Proposed reform could change state retirement system

Though thousands of public employees are against it, an effort to substantially change the state retirement system has momentum in both legislative houses.

Thousands of police, teachers and others demonstrated on the steps of the Capitol on Saturday, protesting changes to the multibillion-dollar system that provides benefits for more than 180,000 people.

The 2008 economic collapse stripped $6.5 billion from the pension fund, and some Republican lawmakers say only sweeping reform can fix the system so that the state isn't on the hook for an unbearable amount.

It appears the two bills tackling the problem will make it through the Senate even with opposition from Democrats. But the House, which has a wider variety of players, could prove problematic to reform seekers.

"I'm not a gambler," Rep. Brad Daw said when asked about the odds. The Orem Republican worked with other lawmakers on the retirement problem over the summer.

"I know there's going to be some push back."

The bill causing the most headaches -- Senate Bill 42 -- is off the table, said its sponsor, Dan Liljenquist, R-Bountiful. That would have extended retirement requirements to all existing employees.

Still on the table is removing the state's 1.5 percent contribution to a 401(k), a halving of benefits for new hires after 2011 and shifting the risk from the state to the employee.

A bill would also do away with the practice of double-dipping. That involves an employee retiring, drawing a pension and getting another job with the state a short time later. Some state employees can "retire in place."

Sen. John Greiner, R-Ogden and Ogden's chief of police, said there's likely to be grumbling from longtime officers on the latter two issues. The state encouraged double-dipping when it was looking for employees during the boom years, he said, only to turn around now and view it as a problem.

He also sees bumpy roads with lower benefits for new hires. The pitch is that they would see a corresponding increase in salary to compensate -- except that in turn could lead to problems from longtime officers who would be getting smaller paychecks than new officers, even though their benefits would be better.

"I don't think I can sell it," Greiner said.

House Majority Whip Brad Dee, R-Ogden, said he's been working with Liljenquist and supports the majority of the legislation. He said the rest just need a few tweaks.

Waiting, as suggested by public employees, won't work, he said. "That's ludicrous, if you understand how numbers work."

Gov. Gary Herbert is aware of the issue, though he hasn't taken a formal position. While he's interested in holding current employees harmless, spokeswoman Angie Welling said, he does recognize that some reform may be needed.

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