Lawmakers block professors’ pension swap

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Georgia legislators have rejected an attempt by University System professors to pull their money out of a recession-battered retirement plan and buy into the financially sounder Teachers Retirement System (TRS).

Bills were introduced in the House (HB 593) and Senate (SB 287) that would have allowed the faculty members to pull off this swap of pension plans, but both measures were overwhelmingly rejected during a joint meeting Wednesday of the House and Senate Retirement Committees.

Lawmakers were not just opposed to the idea of allowing the professors to join the TRS, they were clearly angered that the faculty members had even made the request.

“Why are we doing this for these people?” snapped Sen. Fran Millar (R-Dunwoody). “Why are we singling them out?”

“It’s a little bit offensive to me, personally,” said Sen. Charlie Bethel (R-Dalton). “They made a choice – you make it and then you live with it.”

This particular pension issue dates back to the early 1990s, when some University System faculty requested that they be allowed to leave TRS and set up their own self-directed investment plan to take full advantage of the stock market boom of that decade. Legislation was subsequently adopted that set up a Regents’ retirement plan for this purpose.

In recent years, however, the professors’ portfolios have been battered by the stock market crash and subsequent economic downturn of 2008-09. They are now requesting legislation that would enable them to revoke their earlier decision and return to TRS.

Rep. Howard Maxwell (R-Dallas), chairman of the House Retirement Committee, said about 12,000 faculty members opted for the Regents’ retirement plan, while 32,000 have remained in TRS. He said the average salary of these professors is $135,000.

The House version of the pension swap bill, HB 593, was sponsored by Hank Huckaby, who recently resigned from the Legislature in anticipation of his appointment as the new chancellor of the University System.

Huckaby made the pitch for passage of his bill at the retirement committee meeting but got nowhere with the measure. Sen. Frank Ginn (R-Danielsville), the author of SB 293, also was unable to get his bill out of committee.

“The University System doesn’t want to lose these people,” Ginn said. “It’s a way to keep them in Georgia.”

If they stay in Georgia, it will be under their current pension plan.

Retirement committee members were more receptive to other pension bills on Wednesday’s agenda, voting to authorize actuarial studies of these measures.

The bills that moved forward include:

HB 542 – Introduced by Rep. Jay Powell (R-Camilla), this would allow an assistant district attorney who was a State Court judge for eight years to transfer his pension credit from the Judicial Retirement System (JRS) to the Employees Retirement System (ERS). The bill would presumably apply to Mike Bankston, chief assistant district attorney for the South Georgia Judicial Circuit.

HB 533 – Allows juvenile court judges to transfer from the ERS to the JRS.

HB 635 – Authorizes the Macon Water Authority to establish a new retirement plan for employees hired after July 1, 2012.

HB 337 – Allows sheriffs to revoke spousal survivor benefits in the event of a divorce.

HB 424 – Establishes a $5,000 death benefit for retired Superior Court clerks.

HB 250 – Allows JRS members to change their mind about providing for spousal benefits.

SB 286 and HB 236 – Would prevent county tax commissioners from double-dipping by drawing pension benefits from both the ERS and their local county retirement plan.

SB 246 and HB 473 – Would increase the employee contributions and the retirement benefits for non-teaching school employees such as bus drivers and cafeteria workers.

© 2011 by The Georgia Report

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Tags: ERS , faculty , House Retirement Committee , JRS , pension , Senate Retirement Committee , TRS , University System