Public Retirement & Social Security Programs-Joint

All right members if he'll take your seats will go ahead and get started this morning thank you all for being here this morning with chair does see a quorum. Our members if you would listen up the Cochair Representative warning myself have been having a few conversations we want to float the idea out there to you it's not I think you're require motion just to want to get some feedback include the committee members in the thought process of recognize represented worn at this time. Thank you senator. What we've been looking at is where we are right now with respect to as we get through the different system bills. barber and I met last week and. We hope to also do three other apers bills today and if we've gotten all three or the three other a per apers bills done we would have twenty eight bills left to go which would mean that we could basically do seven Bills. Each meeting for the next four meetings and be done in March. So. What has been offered to me is that when budget does not meet we could have an extra meeting at eight thirty one day. In the next week so represented gene has been calling me going okay we're not going to meet on this state. So I'm going to be meeting with represented gene later this morning so when I find out when they're not meeting and this we're probably looking at next week. What I'm thinking is we meet next Monday and then we also meet one more time next week. And get caught up with the other apers bills and our regular number of bills. If we need to we'll try to get him in a regular Monday meeting but if we can't we have an extra meeting next week and then basically seven bills each Monday throughout March and then we're done. So. Committee are you good with that. art center sample. Senator sample you you said that we had twenty eight bills. And we need N. we're gonna run seven Bills for for Monday's escorting a bill so. Are we not going get through if we made. On Wednesday E. sometime in that quicker. We ended up we didn't get to present three. Today that we had hoped so. It would be ten next Monday I don't know if we can get through. So all of them because we've got a couple that are going to take more time so do you still have twenty eight Bilger get thirty one we got thirty one and that's what I was trying to get okay if we've gotten the three done today we would have just had the twenty eight but three carrying over gives us thirty one so okay I think it seven Bills that is caring ambitious with And that's the reason I said we could throw in an extra meeting maybe extra to meeting some might get a little sooner okay thank you Sir yes Sir. If you all will just think about it and we'll take communication take your thoughts and part of the idea behind it was that as we get closer to the end of the session if we can go ahead and take advantage of a couple pockets of time while everybody's already down here in the middle of the week and we got done at the end of March you would have to get in here at eight thirty on Monday morning as he gets toward the end and things will look tougher a little tighter so just to communicate with the senators may in House members to represent warn if you would and will make the decision based on the feedback you give us a by have any other questions or thought. Our. Senator Chesterfield yes I guess I'm trying to find out if they'd known about these bills all this time. What a none of the bills before so we can get this done. If they're at thirty one bills we've been meeting we've been hitting on June Beals three Beals and these folks know the bills with there was the problem. Well as far as the three bills today I from my understanding we don't have the fiscal impact we don't have the report back from Jody that's why we have to set those aside because it's not prepared yet and your goals been that each week we have a particular system in to discuss the bill so that the members of that system would know exactly today was gonna be done so we can have good communication with everybody in the system however today we're not gonna be able to stick with that pattern because we don't have those back and so we're going to run delay on to we get that would hopefully be next Monday and will be able to hear the paper bills next Monday. Well since we met all summer long. Everybody who is interested in the system across the state heard what we were talking about. Should we continue to stick with what we're doing or should we modify and and deal with the bills that have. Less controversy. When will well we're gonna take what we can do for a check with the okay okay thank you. All right here we go we're going to H. B. thirteen twenty six represent one would you go table and got anybody to. bring to the table go ahead and get him up there will get amenities please for the record. Percent worn wanted to suffer record please represent Les Warren district twenty five I'd like to ask Mr Roden to join me. Clint Rhoden Arkansas teacher retirement system or a jungle hidden presented this is on house bill thirteen twenty six. If this sounds familiar to to you it should this was presented last week in our committee what had happened was this would be amendment that we adopted in the committee was also on members own up for adoption in the House due to all the snow it did not get processed as quickly as we thought it would so since it was on member's own it could not be heard in the committee so we're going to now since it's been engrossed we'll hear it today. I'll just basically give you the facts again This Is teacher retirements bill in is mostly a technical corrections bill that they have been compiling since our last General Assembly streamlines teacher retirement walls eliminates obsolete language and codifies existing practices and the board's intent this bill has no effect on the benefits are operations of teacher retirement. there's minimal cost to the system I'd be glad to entertain any questions. Members have any questions. But here speak against the bill. Senator Elliot. Yes Mr cheer I I would just like to know if there is any change and who's Representative who is I'm just looking at line three Page three line eleven and the changes they're just exactly what does that mean and why why we're doing it I don't have a position on it I just don't know what the market changes being made. Go ahead if you would click okay yes senator up this is a essentially an error correction that we made in two thousand nineteen in two thousand nineteen we added the definition for a ministry mmhm and. It it got rolled into this requirements for a trust the administrator trustee and that's not technically the the rule the rule is that one trustee must be a superintendent or the director of a of a coop where is the term administrators more encompassing than that so this just corrected an error that we made in two thousand nineteen it didn't change any procedures that eighty R. S. at all this deal the rule we just needed to line up the wall okay. Out so is there anything else in their own long along that line of subject to change I mean I'm I'm not sentence a subject to change but for example on page nine one seven Is that something new or is that just to you're moving someplace else here is on the line I just on the Senate today right so Page nine line seven line seven so this had to do with concurrent service with the National Guard as everybody knows you can actually serve the National Guard it that the commitment is essentially we can training along with some summer training that actually is permitted to be concurrent service along with teaching in in our system and there was some confusion with the language of the law where it didn't specifically say that and it was kind of in conflict with the general rule that you can't have more than one year concurrent service working for say two different school district or a public entity or whatever and this just clarifies that okay but this is this is the law and the rules that we apply we just wanted to put it in the code well that's kind of what I want is there any way to get that concurrent credit right okay thank you so much sense thank you Mr chairman you're welcome thank you any other questions from members. And I speak against the bill. You may speak for the bill. All right very good represent Warner you close for the bill I am close with the bill I move for a do pass I have a motion to passes or second go second from Representative Maddox any questions to the motion. And second. All right all favor say aye hi post. Congratulations your bill passes right to House Bill thirteen fifty two members represent one six thank you Mr chairman the house bill thirteen fifty two would allow a person to make claims against state tax refund I'm sorry I need to ask Mr Baird if he would join me at this time R. Duncan which interview so for the record please yes Sir Duncan Baird executive director of the Arkansas public employees retirement system are urging one you want proceed thank you Sir and there is a statement attachment verse from the actuary if you make sure to look at it please or go ahead Sir. Thank Mr house bill thirteen fifty two would allow a person to make claims against state tax refunds in cases where it is necessary to recoup an over payment and over payment is a payment to a member in excess of what is allowed by law overpayments frequently occur when the death of a retiree is not reported to the system in a timely manner less frequently an overpayment as a result of an error by the agency apers currently reports over payments to legislative audit India today on a weekly basis and since multiple letters requesting a repayment of overpayments and this is legislative audit issue this bill will help with that I would be glad to entertain any questions any questions from members. Does this just include over payments for folks that are alive versus include over payments for folks that are deceased because a member that was for the auto fighting or that is are those. Covered in this too yes this is typically for those I mean the biggest percentage and correct me if I'm wrong or when people have passed away okay. Thank anything to know that that's correct you know we pay our benefit on the first of the month in there for you know it's very frequent for someone to die within a month and they get maybe another month's payment or maybe two months payment before notified and so that's that's the the larger issue here and we just want to do what we can to kind of move down the path of collecting were more of those overpayments overtime K.. You have to know what the dollar figures for overpayments right now. Yes so we had in the wood in FY twenty we had a total of forty eight individuals totaling a hundred and forty seven thousand that was from death over payments we also had another instance we had about eleven over payments related to a double Cola that was around ten or eleven thousand dollars okay. Our members have any questions. Yeah but here speak for against the bill. Okay what would you do if if they actually receive that how would you get your running that well there there's several things that we do already you know the first thing we do is we we utilize a number of a death verification services and so we're constantly trying to master data you know just to make sure that we catch those even if they're not reported to us directly that we do catch a deficit of been reported whether they're in Arkansas or somewhere else so that's that's the first thing that we do you know but in the case of an over payment you know if we determine it really quickly we can try to reverse that a C. H. we have a limited amount of time to do that so we try to do that and then we start the process after that of the of notifying you know we send letters so we sent three letters you know to the address of this individual so so you know we just go down this path of trying to you know take steps toward recouping that overpayment you know with this tool we would have an additional tool as we get down that path to explore you know if someone has a refund due to them then you know we could potentially explore you know reclaiming part of that refund in order to recoup the overpayment. Please go ahead represent ref what would you ask you this so if that did a current does some with the wife or the husband would they be responsible for paying it back or would you just drop it you know it's I mean my understanding is you know when you when you die you have in the state you know you have assets of the state you have liabilities of the state the state and so we we continue down that path you know you don't. you know if you die and you get a payment you know it's not automatically you know due to your state or you know due to your heirs you know they're they're still process for us to go after that and and recoup that thank you thank you Mr okay all right any other members have any questions. Good push button sentience. Go ahead you're listed here I guess what what is of concern to me is the person who dies on the last day of the month. Do we pay people for the coming month for the past month. So so in our case we're we're paying them for the coming month that the first of the month and so when you retire with apers if you retire on June thirtieth and your first day in retirement is July first we give you a retirement check for your full monthly benefit on July first in order to accounting in the month of July right and as for the previous month thank you correct this we're kind of unique in that I think even the other systems that we administer pay later in the month you know the fifteenth of the twentieth and so we're just set up differently and that that lends itself to over payments you know the other thing that we don't have this we don't have a lump sum death benefit you know so for example if you had a lump sum death benefit you could recoup you know smaller monthly payment out of that but we don't have you know in the in most cases we may not you know an individual anything else after they die you know of course in other cases we other beneficiary benefit and so that that creates a different circumstance at that point so you do have something whereby you pay the beneficiary and amount of money exactly so with you know so if say you say a state employee was retired and they had selected an annuity option that allow their spouse to get a benefit if we overpaid that retiree by a month after they were deceased you know we would still have this revenue stream going to the beneficiary so we would be able to true up that that some going forward so it's not as big of an issue in that case it's really more of an issue the overpayments in cases where there's not a revenue stream going forward you know we're we've completed our obligation you know someone's died we've overpaid and in a lot of instances a month or two you know which may be a thousand two thousand three thousand four thousand but tell me why we chose not to have a lump sum benefit. I think that just goes back to the plan designed for a person so I'm I'm not aware that we've ever had one you know I I think just the rough math if we were to put one in place for example to try to. Help in the case of overpayments I think it would probably be rather expensive just because you know even a you know a five thousand dollar lump sum payment if you think about our full membership you know probably close to sixty thousand active and retired members you know you would be creating a new obligation for those members at this point. All right represent Richardson. Thank you Mr chair up just for clarity I heard you say that there was some overpayments in Cole of about eleven thousand dollars so how how is the cost of the initial cost of living adjustment right so how does that happen. Yeah that that's a good question so in that will be one of the audit findings that do you see in joint audit coming up in the next few months but we have a pension administration system that we utilize for all of our work flows all over processes all of our calculations and and we do that for a per State Police judicial retirement the old district judges planned so it's got you know it's a big system we spent a lot of time it was before I was with the agency that the agency spent a lot of time building the system building the logic within that and you know what we found recently it was actually a legislative audit that found it was. There had been a I've incorrect calculation for a small number of people for the