DEPARTMENT
OF
AUDITS
AND
ACCOUNTS
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
270 Washington Street, S.W., Suite 1-156
Atlanta, Georgia 30334-8400
Russell W.
Hinton
State Auditor
(404) 656-2174
State Auditor
(404) 656-2174
March
28, 2008
The Honorable Ben Bridges,
ChairmanHouse Retirement
Committee
State Capitol, Room 402
Atlanta, Georgia 30334
State Capitol, Room 402
Atlanta, Georgia 30334
SUBJECT: State
Auditor’s
Certification
Substitute to SB 328 (LC 21 9929S)
Substitute to SB 328 (LC 21 9929S)
Dear Chairman
Bridges:
This
bill would create the “Georgia State Employees’ Pension and Savings
Plan” and would affect persons who first or again become members of the
Employees’ Retirement System on or after January 1, 2009. Under the
provisions of this substitute bill, such members would initially receive a
retirement allowance equal to 1 percent of their highest average monthly
compensation during a period of 24 consecutive calendar months multiplied by the
member’s years of creditable service. This substitute bill would
authorize the board of trustees to set future retirement allowances up to 2
percent, provided such allowance is in direct relation to any increased
appropriations by the General Assembly expressly for such increase. Benefits
paid to persons who are already members on December 31, 2008 would continue to
be calculated based on 2 percent of their compensation.
This bill also provides for an additional benefit through optional participation in a deferred compensation plan offered by the State for public employees. Members covered by this proposed plan could also receive up to 3% contribution from the State, provided the employee contributes 5% of his or her compensation into the plan. Members would be authorized to make contributions greater than 5%. Members who participate in this plan would be vested at a rate of 20% per year, and be fully vested after five years of service.
This bill also provides for an additional benefit through optional participation in a deferred compensation plan offered by the State for public employees. Members covered by this proposed plan could also receive up to 3% contribution from the State, provided the employee contributes 5% of his or her compensation into the plan. Members would be authorized to make contributions greater than 5%. Members who participate in this plan would be vested at a rate of 20% per year, and be fully vested after five years of service.
Additionally,
this bill includes provisions to allow existing members to elect participation
in this proposed plan. Members who make this election would have their
retirement benefits computed on a prorated basis. Furthermore, this substitute
bill includes provisions relating to disability benefits for persons covered
under the “Georgia State Employees’ Pension and Savings Fund”
and specifies that members covered by this proposed plan would not be entitled
to group term life insurance coverage under the Employees’ Retirement
System.
Furthermore,
this bill revises provisions relating to the State Employees’ Assurance
Department. Specifically, this provision would specify that no moneys in either
the retired and vested inactive members trust fund or the active members fund
which include assets relating to group term life insurance shall be transferred
or be expended for any purpose other than the prepayment of benefits and
expenses necessary for maintaining survivors benefit coverage prior to July 1,
2009, without express legislative enactment.
This bill also adds provisions
relating to creditable service under the Georgia Judicial Retirement System.
Specifically, this bill would allow any superior court judge or district
attorney who is a member of the System to obtain up to five years of creditable
service for past service as a circuit-paid assistant district attorney, provided
such member was not eligible to participate in a local retirement plan. Under
the provisions of this substitute bill, members wishing to obtain such
creditable service would be required to pay the full actuarial cost of such
service and would be required to provide the necessary proof of eligible
service. Payments must be made to the Board of Trustees by December 31, 2008 or
within six months of first or again becoming a member of the System, whichever
is later.
This
is to certify that the changes made in this substitute bill are nonfiscal
amendments as defined in the Public Retirement Systems Standards Law. It should
be noted that the actuarial investigation and State Auditor’s Summary for
Senate Bill 328 (LC 21 9867S) would apply to the provisions of this bill that
relate to the Employees’ Retirement System. The retirement certification
for House Bill 545 (LC 21 9801S) and the actuarial investigation and State
Auditor’s Summary for House Bill 545 (LC 21 9269) would apply to the
provisions of this bill that relate to the Judicial Retirement System. Copies
of these documents are
attached.
Respectfully,
/s/ Russell W.
Hinton
State Auditor
State Auditor
RWH/cs