The Herald Bulletin

Morning Update

Local Politics

October 8, 2013

Changes to public pension benefits prompt pushback

Outside vendor to administer annuities savings plan

INDIANAPOLIS — The pre-retirement workshops offered to public school teachers and public employees around the state are rapidly increasing in attendance, as word gets out about potential reductions to their retirement benefits and some legislative pushback in response.

An official with the Indiana Public Retirement System, known as INPRS, said attendance at the September pre-retirement workshops — designed to help people budget for retirement — quadrupled over the normal month’s attendance, to more than 2,000 soon-to-be retirees concerned about the coming changes.

At issue is a July decision made by the Indiana Public Retirement System Board of Trustees to use a private vendor to administer the annuities savings plan that retiring public employees can use to turn lump sum payouts into monthly benefit checks.

In making that change, the board also voted to eliminate the current 7.5 percent interest rate the state has long guaranteed on those annuity payouts and switch over to market rates, which currently are at about 4 to 4.5 percent.

The change is expected to reduce annuity payouts to future retirees by $900 to $2,100 annually.

The change doesn’t go into effect until Oct. 1, 2014, but it’s already generating political heat. At the September meeting of the legislative Pension Management Oversight Commission, some lawmakers on the panel said they’ll push for state pension officials to back off privatizing the annuity savings plan, and continue to administer it with lower return rate.

“I think there’s agreement that we need to reset the interest rate so we won’t have a drain on our (pension) funds,” said Sen. Karen Tallian, a Democrat from Portage who sits on the commission. Where there’s strong disagreement, she said, is the plan to turn over the annuity savings plan to an outside vendor.

The pension board staff has argued that it doesn’t have expertise to set what would be continually changing market rates and that’s why the pension board wants to hire an outside agency to manage the annuities. In doing so, it would shift more risk away from the state and the pension funds it manages, which have about $27 billion in assets.

Text Only
Local Politics
  • NWS - HB0417 - election forum - 15 Candidates meet in Alexandria

    Several Madison County candidates running for a variety of offices met at Alexandria-Monroe High School Wednesday night to introduce themselves to voters and talk about some issues.

    April 17, 2014 2 Photos

  • Leaders await decision on Indiana Plan expansion

    Two of the state's top Republican lawmakers said Tuesday that they would like to see the federal government sign off on an expansion of Medicaid through the state's health care plan for low-income residents, but they added that they have little idea how soon that could happen.

    April 16, 2014

  • Commissioners vote to eliminate Personnel Board Madison County commissioners have decided to end the county’s Personnel Board.

    April 15, 2014

  • Primary voting starts at courthouse Through the first week of early voting for the May 6 primary, the Madison County Voter Registration office has been less than overwhelmed.

    April 15, 2014

  • Hayden, Maureen mug Maureen Hayden: Want better teacher ratings? Ask the kids The state may be back where it started, encumbered with a flawed teacher grading system, a year after implementing what were meant to be tough new standards.

    April 13, 2014 1 Photo

  • Ken de la Bastide: Local Dems want to change redistricting process There is an old saying that goes "to the victor goes the spoils." In politics the spoils usually involves the drawing of legislative districts for the Indiana General Assembly and the seats in the U.S. House.

    April 12, 2014

  • NWS - HB0409 - Cleanup - JC 3-file City of Anderson won't participate in annual cleanup For the first time in 29 years, there will be no citywide cleanup this year, because of expenses incurred by the City of Anderson this past winter.

    April 9, 2014 3 Photos

  • Local lawmakers bemoan no local road funding Despite efforts by three Madison County lawmakers, the Indiana General Assembly didn’t provide funding for the improvement of local roads.

    April 7, 2014

  • AP907524370424.jpg U.S. attorney battles public corruption

    U.S. Attorney Joe Hogsett has raised his profile by ramping up prosecutions of gang members and corrupt politicians, arguing that both undermine the public’s sense of safety, since he became top federal prosecutor in a district that covers two-thirds of the state.

    April 4, 2014 1 Photo

  • Sen. Coats ends up in wrong meeting School kids and business people who start with a new company often worry about showing up in the wrong classroom or meeting. It can happen to a veteran U.S. senator, too.

    April 4, 2014

Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide