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House | March 31, 2015 | Committee Room | Pensions and Retirement

Full MP3 Audio File

I would like to go ahead and call this meeting of the Pension Retirement Committee to order. First a little bit of housekeeping. I'll like to recognize our pages[sp?] this morning, we have Caroline [xx] from vast county Caroline, and we've [xx] [xx] and he is from Wade county sponsored [xx] if I look like I'm eating this microphone this morning it because I've been told we have a mic problem and have to lean in to it. Our sergeant of arms this morning Billy moore[sp?] [xx] [xx] and David [xx] I will have two bills on the calendar First bill of this house 264 represented McNeill.    Thank you for the opportunity to present the house bill 264 to the pensions retirement committee. House bill 264 basically does one thing, it allows the Community College Board of Trustees for certain members which are listed in the bill of the community college to take a salary reduction to put that salary reduced amount into a 403 B plan. Which is basically annuity contracts, or trust accounts and or custodial accounts. I think there was a bill last year that allowed the teachers to do this, there's a fiscal note attached and you see there is no fiscal impact on doing this to all funding with the salary reductions. The Community Colleges are in favor of this, the Treasury Department I've discussed with them and they have no problem with it and unless there's any questions especially if they're technical, I will refer them to staff is basically a simple bill to allow them to take a reduction to put in a 403 B Retirement Account. Any questions? for a motion. Representative Brown, motion. I move for a favorable report of House Bill 64 with serial referral to Appropriations. Representative Brown has moved for a favorable report with referral to was Appropriations, all those in favor signify by saying Aye, "Aye" Any opposition? Over here Why does it have to go to Appropriations? That's actually a good question. I've had that discussion with the community college people it shouldn't. I plan to ask Representative Lewis today if he would like to refer [xx] before objections unless it can be done at a committee level, I'm not sure about this. There's really nothing to appropriate, that's a good question. All right, next bill up is House Bill 274. Retirement Technical corrections and this is Representative Gill. We have a PCS before us, can I have a motion to accept the PCS? So moved. I can do that. [xx] You were so.   [xx] I'm sorry. [xx] Sorry about that. All right, House Bill 274, Retirement Technical 2015, Representative Gill, would you like to present the bill?  We have a PCS.  I'm sorry, there's a PCS, I need a motion on PCS, alright, Representative Brown. All those in favor of the PCS signify by saying I. Any opposition? Alright, the PCS is now before us Thank you Mr. Chairman, this is a Bill that was requested by the department of state treasury for the real estate retirement system it has no significance cost to the state or an actuarial impact on the retirement system. This bill does 6 things first, there's a money clarification change to the definition of employee and the teachers and state employee retirement system that's consistent with the state long practice a

requiem that a person has to be involved in this system as an employee for 30 more hours per week for nine or more months per year. The second change, they're two minor corrections to the recently amended laws to address some oversights, one deals with disability offset date it was changed in 2013 and this bill makes this same change to the statute and this was overlooked when the policy was made a change in 2013. The RS, a 415 excess benefit compliance policy was also established in 2013 and the treasurer's office want to change the date that assets are  transferred between accounts to align with the federal tax year instead of the State Fiscal year in order to simplify administration of that it repeals an investment statute that has not been utilized since 1979 and is no longer needed because the investments are governed under new law and this is in Section 4. It conforms to two state statutes to federal law, it conforms two state statutes to federal law. It aligns the 2014 changes made to the State Policy on disposition of settlement funds with the federal law on exclusive benefits, and that you can see in Section 5. It conforms a Service Purchase Statute and  the Teacher and State Employees Retirement System to federal law related to the treatment of active duty military services. The Retirement System has handled these cases correctly under the federal law, but the State statute has not been changed to reflect uniformed services employment and re-employment right path. That's as simple as this is, this is [xx] of bill is there any questions I have someone from the treasury department to answer them, if I can't answer it. Representative Blum. This change in section 1 to at least 30 was [xx] profit that was some getting away wit some 30 hours a week? I can call on this to Wart. Sam Wart with traders office, it's simply a clarification of a long in time practice, there was a court case in 1997 that considered it a provision of inclusion rather that the exclusion and it has just never been tightened up after the court pointed out that discrepancy between the statute and the practice General Assembly had fund the retirement system based on the assumption that it's full time employees which is 30 hours a week, nine months a year because employees and teacher, and the legislature never changed the funding structure after the court ruled in 97, so we took that as instruction to not change the practice, and this goes back and we discovered that a slight discrepancy in this statute missing that language when we did reveal the policies after the past year. Representative Neil Approximately having [xx] with [xx] It doesn't change anything that we're doing, this is where we handle the all the employees at the moment. Representative Blust? Why is it 30 and not something even higher, no congress [xx] has I think restored the 40 hour work with some sort of Act, why did we pick 30? Because we have teachers and state employees in the same retirement system we need the definition to apply to everyone equally. Other questions? Representative Michelle [xx] favorable motion. We have a motion by representative Michelle, give the PCS favorable

report unfavorable to the original, all those in favor Alright, any opposition? Alright, the Bill passes. Thank you that concludes our business.