color back in July of twenty nineteen so in essence instead of a three percent Cole it was a six percent Cola I think you know based on what I've seen it appears it was all related to drop exits and so when you just think about the. No the logic of the system you know you have people that you know different points in time with their benefit you have people with different statuses you know you have the status is changing and in this case it looks like it was just a system here where you know since somebody got a call one time and then they got a Cola a second time and it related back to. I would I would really say just the complexity of the logic within the system and You know I can certainly get you more details if you want more information on that but I I think that's a. You know on the overpayments we kinda have at least two. Two things that I see no one is this. Issue of death were were reliant on other people for the information that that we need to act on you know in the case of the error I think that just reflects you know the you know the complexity of the system the complexity of the benefit you know just the you know the amount of work that needs to go into making sure we get that right every month every year you know really every day that we administer the benefits. It. You don't represent Richardson you get okay hi any other comments or any other questions from members. You may speak against anybody speak for. Represent when you close for bill early in closed. Lows. I'm close to my desk for a do pass all right your motion to pass of second. Got second from US senators sample of a discussion to the motion second. If not all in favor say aye aye aye opposed. Congratulations you're patched bill we're gonna going to thirteen fifteen thirteen fifty members fit to has seven attachments to it if you would. Go ahead represent one thank you Mr chairman thirteen fifty is a state police bill involving tear to drop. Thirteen fifty would clean up the law related to the tier to drop to align with the administrative practices of the agency the agency interpretation of the current law allows tier two member to use reciprocal service entered the tear to drop this bill cleans up the language of existing statute to eliminate confusion and make this clear and the law is we traveled the state with our retirement committee meetings this was a very big issue for state police that they wanted this done they felt like that that was supposed to be the way that it was so Senator sample and I know many of you that were there we got hit over and over we're supposed to be able to use reciprocal service when it comes to making a sale tool for the drop program so. By the apers system found some minutes that allowed that this is codifying that so We need to do this. Correct any questions from members. Hey buddy to speak against the bill. They speak for the bill. All right hearing none any other questions members. C. nine represent warned ready clothes for your bill I'm closeness for do pass all right members year the Depeche of second. I guess second will give John rather stem cells second Johnny right any discussion to the motion second. All favor say aye hi a post. Graduations you've passed your bill. All right now so Senator Teague in the room. Okay. All right center sample is going to present Senate bill one seventy four percent of your T.. Sure sample you able you won't call the table with you are you blind solo. Okay. You know sometimes you get a chance to do a favor you reluctantly say yes especially when they've got a. Nav sticking in your back but. This is this is Senate bill one seventy four And the it's in that concerns active membership under Arkansas teacher retirement system members the. Just to this bill is that this bill changes the definition of normal retirement age to be sixty five with five years of actual service or at least sixty years. Hold for thirty eight years total actual service that's the whole gist of this bill. All right members have any questions. And no separation I'm sorry I forgot that but anyway the C. I'm sorry say again. It requires no separation on that age okay. All right we're gonna go right in line Senator Elliott. Thank you Mr chairman I just would like somebody to explain why we need this and and who wants it. Unless the come up Clint I know you've entity so for the record but because your backup units involved in a teacher term bill which interview suffer record again please yes Clint Rhoden Arkansas teacher retirement system okay go ahead okay. okay regarding your other your question Senator Elliott The primary purpose of this bill from my point of view from make your support you is to eliminate the one month separation period that we currently have we have a one month separation period as long as you have thirty eight years of service. the problem with that is as we really dive into the IRS regulations is that small separation period actually could encourage agreements between an employee and employer I'm sorry did you want to it could encouraging agreements to come back to work after you have separated so and that's strictly prohibited that we don't want to have an agreement on the R. S. prohibits that so you have to have a bona fide retirement or the normal retirement age by shifting biggest so that the requirement of thirty eight years of service standard from a one month separation definition into the normal retirement age that's actually permitted by the R. S.. So essentially we're just kind of maintaining the status quo in line with the IRS guidelines. So what we have been doing by. Not. In a blend this explicit We met with. We just been doing it wrong. Arguably we could have been doing it wrong I mean it it's a very high evidentiary standard but you'd have to prove there was an agreement and all that yeah this just makes it a lot clearer so that age your skin Council are members in a more definitive way and not encourage you know not to have any kind of encouragement to have an agreement after one month separation the six month separation you know we're hundredths a good with that does not encourage you know that's a long time to hold position open exit or a Is the one right separation is period is a little troublesome okay so as to the if I if I'm giving somebody the reason if I just sum up what you what you just said Basically this is to make sure we're in line with IRS guidelines and requirements that's a good directly does just okay all right thank you if. Representative Richardson. Thank you Mr how many do we know how many people this will affect. It's it's hard to put an exact number on that this year the actuaries and analyzed it to determine that there's no material financial benefit or no financial impact of the systems and that's mainly because. Not very many people actually take advantage of that one month separation period and in probably not a whole lot will actually be affected by just continue to work you know what somebody actually does have thirty eight years of service most of the time to go ahead and retire a hundred percent and enjoy their retirement but there are few cases where individuals to whom. Just love to work in a want to continue to work so um this is I would say less than a hundred people a year out of the you know the seventy thousand or so employees that we have. Right any other questions from members Senator Elliot. Yes I seems to me and and this is really a total but just from since I know so many educators is is this something that has happened more frequently with administrators stand with teachers do you happen to know I just seem to know a lot of administrative. Quote unquote call back yes I actually see I see it more with administrators yes absolutely okay all right thank you. Let me ask you a question that though if the say for example hypothetically teachers thirty eight years sixty two years old and they could retire this year the passage of this bill that would allow that teacher to go ahead retire started all the retirement benefits but be able to continue teaching because we no longer have the separation period that that is correct okay so in generally this is this is a very member friendly bill and in my point of view. And my only concern with this from the beginning as it might be too