New state employees will not only have half the current benefits of current employees, their wages will likely stay stagnant for years and they'll be assuming all the risk in the investment market.
And that'll be the good news if Wall Street melts down again in the next 10 years.
Several bills intended to deal with the state's $6.5 billion retirement shortfall and ensure it doesn't happen again will be made public next week by sponsor Sen. Dan Liljenquist, R-Bountiful.
Some of the state's 180,000 public employees have rallied against sweeping reform, saying the changes were too much too fast.
"Our position is, we need to slow down a bit and take a step back," said Audry Wood, executive director of the Utah Public Employees Association, an organization that represents most of the state public employees except teachers.
Wood advocates a long-term study group or task force to look at the problems for a system that rarely has had major changes in its 80-year history.
The UPEA and others will gather at the state Capitol building Saturday to make their point.
Liljenquist said he has supporters as well, and that Senate Republicans are behind the measures.
And time is of the essence, he argues.
"This is a disaster that has already happened. The cleanup is going to be extremely expensive for a long time," said Liljenquist, who has been tasked with retirement reform.
The 2008 market meltdown erased 30 percent of the state's defined benefit system. Even double-digit returns for 20 years would barely get the state back to even. That's because the state has no choice but to pay out benefits every year.
"To say you can grow out of this thing is being unrealistic," Liljenquist said.
The three bills appearing next week will do a number of things. First, double- dipping will be eliminated. A state audit shows that there is $900 million in savings if employees aren't allowed to retire from their jobs, start collecting benefits and get rehired.
"This is a retirement system, not a supplemental income system," Liljenquist said.
The 30-year cap on mandatory retirement for public safety is being raised to 35 years to help balance that out.
Second, new hires will be the most heavily affected by the reform efforts, though Liljenquist is loathe to phrase it that way.
"These are people we've never contracted with before who can't argue we've changed the game on them."
If you're hired after July 1, 2011, your benefits would be roughly half of what current employees make at about 8 percent contribution versus 16 percent. The 8 percent would also move away from a defined benefit system to one where the market risk is on the shoulders of the individual employee.
Liljenquist says risk never goes away and the choice is between letting individuals with more flexibility manage it, or letting the state keep doing what it's doing and face bankruptcy if things go south again.
The attractive benefits package has historically been used to offset lower government wages. Fewer benefits would ideally be offset by higher wages.
"We will certainly have to address compensation for new people," Liljenquist says. But actually doing that in the next five years or even longer will be tough as Utah hauls itself out of the economic mire.
Liljenquist says his bills are intended to keep the retirement system funded at 100 percent.
Standard-Examiner reporter Dan Weist contributed to this article.