Utah Legislature: Pension changes pass first hurdle

SALT LAKE CITY — A package of bills reshaping the state retirement system in light of a $6.5 billion shortfall passed its first hurdle in the Senate on Thursday, but not before some of the most intense debate this session.

The three bills, sponsored by Sen. Dan Liljenquist, R-Bountiful, all won preliminary approval. A final vote in the Senate is expected today.

"We are basically, for a very long time, cleaning up what happened in 2008," he said, a reference to the massive hit the Utah Retirement System took in that year's economic collapse.

He warned that the state is in danger of not being able to meet its pension obligations to current employees unless the retirement system is changed to reduce the state's obligations in the future.

Representatives of state and local workers, schoolteachers, police officers, firefighters and others covered under the system have been pushing for the changes to be delayed.

Thursday, several Democratic senators, along with Republican Sen. Jon Greiner, also questioned whether such drastic action is needed now.

"Why are we trying to rush through the most significant event to our employees," said Greiner, the Ogden police chief who retired and then was rehired.

He was especially concerned about SB43, the bill that would prevent retirees rehired by the government from collecting both a pension and a paycheck, a practice known as "double-dipping."

Liljenquist pointed to a legislative audit released late last year that showed "double-dipping" could cost the state nearly $900 million over a decade. "It's costing us far more than expected," he said, money the state can't afford on top of the shortfall.

Senators voted 20-8 to move the bill forward. Greiner, who by avoiding an earlier committee vote had allowed the bills to be passed out to the full Senate, joined Democrats in opposing SB43.

Greiner also wondered whether the state could make up the shortfall by banking on big investment returns, noting the system that serves state and local government employees earned some 13 percent last year.

Liljenquist said it would take $400 million a year for 25 years — double the state's current retirement contribution — to cover the shortfall if benefits aren't reduced. Even larger-than-anticipated returns wouldn't be enough, he said.