expensive for the system actually have a actuarial cost but after analysis it was determined that because it affects so few people would actually take advantage of this that it really doesn't have a cost of affect on our system but if that person who's been teaching thirty eight years as T. dropped out ten years right are they going to be required to continue to pay into T. drop if they turn around go right back to work or they will be required to pay anymore they'll be no more money put into drop form they're just they're just basically drawn a salary at that point right and that's that's true regardless we have a post in your T. drop program where the deposits actually stop what we pay a little bit higher interest rate That's true regardless of this bill so we could retain some really good teachers that want to work just don't want to they just want to work in this should be good for change then possibly I do think this is a good retaining teacher policy okay any other questions from members. Pushbutton John his. Please represent Russia thank you Sir all. And per room the line twenty nine on the first stage images at least sixty years of age and thirty eight years of maybe I'm just getting crisscrossed on this but I thought it was fifty five years of age in twenty eight years. So so that the the first statement always have to make about this bill is that in order to get full retirement benefits the requirement is that twenty eight years of service or reach the age of sixty this bill does not affect that in fact that does not affect that at all this is strictly the normal retirement age. All right any other questions remember. If I speak against the bill. You may speak for the bill. All right rippers are sorry senator Thank you motion do pass of the second see a second down there we on the on revisions meant to all right Your motion to pass a discussion to the motion. No discussion to the motion so with that all favor say aye opposed congradulations Senator Teague sample youth pastor bill please please. If could committee immunity wondered here is that. All right let's bill for the day Senate bill five senators sample you got anybody wants it with your youth yes I'd like to David Clark. miss Clark if you had when you to see table please state your name and who you're with for the record please and one Senate bill five members there is a actuary attachment to it. More mature David Clark executive director of local police and fire retirement system morning all right senator sample okay members this is a an act to amend the law concerning reciprocal service credit the benefit rights and for retirement. plans Section one states that law for years is reciprocal to state wide defined benefit retirement system and not a defined contributions plans to touch the retirement available for it terminated her vested former member of lawfully who utilizes reciprocal service or volunteer earlier or do you death of benefits as possible to the survivor of the former what the member what three will use a final average. play reported during the members time he or she was covered well offered to calculate all of the benefits of the execs sting stipulations of the House of final Cambridge buddy produced by the reciprocal system be used for the benefit calculation payment purposes is not in love to speak to a prudent plan design benefits by approved for a lot fee should be based on the party reported to the system not an inflated final average play from another retirement system and a grandfather provision was stated to have a lot for use the highest finally Ridge by you for membership consisting for a person who establishes reciprocity per to April first twenty twenty one hand in his member contributions on account Lafayette's term of retirement. Member seven questions. Clark anything you wanted. No Sir thank you Senator Elliot. Of I I guess I need to. Just a little bit more discussion about exactly what we're doing here so is this is is what we're passing want to affect folks going forward. What is that twenty first date that that April twenty twenty one date may how does not apply to people to whom. Yes yes center up the April one date is twenty twenty one is of the affect the proposed effective date of this bill signed into law of Y. lobby pick that is we need to have a point at which anybody there was a in the system with member contributions and had established reciprocal service credit a former lobby member another words is working elsewhere love you would use the final leverage pay up the other system if it's higher for the purpose of benefit calculation when the person goes into retirement anybody that establishes reciprocity on or after April one of this year will then use the preferred benefits design which Lafayette bills is better for the system and that whatever the person earned another words if they had you know a thousand dollars if I leverage pay when they work or the lobby covered employment that would be the paid that the system would used to calculate their benefit when they go into retirement down the road. And so and so I'm clear about it I I get it that is better for the system that's what is it. Is it better for the employee what what's the deal with the employee here for the former employee no the benefit calculation would be lower by use of the the pay that would actually reported to the system during their employment but the reason why the system is asking for this change is because the contributions are paid to the system or based on that Hey that the person earned during the period covered employment under Lotfi down the road save twenty years down the road they could have and and and war saw thirty six cases that we have for twenty nineteen to twenty twenty we had examples where people had significantly higher apply leverage pay elsewhere in the lobby had use the higher cloud leverage pay to calculate that benefit although there were no contributions or any funding that came into the retirement system pay that higher benefit non attainment a lot monthly that you know I know I know benefits that no higher pay the higher contributions that come into a lot the but you're paying based on the higher salary from whoever else that work in the other system yes ma'am the actual analysis that was cash the bill shows that on average the benefits of this case is I just referenced were the benefits were seventy percent higher the lobby had to pay first persons with the person really would have been paid had we used the Hey that was five report to the system so you know what we have is an unfunded mandate when we use while average page from another system that is hired and so we're we're saying only going forward basis the preferred design which we feel like it's better for the career service members of people that remain in the system to use the pay this on account with the system. The another Mister chair somebody another bill similar to this early on this. There are several bills actually that have affected other systems and then we have a broad bill a House bill thirty twenty five those looking at cleaning up I represent or warrant that is this looking at trying to of update the general provision of co that affects all the statewide systems so this is this is a rather common topic this session and do we tend to have a significant number of folks coming from another retirement system into law thank you set pretty calm the way it works both ways we have people that have had employment elsewhere and then go into employment by a lot be covered employer and then the example aside a moment ago or the people that had some amount of time under all Lafayette by what the covered employer but have gone elsewhere to other some other position and so they will like the time up for you know benefit payments purposes vesting purposes but what lobbyist is proposing pardon me is that instead of having the filing which pay for most other systems you know we would use our own file leverage pay so they're not gonna lose that connective itty of the reciprocal service credit we're still going to have the higher payment from the other system because they're presumably now making some higher pay elsewhere and so they don't lose any of that what we're doing is we're actually feel like that this is