteen and I'm still license an affiliated with investment firms but I'm not taking on any new clients at this time but I do want to make the disclosure since we're talking about this so that I fulfill Senate rule representative Warren okay so I did I don't know about that but I knew you were still there in yeah and at that Hey it let me interrupt for saying just say duly noted for the record go ahead. I'm sorry I couldn't even hear you. I just said just for the record the chair duly notes okay your your college thank you thank you sure I've got no is on both sides I couldn't even hear you but I'm trying. But but represent Warren I want to continue on that I appreciate what you're saying but is very important to note. That everything that that you're talking about is available in the private sector. From banks from insurance companies from private financial services companies so let's get to the real fight let's get to the real bottom line here who is it that is pressing for this legislation. I'm pressing for it. Well good I believe that the treasurer's offices had you tried this legislation again so it are there any other private entities backing the bill there multiple people involved with this bill okay and with with respect to your your question on. The the banking side. I had multiple conversations with the bankers no I was asking if it has any of them come out to say that they are supportive of the creation of of this entity that's what I'm asking I visited with the a whole committee of the Arkansas bankers association and in that visit they said. You are going toward a segment that we're not reaching okay we'll by saying with banks also don't reach segments that the insurance companies and financial services companies because they're really not in the business of going in setting up those small employer plans like those insurance companies in the financial services I'm just trying to get a feel for people that that might be backing it so here's the thing the the what is the cost of the plan to the employer I believe I see point seven five percent correct that's correct all right so seventy five basis points. And report is not compensated. I'm sorry so that is not compensated right that's so who is it that is going to actually manage the assets because the treasures not gonna be managing the funds that promise and so could you tell me what entity. Or slash entities are going to be the ones that are you studying of the assets. The ward is going to. We've got this set up through the legislation the board will be doing a hiring a third party administrator and there will also be request for a proposal out for all the investment options that will be offered so that will all be determined by the board that has yet to be appointed. Okay and so what will happen is that someone it sounds like it's going to be the custodian that will be chosen I'm looking over here to Germany you're left to is nodding his head I don't know if you want to say anything thank you does but we know because because I knew just wanna be clear and again I've told you I'm not not opposition to you here at all really about policy here I'm because what's what's happening here is you're creating a a state government board. That is going to. Deem someone to be the custodian and they're going to be the great rich recipients of all these assets that are going to pour into this plan. They're gonna be caught competitors with the private sector and so that's what I'm asking if the if that's somebody that's been working you know with the treasurer's office already is this going to be fidelity is is gonna be small business going to be state you know who is that going to be. We have no idea at this point that will be a board decision that will yeah. Well I think Mr Westbrook has some points that he wants to share with you the okay I'll try to just add some comments in response to your question I agree this the plant is. The legislation is designed to fill a niche the private sector's not feeling. Of it was a normal take exception that is to say. They just they are offering it. But just because somebody doesn't take the option doesn't mean they're not filling it just okay and so that really is that their statistics show that actually it's a matter of people having the money. So there's another there's another issue of and that is the fiduciary responsibility that goes along with maintaining a plan I have class all the time it's a had a wide have a retirement plan and not will how do I not have any fiduciary liability NASA that's pretty easy don't have a plan. And and so one of the problems is a small and in small businesses particularly in small businesses that they take on this fiduciary responsibility of oversight of the assets and administration of the plan. and they're not really equipped to do that it's and it's very expensive to hire somebody to do that and so that's to me that's the number one thing that up a pool deployer plan offers is a fiduciary oversight as a part of the plan structure so that the employer doesn't have to really worry about that the other thing is that the it's the recordkeeping expenses are very expensive in single employer small plants I mean you know I seventy five basis points is is is a goal in this is certainly not something that's going to be cheap the end of day one but the the more the more you have in the plan the more likely it is that you meet that goal and that the code is. It is very difficult to maintain a small single employer plans. UNFICYP was chairman only and appreciate all that you're saying the thing is the pool employer plans are available without the State of Arkansas being the one to set it up that that's been that and that's really review wars been. The other thing is respectfully five twenty nine plans were created by the federal government. In set up with state sponsors for those in so that the Arkansas treasurer did not do anything magnificent there. It was our that was set up that was mandated thing that that happened and so the other thing is when I look at the states that they've done this you know these these are there's something about the state's. California Colorado Connecticut Illinois Maryland New Jersey Oregon Seattle in Virginia. These these these are states where they think government is always the answer thank. And so that's where I have my concerns that's what I wish we could talk a lot more about this because I absolutely think that more people should have opportunity but the sample simple fact of the matter is it remained it's about people having money. As opposed to have an opportunity because the opportunity is absolutely out there you can go set up today a no fee irate any number of different places. Literally. And so I just am concerned about the state of Arkansas getting in beginning to be a competitor with many of those folks in the communities that that already do this is a matter of fact should be just like the state of Arkansas going to be in the title business. They are now going to be the ones to transact titles. And provide that opportunity for people because title insurance is too costly that's really what that's the difference there shall thank you Mr. All right any other questions from members. Are you close for your bill Mr Warner represent one I recognize that in a minute Senator Teague. I would just like to say Preciado the Senator Rapert comments I still think that we have a segment of the population we are not preaching. This is just another opportunity to reach people that were not reaching. The treasurer's office is not a beneficiary in this the treasurer's office is the holding facility for what will be done by the board. So in this bill the only money that the treasurer's office will get is a small amount to market the plan. The monies will be used to help with the. Plans for the individuals who don't have one. as far as. It goes. I know for sure that I've had people say this is the right plan for us we've been looking for this mechanism we need to give employers away to be able to. Do this for their employees in a time where costs are high for employee benefits so I would just ask you for a good vote. I'm closed all right we had no one to speak signed up to speak for against for the record there's nobody signed up to speak for against right okay with that being said Senator Teague I'll take your motion at this time but would you please make it if as amended. Got a second by Senator Chesterfield discussion to the motion. All right go ahead in the lead up there Senator Rapert you're ahead as I say I keep saying because I love you and I work with you on any number of things few more so this is not about you at all it's just about the matter fact this is an expansion of government in our state in opposition to the private sector. And I know the a a RP came in in support of this in the past I don't know if they're out here lobbying for you behind the scenes on this right now but they absolutely there want to try this before not pass a number of things that A. R. P. we've locked arms and been for hints but I don't think that we need to be like California Seattle New Jersey and all these other states that are basically big government states and I just think absolutely the best thing we could do is educate more people and do that that's great but when you create a plan that undercuts the private sector who doesn't have the ability to market like the state of Arkansas. With government money but the government behind it I just think that is not good and that's just where I'm at on it thank you Mr welcome. Senator speaking to the motion correction early. Senator Elliot. Yes. All right I like nothing better than hearing both sides sometimes with more than both sides to a discussion but it occurs to me of that so much so many of the reasons people don't have this opportunity right now has to do with the policies that we have in place I think sometimes we will blindly through this world I could is if there is not a system that has been put in place that's created these folks in the first place we shouldn't miss by. I think the opportunity here is to pass this bill then look at other systems that and other policies we have in place that because these people to exist in the very first place. So I would like to see us and think about going forward what can we do and the outgoing board so that these people take advantage of what we're offering now. But the mission should be examining our policies and figured out a way that they will be let that out of this right into Senator report reports working anybody else is because I appreciate what he's saying. So that's the. That is one of the reasons I will vote for this bill I think it's a step in the right direction. The government has a role here to help trying to to help us try. To give people the opportunity or you are not making just minimum wage that you are not having just to accept sub standard housing that you are not in a position where you're deciding whether or not you're going to pay your grocery bill about your kids a pair of sneakers. These are the people we're talking about this is a step thank you. Senator Chesterfield of immediate consideration of immediate consideration. Non debatable so we're going to call for the vote motion the second as amended to. We will only consider yeah I have a motion for committee consideration. All right second. Got a second all right all favor say aye opposed all right now we're in a vote on the bill as amended all favor say aye opposed no have one noted opposition congradulations represent warm your bill passes. All right members without the. Without objection representative Tosh in the room he has a meeting to go to not think. His quick any objection leading represent talks go on board. All right no noted opposition the. Representante you're recognized president House bills will five you have any questions can be should be. With you. Thank you Mr it Committee Mr ever you're permission not like trying to the table with me to the Director of the lofty retirement system director Clark okay Clark if you would Director Clark here to show for the record please. That good morning David Clarke the secretary director the place of our retirement system. All right you're recognized recognize the representation resent house bill twelve five thank you miss your committee members of just to give you a little history on this bill at the end of the twenty nineteen station of representative Warren was running this bill and work with him as a couple of concerns I had in regards to how it would affect law enforcement and the he graciously worked with me on that too To do an amendment so that those concerns could be addressed and it was right at the end of the session will add a couple of days later often in the Haitian of it well we got the amendment we did address the concerns but over the last two years have been brought to my attention that we had some unintended consequences not major but some things that I feel that we need to correct. Those corrections or the is that the the way the law was left in twenty nineteen the law enforcement officer or firefighter if they