HB 1296

CHANGES IN RETIREMENT ALLOWANCE Present law provides that as of the end of each calendar year, the difference between the end of each calendar year commencing with t he year ending December 31, 1972, the difference between the percentage representing the consumer price index as of the end of such calendar year divided by that index as of December 31, 1971, or the most recent December 31 subsequent thereto as of which a n increase or decrease in retirement allowance must have been granted pursuant to th e present law provisions of retirement and 100% must be determined. Further, if such percentage is at least equal to 1%, the retirement allowance payable to each beneficia ry in receipt of an allowance prior to the July 1 next following must be increased or decreased, as the case may be, commencing on such July 1, by an amount determined by multiplying the retirement allowance that would have been payable without regard to t his law by such percentage, but not to exceed 3%. If the percentage increase or decrease in the consumer price index determined in accordance with t he previous provisions is less than 1%, an increase or decrease in retirement allowance must not be granted. Present law additionally provides that effective July 1, 1998, if there is a percentage increase in the consumer price index, as determined in accordance with the provisions above , of at least 0.5%, the retirement allowance payable to each beneficiary in receipt of an allowance prior to the July 1 next following must be increased commencing on such July 1 by an amount determined by multiplying the beneficiary's then current retirement allowance by such percentage, but not to exceed 3%. I f such percenta ge is 0.5% or more but less than 1%, the percentage must be rounded to one percent 1%. This adjustment must be in lieu of the adjustments provided for in the paragraph above . If the percentage increase in the consumer price index is less than 0.5%, a ret irement allowance increase must not be granted . EFFECT OF OVER COLLECTIONS This bill provides that effective July 1, 2025, if, in any fiscal year, there are over-collections and there is a percentage increase in the consumer price index, as determined i n accordance with the retirement provisions of present law , of at lea st 0.5%, then in lieu of the adjustments provided in the above provisions, the retirement allowance payable to each beneficiary in receipt of an allowance prior to the July 1 next followi ng must be increased commencing on such July 1 by an amount determined by multiplying the beneficiary's then-current retirement allowance by such percentage. I f the percentage is 0.5% or more but less than 1%, the percentage must be rounded to one percent 1%. This bill provides that if the percentage increase in the consumer price index is less than 0.5%, then a retirement allowance increase is not granted pursuant to this bill. On or before November 1, 2025, and on or before each subsequent November 1, the commissioner of finance and administration must determine the amount of over-collections, if any, during the prior fiscal year. The commissioner must report this determination to the board of trustees ("the board"") . If over-collections are reported, then the board must implement the increase pursuant to this bill. RESOLUTION REQUIRED This bill does not apply to individuals who are members of the retirement system by virtue of their employment with any employer participating in the retirement system unless the governing body of any such employer passes a resolution to accept the associated liability and costs to provide such benefits. This increase in benefits becomes effective following the adoption of the res o lution. Retroactive benefits must not be paid under this bill."