his best your physically for the system and that is an this is my last question but it is there any affect on ability to recruit that you anticipate this change have any effect on the bill to to recruit folks into the lobby does not see that that's a genuine concern we have had people of voice when I say we we externally of the system people that are no longer covered by the retirement system saying that there could be problems recruiting whether state police or with the sheriff's department. It's of. The reason why lobby feels like that that is not a genuine concern is because when people leave I commend this will position and they go to let's not across state police which is a state police because generally the pay is a little higher sometimes significantly higher these people are not necessarily looking at was my retirement benefit going to be twenty five years down the road they're looking at I'm going to be able to go to a career choice I want and by the way I'm going to have a much higher Hey during my working career so I don't see how it will sincerely have a true of recruiting problem all right thank you thanks Mr all right here we go in the hopper more recognized co chair worn and then we'll go to Representative Maddox or a culture one. David you a mentions something in in a unknown working with with all of you guys one of the things that we've we've tried so hard to do is to shore up each. Retirement system and when you mentioned having to pay out. At seventy percent more. Then what they've come into the system contributing and actually had in their accounts. Can you give a couple of examples the just. Numbers so that that. Makes it more real to the members here because. Your here's what we're trying to accomplish when we're talking about this because. We. People that work in more than one system get two checks one from let's say teachers and one from from a perch. In those those checks are based on the time they've been in teachers and the time they've been in a purse. But in this case what. What David is talking about is trying to let his system pay based on what they've contributed their. And let the other system do what pay based on what they've gotten. But in this case he's trying to stop the system from. Having to pay out at a higher rate because they were in another planned paid higher. That is such a hard thing to do on the system. To make it pay out at a higher rate. Because they made more in other systems. We're we're making it. Where the system is paying out more. By doing that. Then what they brought in. And that is a real drain on the system guys so give a couple of examples if you would yes Sir David just bring that picture home sure and that's actually a good US distributed to go through because I think sometimes it's we talk about a seventy percent higher benefits insight what is a really mean when you break it down to an individual level two quick things if I can of mention also is that both a lot of people trustees and the Lafayette membership supports the Senate bill five so our membership which you know is in about fifteen thousand as far as active and retired of paid service members so you know we we have a lot of support here from the lobby side of the equation and we're hopeful that of the committee what we'll see this that this is actually a good bill just a couple quick examples is that from the thirty six people that I referenced earlier we had one individual and they had a total of thirty three months of service credit under Lotfi. Of but they want to work elsewhere totally permitted they're finally rich pay under lobby was one thousand seven hundred ninety dollars the final every spare the lobby had to use in the other system was six thousand four hundred fifty six dollars so is the roughly three hundred thirty percent differential just on that one case we had another case where the person had fifty months of service and the final every pay under lobby was one thousand five hundred thirty three dollars but the final over restraint that LAPFI had to use off because of the system produced a higher final average pay was six thousand one hundred ninety three dollars so that we just read about roughly a four hundred percent differential and there's obviously other cases like that to just over the last two calendar years nineteen and twenty of so this happens you'll frequently because that there is a lot of movement you know with with people going from one appointment to another so we feel like that when you break it down and have lobbied for the benefit to the person for what the accrued when they worked on a lot become employment they're not losing anything they're getting exactly what they accrued when they work under loppet covered employment so we're not taking anything away factor paying them exactly what they were entitled to the fact they were able to go to another position and have a much higher pay which is fantastic for them no problems whatsoever we're just saying let's not require the retirement system you use that pop the higher pay you now calculate the benefit under Lotfi. Thank you represent Max. Thank you Mr thank you for that I had a couple concerns about this bill you've cleared one of them up with with your with your previous answer there but I do have a question about on page three where it states basically that Lotfi will not be required to honor for a gross going forward could you could you explain me with the thought processes on the yes at the very questions well what lobbyist trying to do is take the retirement system out of the equation of the fighting Meryl property in cases of the forces of which is the qualified domestic relations order by the way for those that may not be familiar with water with that term is that any quadruplets on file right now what we have seventy that are in Hey status and then another hundred forty three that will be in some future pay status assuming the member actually lives to retirement eligibility of is that we want to stop accepting new Cuadras any anything that's on file now will continue to be administered but on average it costs roughly two thousand dollars per quattro to set it up and get it ministered work with the outside counsel of in our issues that we're having primarily is with outside counsel working with Lafayette getting a of water this acceptable to the retirement system would provide a model Walker wrote it's actually a fill in the blank documents on the website but for some reason there there or instances that attorneys refused to use them all quadro within try to argue through the process with lobby that we have to accept what they have now created as far as the proper documents so we're saying it that's fine we're just gonna go with the step back as a retirement system you work out the Division of what are you gonna do with that the divorce and not have what they have to continue to be interjected into that process so that's a thought process just bring the retirement system back to just a ministry retirement benefits and. Not happen to accept new quad Rosa on a going forward basis. Good. Okay that's interesting so much I guess my follow up concern would be so if someone forcing goes through that you know domestic relations action and and they have. Thirty some odd years of retirement the judge orders it divided and and there's a quadro and then the system will pay out to to this back to both spouses basically so you're wanting just to get out of having to comply with that court order basically well yes because the court order is based off of the bottle water that if council would follow the model Parker would actually use what we provide that it makes it to where we can administer the process of of the Division of the benefits however you have to remember that on a going forward basis is that were probably looking at twenty thirty years or longer of paying a payment to that alternates pay either now ex spouse and so we would rather use the retirement system's resources to focus solely on the member rent retiree obviously and paid their benefits and if they're going to get into a divorce situation have them divide that property outside the confines of the retirement system and also for a qualified plan of the iris is not required governmental plans to