retired from their agency they could go to work for a from an agency they could go to work for any other agency but they could return to work for their agency that they retired from. That caused two problems one is yet there was a law enforcement officer that retired from that agency that was just a doing a good job and and the. The mayor wanted to select him as the chief of police Hey he couldn't do so so that was not acceptable when when we need to make sure that way provided that opportunity for the mayor to select whoever he wanted to she also the second thing is is that if one of the officers retired from that from that department of they would have to come back and we corrected that where they can come back at the entry level position which would allow them for that agency to use them as a resource officer worn off or whatever it's really a great bill committee for law enforcement and per or for firefighters across the state and not only that we have the support of the chief of police we have the support of the Director of Lafayette his board of trustees of the departments will still make their contributions for that employer it to lawfully which may and make sure that we maintain the financial security of that retirement system and so it's just a win win is the only way I know to put it because there's no known all positions law enforcement across this state firefighters across this state I welcome this piece of legislation I can assure you because the and probably Senator Rapert charges saying thing this is a great bill as we do this General Assembly really rises up to help law enforcement and firefighters it was our back to blue and I think this a great paid piece of legislation to do just that so with that Representative I mean direct Clark is anything I need to. You need to cover those right thank you covered everything very thoroughly okay thank you know with that lot Mister chairman I'll take any questions any questions members. Represent rejection thank you Mister chair I just wanted to. Removal from one hundred eighty days to ninety days. Before they're available to come back correct. According to federal law there has to be a separation period the separation as you know is normally a hundred and eighty days of a compromise in a working out a great compromise between lofty the retirement system chief of police of they worked it out to ninety days and the just felt like that was will reasonable with more fair space that they were trying to return these officers and firefighters to work with the mortgage separation period to short line thirty days well we felt like that hundred eighty was a little too long but if we could do ninety it would get him get him back to work and help in some of these critical positions. All right any other questions from members. Our name I signed up to speak for against. Representantes read like culture bill. Mr I'm closing thank you Committee appreciated our motion do pass by Senator Chesterfield or second. And a second by representative eleven down there any discussion to the motion second. All favor say aye. Any opposed. Congratulations you passed a bill. All right we're back on the regular agenda which we're gonna go to House Bill thirteen forty six representative warned. Your. You're on deck for forty six forty seven forty eight. Senator sample if he doesn't strikeout to be after him after served up to that okay. Represent Warren you're recognized to present house bill thirteen forty six and the Duncan would year do so for the record please yes a Duncan Baird executive director of the Arkansas public employees retirement system represent one you're recognized president house bill thirteen forty six thank you Mr chairman these are all three papers bills house bill thirteen forty six would change the calculation of final average compensation which is used in determining the a pers retirement benefits. The bill would change the final average compensation to five years from three years this change would apply to new hires only this change is similar to what has been enacted by the Arkansas teacher retirement system and pass for Asher's this session. Be glad to take any questions any questions members. Thank you have anything what it. I'm nothing to add but certainly happy to answer any questions all right eighty eight questions from members. Anybody speak for her against the bill. I would speak for against the bill represent or anyone close rebuild. But wait graduation here hang on a sec. All right those good closing represent warn you good thank you all right got a motion from center Chesterfield I think those a second from represent or center consortium who the motion. All favor say aye opposed congratulations you pass house bill thirteen four six represent Warren you're recognized president house bill thirteen forty seven. Thank you Mr chairman house bill thirteen forty seven would change the code for future members apers the bill would change it to the lower three percent or CPI versus the current fixed three percent this change would apply to new hires only this change is similar to the change in acted for by Asher's last session. Let me just say this needs to happen for several years now the three percent apers has been paying more the then the actual increase in cost of living each year that's not healthy for defined benefit plan but nobody want to give up the benefit so we're proposing it to begin with new hires. Be glad to take any questions a questions from members. Senator Elliot. I would just I don't know this. I am always thinking about things in terms of you know we're trying to make sure We generationally are not put in are doing things to other folks so we won't have done to us and so. What what what who have we heard from folks about this and I did the bill and that and the board is good and we've done all those things and this is from the board itself yes ma'am and the board itself is making sure they're hearing from folks out there who are teachers and planned to be teachers probably more than anything else I guess planning to be teachers. This is for papers this I'm sorry I'm sorry I should have been sent a providers that use like we did it the teachers that are not on the wrong one sorry about that that's okay so All of this is been talk to our members know in neighbors and all this has been talked about done I guess you could say Dunken yes it has and you know if you remember we had the eleven town halls we gathered feedback there there's a lot of discussions the Cola at the town hall is you know we came back to the board we had to