Public Retirement & Social Security Programs-Joint

Can you hear me now. Can you hear me now. Can you hear me now. The. About now. Test. Test one two. Test one two. Okay. Senator hammer would you like to make any comments. Thank which co chair. Thank you Mr co chair can hear back David can you all hear back up up there. Okay may we get staff to get it checked out let me just talk loud why they just out they can be working on it thank Mr co chair the intent would be that next week we will hear bills from Asher and what we have talked about is that we will try to have all the bills that we will hear next Monday posted up by Wednesday so that everybody will have at least four days notice of what's coming up for next Monday but Asher's will be heard next Monday that right robin you're good to go okay so that'll kind of give you a heads up that way citizens can know what we'll be dealing with at least three or four days in advance and they will feel like there's any surprises so thank you Mr. Thank you and and the plan is we're we're trying to hear from each of the plans week by week hearing from a lot fee today Asher's next week. Then we plan to hear from teachers then the find next week would be a first so that their staff know when to be here so partials all right and most of the seat the list that you've been given. I'll do what I don't have O. okay we were working on a complete list of bills that have been filed but we do not have it yet so okay you can hear now good all right let's move into the our bills for the day. S. C. R. one Senator Teague you're recognized to present. Good morning. So your room we talked about this a little bit last week this is a bill that would just. Ask us to S. the search committee administrator to hold a election over whether or not we want to thank you so security tax or not. I come from the point of view that I don't think it's fair for us to not place of security tax and our people to pay so we had a couple questions fiscal impact statement. It says it would cost three hundred sixty one thousand two hundred twelve dollars and twenty nine cents. A year. And there's a statement from a joint limited says it doesn't affect Are counting Accountable plan under accountable plan so we wouldn't it wouldn't be taxable that would mess up to packs are pretty. class all right to any question which chairman as long as they're easy and quick. Thank you senator take do we have any questions okay. Representative rye yes Sir R. Senator Teague added this two hundred sixty one thousand dollars how much of that would come out of the the budget for the state they will all come out of the legislator of our budget what is it Sir is it matching money. No it's a six per six and a quarter percent. A six point two percent it just it would be part of our pay roll then and I would take it out of. So they would all come out yes what should phone placer you're recognized at the two sixty one actually would come out of the the state budget. Yes okay out of our legislative budgets okay. Three sixty one I was happy with the two sixty watt Senate better. Hi Sir hammer you're recognized for a question. Thank you Mr Senator Teague I was you mentioned about they would vote on it could you explain for me the process that if we get this out of here where to go from here what are the process what are the steps after he gets out of here ham I'm not exactly clear on all that but as I understand it this just ask that the social security administrator for Arkansas hold a referendum and that would be where we would all gather up and bill. Okay. Okay thank you. And I don't know when that happens. Any other questions for Senator Teague. Okay I'll close appreciate a good vote. All right alerting motion. Also moved okay. All right we have a motion. The. Have a. Second. Maybe not. Surely somebody would give me a coral second. Okay we have a second. All right any discussion. All those in favor say aye. All those opposed say nay. Seven. All right senator sample you are recognized to present SP four. Mr I would like to have David Clark here today with me is not present to spill. Thank you would recognize yourself. Senator Bill sample. David if you recognize yourself so you're with David Clark the second record lawfully. You're recognized center sample members were here to do to present SP four it's a lot to build in the proposal is meant to alter the increasing number of disability retirements and their calls the changes are summarized as follows section one will allow the law to board of trustees to add an additional amount to the employer's contribution rate for an employee employer with access to disability. Or higher rates of disability The premium tax cannot be used for this fund There were this added cost the board will finalize the details for rollout. Of this this bill to load during the twenty one year. Section two delays this section of code for temporary disabilities LaFee provides disabilities for total and permanent disability should not temporary LaFee does not show use of this section of code for at least the past two decades hospital longer so it stops late section three moves to presumptive duty disability cancer section from the non duty section of code to the correct duty disability section of code and it will be in section six of this bill. Section four and five struck toward probably. Fuhrman or area of non duty and the area of the duty section of code what's the disabilities required total and permanent determination not M. U. S. and Chris her work probable section. Section six is for the present to duty in this bill to cancer tax from section three above is being re relocated. This area code covers just due to disabilities. Section seven and reduces the designation for a duty disability retirement and the benefit calculation for each catastrophic duty. A lot of the anticipates there will be a rarely used. the hazardous