administer Clive rose. Many plants do in lobby has over the last few years but we're saying okay let's let's step back from that process. one one one departure thank you that that's interesting so I guess the the thought would be then the spouse would have to be awarded alimony or some other benefit and then just go and pursue the X. for content or what have you but that spouse wouldn't have the protection or they're gonna get their benefit paid directly from the system that is that's my concern or maybe a municipality there is none of those that yes Sir you're you're exactly right is it for the the divorce party they could not look to the retirement system to help. Moderator or a you know a mediate I guess would be the the division that property and so you're you're right the the protection for the now former spouse would not be there however we're trying to bring or near or focus back in there on the retirement system and trim away various costs that we feel like they're not really. What the plan should be dedicating resources to and as I said on average the cost of your right now is about two thousand dollars your from start to all three to finish and sometimes we go months go are going back and forth with opposing counsel trying to get a pool of water that's actually example to the retirement system they could then be administered some point down the road and as I noted my comments we have a hundred forty three of those examples right now at some point in the future they'll be a payment that will start but they're not currently a patient at us right now so the the overall numbers are low as far as you know we have a total of about thirty two thousand four members and their retirement system and so there there's about two hundred and ten right now there are either on pace status or will be in a pace that is a some point to future so the numbers are really low and we feel like that by trimming it down the administrative costs were were actually separating another responsibility getting away from that for for future quadro Mr. Can represent right. Yes David trying to find a picture here let's just say that you have someone who was a police chief and March three Arkansas and they were playing and the lofting and I did that for twenty years. Then they become Russia say a state trooper. When I switch over from that city system of lofty over to eight hours do they carry that money from lofty or that time does lofty. Reimburse they reimburse a person for that your question yeah a under illicit let's assume that they're going to establish reciprocity link up the the time of the two systems Bob you would hold on to that twenty years of service credit the person has a mark three and then when the person goes into retirement some point of future lost it would pay that person the benefit based on the twenty years of service credit and the state police system would pay the person whatever years of service credit that they have with state police so they would get to benefit payments one coming from Lafayette one come from state police. Follow please sure well David your professional opinion on this if this occurs it's not hard to system is. Is it is not awaken neighbors your stuff of no a person we're talk about changing a a for lofty is we're asking to change for not what what what apers does our state police or any other system are we talking about what lobbyist required to do at the time retirement and that is in this case is used to find leverage credit would have been earned at marked tree in your example what what David the situation of twenty years that occurred over was lofty there's going over to tapers nine this checked it's gonna be received by the person that is actually going to be retired that's not gonna be allowed to check that's going way I appreciate and I run no Sir you know the the twenty years of service that that the person earned at marked tree they would receive a retirement benefit payments from Lotfi because by law the and then whatever time they are through the state police they would receive a benefit paper from state police for that time so they get to benefit payments. Yes Sir thank you generally. Thank you Mr Speaker this is a follow up to represent Maddox question how do you use that there are not that many instances of do you happen to know I have an idea by gender if the person who would have to go to court or do whatever if if that's male or female that this is happening. It happens both ways what we where we have divorcing parties that are male or female but it's you know right now and and I don't have hard data but was going from what I've seen as far as cloud rose it's the member is male the divorcing spouse of the soon to be ex spouse is being in more cases. And so to be clear not are we send that person now rather than because it's it's somehow a burden I don't mean that pejoratively but is somehow a burden for lot fifty two to continue to be Be a part of this we're just going to back out and then that person's gonna just have to get an attorney or whatever go to court to get the special outside of lunch right yes ma'am that's correct right now they already have a term you just a matter of them working out the mechanics outside of the retirement system so it's not as though they have to bring in council there in most cases they already have attorneys of. I'm sorry about that I'm not I'm not mistaken that I I I didn't I wasn't clear on puts the burden on law fee to just do this yet two things it's the administrative costs that we're trying to say which is on average about two thousand dollars per water and that's for staff time and then LaFee legal counsel time to review and also they say okay we finally got to a point that we have an acceptable acceptable quadro that the court can and they can ask the court to at the the judge sign off on and then circle back to the lobby and then put in there the preparatory steps to help the person going to pay status at some point down the road we have to remember that most of these like the hundred forty three does that talk about that are going to be in paste at a some point the future is that we have to then have information from office of the member which when they go to retirement but then the ultimate pay or the now ex spouse we have to have their information to be able to get the payment into their bank account and so that requires offices setting up information inside the system and then getting the payment about the door each month it is it unmanageable NO it's not unmanageable order saying that let's let lobby focused solely on retirement benefits not on the division of marital property. Our our our our the Majority of members in life a or they are. What's your guess about the proportion of men and women. Rule of. This is this is I guess okay I would say that it's it's probably about a ninety ten split. And and that I hope I'm not wrong but I think that that's correct yeah. At. Well I would I would guess that from from close to and I'm not trying to just hold you to that number thank you But even if it's eighty twenty because we're talking eighty twenty in this case ninety ten we're talking predominately male right yes correct so that person predominantly trying to who would have that burden would would be would be weather and dust affects kind how we're set up. In in that case of the ward that's correct. All right thank you yes ma'am. Senator. Thank you Mr chairman miss Clark so you made a couple comments he said this is not like you want to get out of the quattro alignment in the. The divorced spouse or the other party would have to get the assets elsewhere were. You know the concern would be if there's not any other assets is there a way that they can. Get a lump sum benefit or to head to the continued payment you know how the how the quadro works is that the payment to the office of Patey or the now former spouse starts when the member retires terminate service and ordered a takes a refund of contributions and so the moneys that are divided at whatever whatever that event was the that occurred. Then and the payment that goes the ought to pay based on the terms of the quadro so if lobby did not have to do the water rose then of the divorcing parties would determine whatever the agreement is