Staff Analysis of the Legislation
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House Bill 815
Chair's Name: Ben Bridges
Committee: Retirement
House Sponsor: Carl Rogers
Chairman Bridges’ opinion of this legislation:
HB 815 permits the Board of Regents to set the employer contribution rate for the Optional Retirement Plan (this is a 401K type plan). The bill also expands the definition of employees that may choose to join ORP instead of TRS. Only persons hired after June 30, 2008 that are faculty or exempt employees will have the opportunity to elect to participate in ORP rather than TRS. TRS does not object to the bill. The first year cost is $121,000. Regents will be asking appropriations to transfer this amount of money from their FY 09 budget.
ORP needs to be allowed to set their own employer contribution rate. In current law, TRS set the employer rate and ORP is tied into that rate. The ORP plan is a defined contribution plan and TRS is a defined benefit plan so the decisions regarding employer contributions for TRS may not always be what is best for ORP. Opening up the option to join the ORP plan offers portability to potential employees.
This committee substitute comes to the House Floor under the Open Rule. |