duty what the anticipated says will be used in a limited number of cases and so the ordinary duty Lafayette anticipations two is will be the most frequently used designation. Section eight provides more opportunities for a lot for you to review and approve this building once a person has entered retirement and before turning age fifty five which is normal age of retirement this section also reduces the time to disability can are refused to submit to a re examination before his or her disability benefit is revoked. Section nine is limited to technical claim that. Section ten restriction for retired person who is James cover employment from being able to apply for disability retirement so the early provides restrictions to type of allowed employment once a person has moved into this bill to retirement so the insurance workmen's compensation provisions of that are not used to determine eligibility for a lot disability benefit in section eleven contained to emergency clause that ensures the changes in this before applied without delay the effective date will be April one twenty or two thousand twenty one. We'll take questions. Eight senator Chesterfield you're recognized. Thank you Mr chair in section. Six it seems to. Are these the only illnesses for which individuals can claim. Disability. Mr Clark into the yes Sir thank you upper section six of this is our what is doing it is adding three classifications for not taking the yes because right now there's just one. Well my question really is simple with Colbert nineteen there are some disabilities that are accruing to individuals that we did not that I'm not sure we can put under any of these so I'm wondering if it would be applicable to those individuals who are members of the retirement system you represent would they be eligible to get that disability even if it were not cancer leukemia or the other illnesses to which you refer fair question yet again on the the the section that you're citing is what's called or what's commonly referred to as the presumptive duty to cancer a provision so as far as code no that would fall under that particular Catholic education classification but it would fall under the hazardous which is what they're curtesy right now sixty five percent so and that's comparable to the cancer provision thank you so much thank you Mr. Okay thank you senator senator Eliot your next. I thank you Mr did you say this section nine is is dust technical clean up the regular correctly yes section nine yes ma'am okay so everything does not means an innocence is everything in there or something. That way in the law but it just needed some a little bit of tweaking if yes ma'am yes except for the only thing that lofty requested was on line twenty one to change the word salary to pay the code raptors at the L. R. of cleaned up the remaining portion of this section that was their changes and it doesn't take anything away from what's currently they're just makes it clear for okay. This bill in any way responsive to any of the and a plan legislation last session that had to do with our fighters or this is I apologize for time please. This bill is this bill in any way responsive to our legislation in twenty nineteen that had to do with firefighters and cancer and so forth no is this is wholly separate this is actually a product of it in you to spend a little bit on my response or to the control to the committee is that this particular bill is the collective work of the disability advisory committee that the law people trustees form this made up of members trustees and employers they met over the twenty nineteen to twenty twenty years to craft a provision or several provisions that will hopefully corral the increasing numbers of disability retirements so we had members trustees employers come together and put together what we feel like is a much better provisions for lobbying for disability retirement still allow those who are truly disable to receive the benefit to which they're entitled but help people to perhaps maybe if they were gonna choose disability that that they would be able to action routine or re remaining employment to build stay in employment by putting more responsibility of the person to seek robust treatment for example with the help of you know mental type of disability or if they have an orthopedic type of disability could there be some other provisions or treatment that they could use to maybe go back to employment health employers with best practices with hiring and retention suburb of employees and roller show that the board is actually looking at the career benefits to make sure that we do not damage the career benefits for people because our costs continue to escalate for disabilities is there any attention. And I guess I shouldn't just put it that way but to what extent is there any tension between protecting the career benefit benefits are for everybody and the decision setting kind to to make sure the employee. behaved in a particular way. That is responsible I guess you said what's the downside four is what Saddam what is the perceived downside for an employee or is everybody happy here yes the the perceived downside could be and we work through those logistics by the way because we did have several meetings with employees of and we talk about this at the regional joint retirement metes back in the fall of nineteen as well is that people were concerned initially that there would be very little available and in the form of disability benefits when people understood that exactly what we have crafted here in this bill and then what the lobby Board will put together as far as the underlying criteria the staff shall follow to administer benefits in fact people who are genuinely disabled which there are a handful those every year that are used it's overly obvious of persons disabled is try to work on those ones are more questionable and address those