for the the the pay off to the alternate P. or the now former spouse and I think that's you brought up a really good question represented Perry is that uh there are more instances that we seen where people do not enter water rose but actually make agreements outside of law the so that the person's benefit is not attached in twenty years down the road they still remember all that's right I had a marriage that you know what resulted in divorce and now every month I'm reminded that others a payment going out to the now ex spouse because that person has a division of my benefit okay so follow Mr. On the yes go ahead the plan doesn't allow for a lump sum benefit on the quarter it's got to be a monthly benefit well no it there if the quadro stipulates that there is a lump sum payout because the member took a pay out that we can do that but no if there is a monthly benefit payment that goes to the member that a portion of a monthly benefit payment and which is just simply a payment it's not actually benefit because the cost of living adjustment that's paid to the owner pays amount it becomes our monthly some of some dollar amount that goes up to be able to be okay. Thank. Yes all right. Okay represent right. And then that will represent a medication next. Okay David. If the first twenty years honesty is in you go over to state police. And you have to supposed to have five years to be invested in that rise up for state police I believe lobbyist now ten years. What would I do not have to wait five years to get credit for those five years before they actually started drawing off of a person will now remember if if they go to the system and they actually link up reciprocal service credit not everybody does that if they do like a principal service pro between the two systems that may have retired from both systems in order bill to drop benefit so in other words you can't have somebody go from marked tree for example to state police establish reciprocity and and start drawing their mark tree time while they're still working as state police they have to retire from both systems in order to draw their benefits them when they do in this case that we get a benefit from our trees time and that a benefit from state police for the state police time what would place for. But what days the five years that you actually have to have like was. School teachers or county officials whatever five years for investor. What about that I mean borders that come into play. Going over into this new system okay in L. a one week or would work step off into as far as speaking about state police the other systems for a lot these purposes you can't use reciprocity to achieve that sting so a person has to have ten actual years of service credit in the lobby in order bills say Hey I'm now bested the other systems I think you can use reciprocity for vesting purposes of so in that case what like with the marked trees state police time presumably the person going to state police could years or twenty years of service credit when they link it up with state police to achieve the best and status and state police. System or state police supporters stay with that example so the point by linking up the time is that the reciprocal time doesn't just go off the books they can use of real quick benefit payment purposes at some point the future and that's assuming by the way that they don't occur any further time other than three years at State Police presumably when people leave like a lock or employment go elsewhere they're going to work some amount of time and achieve a vested status if not many many years of service credit elsewhere. All right represent Maddox one more time this it does three years Hanson represent right hang on a sec let me get represent Maddox and then I'll come back and thank you and get you okay so button up for sure but again represent medical it. Thank you and you may not know this and if you don't that's fine but do our other systems apers teachers Today honor quadrotor do no yes my understanding is that they do a water service yes or I thought that was the case but thank you Sir yes. Duncan David on a Dodger head affirmatively of that's what it is anybody else out robin. Good okay represent right push button if you want back in and then we're going to of what you done represent medics yes okay we'll put it on the ground representar a. Because there. Dave those three years that you know coming on after the the twenty do they can I draw from my results of three years yes under the yes or not yes yes Sir is that they would link the time up and that that would make them best under the April system and if they retired at that point then they would all benefit based on three years of service credit under apers and then the mark Treeton we talked about twenty years of service credit they would earn a benefit from Lafayette B. and B. paid about a floppy based on that twenty years of service at marked tree so that we get the to benefit payments okay so David in that. Upstart. Or entity and then I'm I'm let's get one more and then we're done it will do one more. Represent right get a legit one more and then we're going to. We got somebody speak for the bill go ahead push button thank you thank you. I'll be okay if I can understand this right here those two years they don't have to have the five years of lack of vapors to fall into this that that's gonna be waived well not no Sir of thanks to think it is yes and I know it's yes in that they can use that two years or three years time at the other system that stays at the of the system with this apers or state police and when they go the retirement they would be paid up benefit off that two or three years worth the time so they don't lose it because they're making it up for reciprocal service credit by the way this is a difficult topic so I understand the follow up questions. What what we're saying here in this case the changes that we're talking about doesn't do anything for the other retirement systems were focused solely on what life you will or will not do okay so it's just the changes for a whopping thank you David yes thank you Mr thank you Mr chairman you're welcome Sir all right I see no other questions for many other members Anybody speak against. We are Roger Smith signed up to speak for you still speak for Roger. If you adjust your name and title on who you represent for the record please Sir and then you're recognized your head. Thank you Mr chairman my name is Roger Smith I represent police and fire personnel police through FOB and fire through the state firefighters association those organizations fully support SP five because. Reciprocity was designed to make sure you kept credit got credit kept credit for the years you served in any system period you don't lose it just because you moved to a different system. To take advantage of a better job or whatever it may be but the members feel that nobody should get a benefit based on the time they didn't earn now they get credit for the years he served but their salary is what is supposed to determine their benefit in the system they were in so when they were Lotfi whatever that salary is they're entitled to that benefit that's exactly what they should get that the members of the system are totally opposed to the idea that you can go to work in another system at a higher salary and then use that salary to determine a much higher benefit Lotfi. That is an unfunded mandate on the system nobody paid for that retirement check that that person gets over and above what they actually earned so the idea is to stop the abuse to plug that hole and let me say this the farm police personnel that that are covered at Lafayette are very cautious about anything that isn't expense or unfunded liability to their plan I think you would understand that I think all of you would agree nobody should receive the benefit higher than what they've actually earned in the system they ran at the time it is not a recruiting detriment because people change jobs for more pay or better opportunity and that state police as an example there benefits roughly fifty percent more already than they would be a lot fee. And they don't even have to pay for that benefit the employer covers a hundred percent of that cost where a lot fee both the