House Committee on Finance (02/23/2012)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	02/23/2012	ATTENDANCE

Time:	09:46 AM to 01:13 PM	Acree	X
		Beezley	X
Place:	LSB A	Conti	X
		Hullinghorst	X
This Meeting was called to order by		Joshi	X
	Representative DelGrosso	Kagan	X
		Kefalas	X
This Report was prepared by		Labuda	X
	Ron Kirk	McCann	X
		Pabon	X
		Swalm	X
		Swerdfeger	X
		DelGrosso	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB12-1250 HB12-1150 HB12-1179		Postponed Indefinitely Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only

09:47 AM -- House Bill 12-1250 - Concerning PERA Health Care Contributions

Representative Holbert, prime sponsor, explained that House Bill 12-1250 modifies the manner in which health care premium subsidy benefits are paid for and provided to members of the Public Employees' Retirement Association (PERA). He continued by noting that under current law, 1.02 percent of the employer contribution to PERA is allocated to the PERA Health Care or DPS Health Care Trust Fund. Representative Holbert continued by saying that as of January 1, 2013, this bill specifies that these funds will consist of only the portion of employer contributions necessary to fund premium subsidies paid on behalf of members enrolled in the PERACare health care program.

Representative Holbert continued saying that he has heard concerns by constituents and given a number of issues, asked the committee to postpone House Bill 12-1250 indefinitely. The committee took the following action.


BILL:	HB12-1250
TIME:	09:53:07 AM
MOVED:	Swalm
MOTION:	Moved to postpone House Bill 12-1250 indefinitely. The motion passed on a vote of 13-0.
SECONDED:	Swerdfeger
		VOTE
	Acree	Yes
	Beezley	Yes
	Conti	Yes
	Hullinghorst	Yes
	Joshi	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	McCann	Yes
	Pabon	Yes
	Swalm	Yes
	Swerdfeger	Yes
	DelGrosso	Yes

Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

10:01 AM -- House Bill 12-1150 - Concerning PERA's Highest Average Salary Calculation

Representative Priola, prime sponsor, explained that House Bill 12-1150 changes the manner in which the benefit amount payable to most members in the Public Employees' Retirement Association (PERA) is calculated. He noted that for members who are not eligible for retirement as of January 1, 2013, benefits will be calculated using seven periods of the member's highest average salary (HAS) rather than three. Representative Priola noted that the bill applies to all members, except those in the Judicial division who did not transfer from the Denver Public Schools (DPS) division.

The committee discussed the fiscal note and the policy changes under House Bill 12-1150 as they apply to PERA retirees. Representative Priola continued by discussing PERA's pension investments.

The following persons testified:

10:35 AM -- Mr. Meredith Williams, Executive Director for PERA, testified in opposition of the bill. Mr. Williams began by discussing the current three-year salary calculation for retirees under current law for purposes of calculating pension benefits under PERA. He noted that this bill will affect about 165,000 people in the PERA system and may have some constitutional concerns. He closed by saying that legislation in 2010 took a comprehensive approach and any new legislation should be incremental.

The committee continued a discussion on PERA's benefit calculation using the three highest years' salary and the potential issues that may be attributed to changing to a seven-year highest average salary calculation. Mr. Williams closed by discussing some of the changes resulting from the passage of Senate Bill 10-001.

11:19 AM -- Mr. John MacPherson, representing the Colorado Coalition for Retirement Security, testified in opposition of the bill. Mr. MacPherson discussed the proposed changes under Senate Bill 10-001 and discussed the anti-spiking provisions that affect salary increases for purposes of calculating pension benefits.

11:25 AM -- Mr. Randy Novotny, Association of Colorado State Patrol Professionals, testified in opposition of the bill.

11:31 AM -- Mr. Charles Olmsted, testified in opposition of the bill. He closed by discussing the potential impacts of changing the three-year highest average calculation to a seven-year calculation.

11:34 AM -- Mr. Bruce Chittenden, representing himself, testified in opposition of the bill. He noted that the bill would reduce his pension benefits.

After a brief committee discussion, Representative DelGrosso, Chair, laid over House Bill 12-1150 to Thursday, March 1, 2012.

11:52 AM -- House Bill 12-1179 - Concerning the PERA Board of Trustees

Representative Kerr J., prime sponsor, explained that House Bill 12-1179 modifies the makeup of the 15-member voting board of trustees of the Public Employees' Retirement Association (PERA). It allows current trustees to finish their terms and reduces the number of trustees who represent retirees and each of the divisions as their terms expire.

The committee discussed the current composition of the PERA Board. Representative Kerr noted that the bill will result in a changed board that will have a new perspective on the PERA pension system. The discussion continued on the composition of the PERA Board and their performance over the past years.

The discussion shifted to the merits of a defined contribution plan and a defined benefit plan for pension retirees.

The following persons testified:

12:19 PM -- Ms. Carole Wright, representing Colorado PERA, testified in opposition of the bill. Ms. Wright noted that the PERA Board has been in place for 80 years and talked about the qualifications of board members. She noted that many members have significant public and private sector experience. Ms. Wright closed by discussing some of the strategies that the board uses to manage PERA pension funds.

12:38 PM -- Mr. Meredith Williams, Executive Director for PERA, testified in opposition of the bill. Mr. Williams briefly discussed some of the investment strategies in terms of managing PERA pension funds.

12:42 PM -- Mr. John MacPherson, representing the Colorado Coalition for Retirement Security, testified in opposition of the bill.

01:00 PM -- Ms. Eileen Bond, representing the Colorado Senior Lobby, testified in opposition of the bill.

01:04 PM -- Mr. Mark Trostel, representing himself, testified in opposition of the bill.

01:11 PM

After a brief committee discussion, Representative DelGrosso, Chair, laid over House Bill 12-1150 to Thursday, March 1, 2012.

01:13 PM

The committee adjourned.