regular board meetings and three special board meetings where we talked about potential options we stream those live on the internet so we had more members in attendance and we've ever had in any of our I in person meetings we also had some of our stakeholder groups oppose submit letters as well as come testifying from the boards we heard from the SCA association of counties in the Municipal League I know so we took all of that And crafted each each of the proposals including the code proposal and then after that was put together in January I held a virtual town hall with about two hundred fifty ASCA employees or ASCA members and you know had a really good response there so every step along the way we've tried to both gather feedback as we crafted the proposal in the get additional feedback as we really form the proposal and finalized by Mr I mean that's that's that's sufficient for me I thank you for that response and I and I I do want to apologize to you I know you're not Mr. I'm really sorry about that but thank you that I appreciate your diligence. Thank you senator Senate served on Duncan would you introduce of record on this bill it had to do that please yes I Duncan Baird executive director of the Arkansas public employees retirement system all right thank you members any other questions from the committee. A by speak for against the bill. Representative or you want to close for you bill I am closed I ask for do pass or a. Got a Yes I have a motion I'm a do pass representative warned second center just fielding questions should the motion. All favor say aye hi a post. Congratulations your bill passes and no Europe for house bill thirteen forty eight. Thank you Mr chairman house bill thirteen forty eight would gradually increase the papers member contribution rate it would increase the rate from five percent to seven percent in twenty point two five percent increments over an eight year period this change would apply to all active contributory members and future hires this change is similar to the chain changes enacted by both teachers and Asher's this will strengthen the aper system significantly so and I just want to say I really appreciate all of our systems because they've looked at the contributions they've looked at every way that they can increase the stability of their plans and being defined benefit plan so it's not as easy as it is with their defined contribution plan so plus what they're doing and that this is another good move. All right members have any questions. And I speak for against the bill. Represent or anyone close rebuild I'm closed Astrid to pass got a good passer Chesterfield get a second any discussion to the motion second. All favor say aye opposed. congratulations you passed the house bill thirteen forty eight with that we're gonna go to Senate bill five Senator sample and then we'll finish up the morning. With House Bill one zero zero eight maybe. Senator sample you have anybody wanna come present with you in Mister chairman I think that we have discussed this bill probably a lot longer than it really deserves. All right you want we have members with this bill now is strictly about final average play we took out all of these. Problems with it we had last week and I appreciate a good vote that Mister brown like motion do pass as amended. We had a motion do pass as amended got a second from I think Senator Ingram down there. Now one second. We need to adopt the amendment. Mission of Senator sample bills are actually are engrossed okay just motion you want to do pass is Senator Ingram you good with that and it is all right so we got a motion to pass the bills very been engrossed any discussion to the motion. All favor say aye. A post I thank you members wishing punishment your bill. You can be Wardlaw all right last bill for the day's gonna be house bill one zero zero eight and representative Warren is going to be presenting the bill on behalf of the represent Wardlaw. You have anybody all right if you would David the name title for the record please. Yes Sir Mr chairman David Clark the director of the police and fire retirement system. Go ahead represent one. Thank you Mr chairman what this is doing is with the lock the system there are some underfunded plans that have been brought into the system so there is an income stream from premium taxes that the state receives. The state will continue to get four million that they are counting on for their budget anything above that will be used to help with the improvement of these underfunded plans we're looking at probably a little bit over a hundred thousand that we might get for that but these are plans that truly need some help and this is a revenue source that the governor's office is willing to allow to be used to. Fortify these these plans so I would be glad to entertain any questions a question for members David you have anything washer. No Sir other than the fact that the these plans that represented Warner's referred to the consolidated or the and often ministration to the police and fire retirement system and there are now making the actuarially required contribution so that's a huge step forward this bill would simply bring in additional money to help their under funded status improved. Okay any questions members. And I speak for against the bill. Nobody speak for against the bill represent warn you close for the bill I'm closed I would ask for do pass all right get a motion to passionate just feel do second any discussion to the motion second. All favor say aye opposed. Congratulations you pass the bill. All right members as the all the business we have on the agenda is represented more. Go ahead push but there all right center field I know we've been here well thank you missed year but I just want to thank the directors of these programs that. Work for so many of us and I thank this committee for growing across the state in getting the input of the people most affected by these programs so that we could come here today and present a program that will help to shore up the systems and make them safe going forward thank you Mr. Thank you Sir Chesterfield and and we all want to congratulate the systems I think we're moving in the right direction as far as the bills that the system's brought themselves and one thanks for your effort members there's no other business on the agenda we will meet next Monday morning at eight thirty as mentioned we've got eighteen bills and if you got a issues with any of them please see whoever sponsored it worked out of wood with that no business for the committee we are adjourned.