employees and the employer are funding the plan so unless there's any questions I just want you to know how strongly police and fire support this bill because they think it will stop the abuse that has been going on thank you to me you will take a question yes of course under Chesterfield thank you Roger a good morning what you look on page three at nine nine. That's necessary because it almost seems like it ought to be a standalone bill. So would you tell me what line again please line nine it says a qualified domestic relations order including the qualified domestic relations order as defined under the Internal Revenue Code this is on the question about the quadro I think the members Normally some want to use the quadro as a way to make sure their spouse gets a benefit but ultimately in a domestic what else would you call the divorce. The attorneys ultimately decide for both parties what what they're gonna receipt for what they're gonna get to keep and therefore I think the idea of forcing the pension system and to maintaining records for years and years and years before that person actually retires becomes problematic it's better that if the court ordered Disposition of benefits between the two parties that's what they should follow period and then the parties to that whether it's the wife for weathers the husband in the end if they don't feel they're getting what they're supposed to they have a they have the ability to go back to the court and say they violated the agreed upon a divorce settlement. Thank you. Okay Senator Elliot. Yes. What records do they have what records are they have to keep the retirement system that the items that are on recess for them to keep those records may not be so owners to have the record in a file it's just that it may be a number of years way way down the road before they have to figure this out at that point some people may have died I mean I that's really a better question for David that it is for me because I don't have anything to do with the administrative side but the main concern on the part of police and fire is they they want the reciprocity issue too I want to protect everybody making certain they get credit for all the time they put in they just don't want anybody to abuse that to cost the system a great deal more money I know that doesn't exactly answer the question but I can't really okay address that. Is it a is it okay if I can answer your. Do you want from David if you will yes yes Sir Elliott of in real quickly what Roger had said about the membership they do want us to tighten up any of the costs which include administrative costs as I mentioned earlier about the ability to set up a quarter on the front end by the time we get from point a to point B. B. and B. is we're now done waiting for payment status of when the future is on average about two thousand dollars per water and that's not you that's being funded by the retirement system is being borne by the retirement system however the recordkeeping aspect isn't actually Roger did hit on on this correctly is that while we have initial information on the front end of your the two parties of the primary question here of course is the alternate paid the ex spouse is that there are cases where the ex spouse even though that person is required to keep their contact information current with the retirement system that does not always occur and so now we have to try to find that individual at some point down the road you know we get a benefit going to him or her of and that we make the payment I was electronically so we have to have no update tax information on a going forward basis when they submit tax changes direct deposit information when they submit changes address changes when they submit changes that's that's the sum total of the activity is just that when you multiplied over you know many many people as this continues to grow you know we're we're saying that we recognize the cost savings now that if we implement it could actually yield benefits down the road for the retirement system. For for just a moment okay thank you for that for just this man for a few minutes when we went from the I don't think any of us have a problem most violations that speak for myself but I think most of us don't have a problem with the initial discussion that we had about Where you want to go to get your retirement benefits because everybody understands I think the unfunded mandate part of it. I'm for when we started the other discussion I was actually looking for another bill this seems so out of. Place to be in this bill why isn't this two separate. Bills because the because the. We're generally we have things that are this what a part is like having two subject matters in one bill. The actually there there's three topics and we we look at this is of technical changes we had you know the reciprocity on that would you talk to us on a moment ago re ordering the protection of system assets which is in the the second section of bill which includes the quadro discussion and then ultimately the common thing that you for your first several times and that's the secure act change however about the age seven a happy to be to the US in the section three so we had three items that in the bill are agreed that this was appropriate to put it into one bill so that's the reason why I was all placed in Senate bill five because we're talking about technical items on of these very sections. Technical yes ma'am yes okay all right thank you thanks Mister yes ma'am. All right I don't have any other questions for me of the members Roger you done. Thank you Sir. Okay there's no other questions for me members anybody else to speak we've had Roger speak for the billing but to speak against the bill. And I speak for the bill. Nobody else is signed up for against And I'm or give the gentleman just apologize moment here. And Senators sample you. Reddy close for your bill or one shares mother sought. Pretty close from a bill. Motion to pass motion to passenger second. Second. Hi Charles seconded all right discussion to the motion and second. A discussion. All right of push button represent medics. Thank you Mr Janice you're right to belabor this point and I think this is a really good bill I just I just have a concern with that one part about the court or everything else nothing is really good and I know we've gone over it but I just see some inequities happening with that the collection mechanism is not that easy and to say that it was also stated earlier that the that the attorneys work it out but a lot of times it's the circuit judge who works at is is this is what we're gonna do and I worried that the collection from a Hey the spouse is to be paying could be difficult but again that's mine and I hate to be difficult to belabor this but that's my concern with this. Senator sample yes mature. Not since the court reporter so controversial on Lactalis bill down and strike that language about quarter of and run it next week for the sponsor that that is fine very objection to senator Portman bill down to amend that. You are here no objection then center pull bill down and will put on the first of list for next week because we've discussed this thing pretty thoroughly and should be able to move it out of here quickly there so all right all right thanks Senator sample thank you. And represent warm recognized. I just wanted to make a quick comment I just realized that in looking at those bills were was saying we had seven per week left I bill to recognize I have several shell bills in that so we are less than that so. Thank you and R. chan is to make sure that we've got everything well publicized only by this could be affected by any of these would know what day they're going to be heard on Senator Chesterfield thank you Mr and I know we've had a long meeting but my question is if if a bill has been on here for two weeks it is supposed to go to deferred list. Actually I don't think any bills have been on the list that we have not heard other than apers we are waiting on a an amendment or something consent T.. We just cleared out center teach bill okay Mr thank you yes we appreciate okay all right thank you any other discussion anything come before the committee. Without that then we are German thanks for being here.