To close the current state-run school pension system to new employees hired after Sept. 30, 2017, who would instead get employer contributions to defined contribution 401k retirement savings accounts, or a lifetime annuity, which unlike the current pension system would come with a cap on the state's liability for benefits. The bill would also establish more rule-based funding requirements for the existing defined benefit systems. Inadequate annual contributions are reportedly responsible for the system’s unfunded liabilities having grown to $29.1 billion in 2016.   Official Text and Analysis.

With the recommendation that the substitute (S-1) be adopted and that the bill then pass.

To make a provision that would gradually raise the starting age to collect benefits as life expectancies increase, to make it prospective only, applying just to employees hired starting in Feb. 2018.

To delete a provision that would gradually raise the starting age to collect benefits (age 60) as life expectancies increase.

To delete a provision that would gradually raise the starting age to collect benefits (age 60) as life expectancies increase.

To require the state to perform an actuarial analysis of the status quo system that justifies replacing it with the one this bill would create.

To strip out a $5 million appropriation included in the bill that would make it "referendum-proof".

To require charter schools to contribute to the cost of paying down the school pension system's $29.1 billion in unfunded liabilities, even though their employees get no benefits from the pension system.

To require any additional spending that happens because of this bill to come out of general tax revenue, rather than revenue earmarked to the state School Aid Fund.

To replace the current school pension system with one that requires more cost-sharing by new employees, and contains provisions intended to limit state management practices responsible for the $29.1 billion of unfunded liabilities in the status quo system. New employees could choose instead to receive substantial employer contributions to 401(k) accounts (4 percent of salary automatically, and an employer-match of up to 3 percent more). If the overhauled defined benefit component is not properly funded then employees who enrolled in it would have to pay half the cost of correcting this. If underfunding exceeds specified levels it would be closed to new hires.

To authorize additional employer 401k contributions for certain employees.

To revise details of the proposed allocation of unfunded liabilities the system may accrue.

To revise details of the provision closing the system if it accrues more than a certain level of unfunded liabilities.

To concur with the Senate-passed version of the bill, which is identical to the version the House voted on the previous week (House Bill 4647).