The stage is now being set for the next substantial discussion about what Wyoming’s public retirement system might look like in coming years.
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In December, the Joint Interim Appropriations Committee will meet again to consider whether more changes are needed to the state’s retirement system. While state officials and some lawmakers are still working out what information will be most useful for that discussion, the changes put in place earlier this year are going into effect. Among them are increasing the retirement age from 60 to 65, increasing the contributions that employees are responsible for in some plans, and changing how benefits are calculated for new employees.
During the 2012 legislative session, lawmakers declined to convert the defined benefit pension system into a defined contribution system – like a 401(k) program, in which enrollees invest retirement funds under their own direction – for all new employees during the 2012 session. That bill’s sponsor, Rep. Bryan Pedersen, said he doesn’t believe that will be an option in the coming year.
“I am not running again, so I won’t bring it again,” Pedersen said. And he doesn’t think any other lawmaker will, either. While he had the support of a number of other lawmakers in sponsoring the bill, it didn’t come forward as a committee bill of the
Appropriations Committee. The proposal also was an unpopular option among the members of the Public Employees Association, he added.
Pedersen is a member of the Joint Interim Appropriations Committee until the end of this year when his term is up, so he will get a chance to weigh in?on the proposals that may be presented at that time. While he doesn’t want to see Wyoming face the same pension challenges as other states like Wisconsin, or even Illinois, whose credit rating was downgraded in part because of its weak pension funding levels, he’s also not sure a solution will be crafted soon. “I think it’s going to be a series of Band-Aids, and the can will get kicked further down the road.”
While the Wyoming retirement system is not at a crisis point, lawmakers and others are concerned enough to try to avoid similar problems here. These changes started for several reasons, but mainly they are the result of a downturn in investment returns following the stock market drop in 2008; that meant a drop in income for the retirement system. That downturn hit just after the state approved significant pay raises to teachers and other school personnel – the largest population of employees in the plan – and awarded COLAs (cost of living adjustments) to some retirees. At the same time, the state’s population is aging, meaning that the number of retirees and those who are on the verge of retiring is increasing.
At the end of July, Thom Williams, the director of the Wyoming State Retirement System, delivered an update to the Joint Interim Appropriations Committee, including the progress on the changes that lawmakers made to the program.
For the December discussion, the co-chairs of the Appropriations Committee are expected to hold a conference call with officials from the State Retirement System to devise the list of reports and information that will be most useful for committee members to review.
NOTE: The Wyoming Coalition for a Healthy Retirement System held several town hall meetings across the state in November to discuss what changes were made to the state’s pension system earlier this year and what is being discussed for the future. Members of the Wyoming Retirement System – current and retired employees – and the public are invited to ask questions or voice concerns to the group. For more information, call 307-472-5939.