cases so that we don't have of what we talk about as far as increasing numbers of disabilities let me give you an example is that over the last seventeen years lop because average thirty two disabilities that were approved for payment each year. Comparable systems that lobby was of measured against from around the country there were police and fire had in the single digits per year so you were were for you'll have far greater distance disability experience that are comparable systems so we feel that by bringing back in kind of putting in some of the borders on either side and having people this is that a moment ago accept responsibility and do the best they can to perhaps rehabilitate and remain ten employment or if they're not able to then if there is the disability isn't as severe as say a catastrophic which is something that would require of you know maybe intensive care round the clock care if a person has like a complete paralysis that would be catastrophic the person's clearly gonna be more reliant on that benefit in some of them might have a knee injury that could actually go to other types of employment and have another career so we're trying to balance the needs for people to rely on the benefits lot the versus the level of disability that they have. Okay and then my last question I think when you made these comparisons are to other our system of you did that. With the belief for at least the understanding this was a system where there was fairness and treatment for our for the employees yes so many pension ability you know will get around the country I want to be sure we were comparing to something that was not yes yes absolute right into the bottom absolutely and that's a big reason why the Lafayette board wanted to make sure that there was ample employee representation on the disability advisory committee so there could be plenty of input from the membership of the system okay thank you so much thank minister. Okay thank you senator represent of rye you're recognized for a question yes Sir thank you Mister chairman now with this bill would just go from thirty twenty eight years old no so that doesn't change that provision in just a you know a lot the already has twenty eight now as part of its provisions this is solely looking at what happens with a disability retirement. Okay follows. RT and follow okay now this is to help with sickness your and your six times of signatures of if someone you know Sir issued actually when a person is totally and permanently disabled so they no longer could perform the duties as a police officer or firefighter is solely looking at a very narrow group of people that can no longer perform their duties and they would exempt I was so that employment and begin receiving disability benefits based on some underlying condition okay and you have a fiscal impact on yes Sir it that should be part of our the Bill. Attachment. The committees of response was dated January twenty eight it's a two page on Osborn Carreiro letterhead. And then the retirement system's fiscal impact should be behind that I believe about sure what the order is of your documents. Yes there's a fiscal impact. On the back please do you know how much it is it's on the back to you Page Sir. Okay represented the the one thing that I think it's important when you're looking at the fiscal impact to as we expected there is going to be. More savings down the road as we kind of moved people's behaviors you know to try to not have to utilize disability as frequently as what's currently happening right now so you will have a improvement we believe in the unfunded accrued liability as we expect that down the road because it takes years for the for these changes to materialize is that we feel like that down the road is going to make you know a meaningful difference for the employers cost but then also make sure that the people that are needed to go with a disability retirement they actually have that benefit available for them for the rest of life. Okay Senator Ingram you're recognized. NO. All. A lot. Search all. Yesterdays Senator. Can you hit your queue again I don't think you're Mike was on and some people all right now let me. Business are we back in business are you say that again so others can hear the yes I'll be in the actuarial summary that we were given it says that LAPFI is allowed to create a surcharge for locations that have a high incidence of disability would you walk us through that absolutely yes or the that's in section one of the bill and what this will do is allow the lobby Board which left the board already sets employer contribution rates each year this will allow the board to add a disability lowered or surcharge if you will to the locations I have access disabilities the specifics of that load have not yet been worked out which is why we've asked for January one twenty twenty two effective date however the concept that has been discussed so far is that there would be initially of one percent rate added to an employer rate that has higher rates of disabilities than comparable departments from around the state. If there's a second incidence of disability then there would be another one percent and that would be the upper end and that rate would actually last either three or five years the understanding though is that regardless of the rate that's added that will never fully fund the true cost of the disability retirements because we we can't add that much cost to operate without having it be prohibitive for the employer so the idea with the lotus tried incentivize some employers because we have a handful the departments that utilize disability retirement quite often as compared to their peers around the state. And that would that be on a look back basis or go forward well it would be on a going forward basis once the criteria established because of will have to have time to communicate to the employers which employers already are aware that were part of the disability advisory committee and and they've communicated that I believe back to the Municipal League I talked a marchesa myself so he understands the concept but the idea is that we're going to be on a going forward basis because of that we're starting fresh with the data thank you thank you Mr. Thank you senator all right the okay Representative Richardson you are recognized for a question thank you Mr chair Ajit real quick did you have any conversation with any of the unions regarding the changes to this bill for question and we definitely did with both all with both police and fire unions actually talk with both of them had they were part of the disability advisory committee they had representations of what membership's there and then most recently met with the professional firefighters and had eight was a state statewide meeting held by as soon as you would expect but yes we've had lots of input from the members. Okay we have one person signed up in the audience to. Okay I'm sorry Senator hammer you're recognized for a question. Thank you Mr the. Talk through just real quick as far as the time frame under section six those hard after July first two thousand thirteen House act dealing that given the fact or deal with cancer that doesn't often show up till down the road how's that time frame a safe time frame to make sure everybody that might need this is going to be accounted for he per question in center that was actually a part of what was put into the disability provision for cancer back in twenty nineteen it was so we had a start point from which your people could be evaluated for presumptive cancer meaning that also the cancer it was assumed to be part of their employment as a firefighter or police officer so that was the start date the July one thirteen forward they had to have ten years of actual service credit because lobby moved to a ten year vesting period on that date. Okay and then on section ten. Somebody leaves employment could you just talk about section ten real quick as far as if somebody leaves being a firefighter but to go to another one yes Sir they they leave the possibility being covered under this well what this provision does is says that if you as a member go under disability retirement so therefore you're receiving a benefit from the system for disability that you are prohibited from seeking these types of employment in other words if you receive a benefit from lobby you cannot now go into these types of employment because they're very similar from what you're supposed to be disabled from. Okay so it it actually precludes them from being able to seek employment or let's say that they want to take employment for one of them they would forfeit their disability that's correct yes Sir yes and what we do so you know that's how it works right now it's just we wanted some more teeth into code which is what the disability advisor committee of the board was after says okay look the legislature concurs with what we're trying to achieve here. Okay and then the last thing is this you mention about departments and historically some have higher of disability history than others how much of that's related to the training that they get and I'd like to get a list of the departments see which ones have disability claims but you bet how much of that is related training or what's the calls of the. Of we we feel like that. The training aspect retention aspect by the way for on going is a factor which is the reason why the lobby bore the disability visor Committee assemble best practices that were then communicated to all the employers and that information is actually on the Lafayette website so it's it's available on a going forward basis but we feel like that that is a a factor is that if you don't have one you hiring you know the best qualified people in terms of health and then helping those people maintain a healthy lifestyle moving forward in helping them be physically fit that that can as per person ages your lead to a greater disabilities which is what we say orthopedic obviously is the largest category disabilities and lobby has which is to be expected under police of our professions is just if you don't have the best training and employees that what happens is that that can lead them to greater disabilities okay and does this cover volunteer firefighters released full timers and anybody that's in the office just to get anybody in the lobby system is is covered by these provisions here though the one thing is one of the catastrophic hazardous ordinary is that the calculations for the benefit are focused on paid service the the numbers of disabilities under volunteers is almost is not quite one a year but it's about one to two cases a year for volunteer service was very limited. Okay thank you thank Mr. I thank you senator we do have one person signed up in the audience to speak the. Toward this bill the cane here soon. You are recognized to come to the table and speak. If you would identify yourself in if you're with someone. When I came here some of I am a member of the system I'm a poor voter in the state of Arkansas thank you for your time thank you for giving me the opportunity to speak you're recognized. Thank you director Clarke A couple things I want to get on most of you have already mentioned I just want to bring to your attention that there is a whole board rule within Lotfi that deals with this it's another layer to this that you may not have in your pocket but you may not be aware of some of it is a little. Specific within this bill itself I'll start just for information on because I'm speaking or for or against this is just informational of section one part to the system where he could he the director for the board itself apply penalty to the cities themselves based on the number we don't have an answer for that yet because well you're giving in this bill a year or so for them to come up with those rules I think it's on practical for a a board to be given a law with no rules in place because the employee groups the employers themselves or the league do not know is that going to be a strict number. Or is that going to be a percentage of. I think there should be some time given I like the concept I understand the reasoning we've spent the past year two and continue on this year to help our systems be better funded to provide the same benefit I understand that it's a good direction there's just some clarity there that it's giving someone the a long period of time to develop rules that are already codified. The system did provide a list of best practices to the employers it's a excellent concept I think that needs to be driven home to our employers are cities through the league they're great concept it would really really help it provides things that these systems that we referenced earlier those compatible systems some of those are under funded. Okay some of those cities in those systems have better services they may have a mental health professional there's some board rules that I spoke about a minute ago that require the individual to seek treatment for X. amount of time before applying for that we agree with that. But that's not in here it's in the board rule. What could also be better for that is that there maintain that treatment. I understand that's more board will but to maintain that treatment if you are disabled from it to maintain that treatment often. I move on to I believe that this section six the other portion was I sat through every single one of these disability advisory committee meetings just as a viewer I'm not a I'm not on the border of a developer or anything of that nature but I also believe that the percentages there were tables that were discussed the head specific incidences in order to receive a certain percentage you had to lose all sight or but the of the mental health portion was in the fifteen percent bracket. and a lot of the people who have time on the job I understand that that can be treated okay or and but there's a breaking point for an individual I think there's some people that are in the process of either applying or speak not sure about seeking help that when they hear that mental health is going to the lesser side it kinda kinda hurts on and I'm afraid that the further we push the mental health issues to the to the lower end the more likely we're gonna get that that phone call about what's happened with the individual and that's concerning to me and I think it's concerned because some of the other people that if we continue with the best practices that they put out and drive that home to the employees and hold them accountable it would really less than this I thank you for your time a. And speak longer than three minutes. I think I have any questions misters okay. Senator okay. How are. Sure some would you entertain a question. My best. I am. Okay I'll. When you when you said that some of the Some of the system so which we have been compared are underfunding. How would you how would you then assess what's being proposed here against those systems that are under funding. so I'll use an example I believe don't quote me here that like use Dallas at one point okay as a comparable system so and I believe that's a whole nother bill. Of the deals with the ability of the system to recoup that underpin it basically be like a city didn't either park and I believe that's a whole nother bill and there's no. What I I agree with the ability for a system to recoup the unpaid portion from a city if they don't understand that it's just be responsible what will I get when you met you when you mention best practices those cities that are underfunding are they following best practices are not of I would imagine that some of those cities are not. Okay all right thank you. Any other questions Mr Harrison. Okay we thank you for your presence. All right the senator You. Would you like to close I am closed in motion proctor. Okay motion to pass all right we have a motion to we have a second. All right we have a motion the second any discussion. All those in favor say aye any opposed same sign. The motion passes. Thank you Mr Sir you're recognized to proceed with SP seven. Thank you Mr chairman it's three seven as a fire and police pension review board bill it's technical changes the changes are summarized as follows sections one two and three Amanda three areas of the local plan code concerning the agent for required distribution as a result of the federal sending Avery community up for retirement enhancement secure act is signed into law on December twenty nineteen the current listed for a general seventy one Hey FOR required used to distribution needs to be amended to seventy two that's a technical change section four contains emerged clothes with insurers sentence changes of SP seven or employment and without delay the effective date would be April one twenty. Twenty one. Okay questions. Okay do we have any questions for senator sample. Okay represented Richardson you're recognized thank you Mr chair so in in changing the the age did why why change HM seventy eight seven and a half to seventy two. David Clark again of with your B. it is this is a change in federal code so to comply with IRS regulations it's just simply moving age to seventy two it doesn't change anything as far as practical terms. Thank you thank you yes. The other questions. Sir shall would you like to close for a bill closed Christian good vote proper motion for up to. Okay that motion the motion do pass all right we have a motion. And I see a second. All right any discussion. All those in favor say aye. In the opposing side. The motion carries graduation Senator thank you thank members there being no further business to come before the committee we stand adjourned. Cindy.