Utah Legislature: State retirement bills pass House committee

SALT LAKE CITY — A pair of bills overhauling the state retirement system to help compensate for a $6.5 billion loss passed a House committee Wednesday.

Both SB43, which deals with retirees who are rehired after July 1, 2010, and SB63, which slashes pension benefits for new employees hired after July 1, 2011, now go to the full House.

The sponsor of the bills, Sen. Dan Liljenquist, R-Bountiful, said the 2008 economic crisis is forcing the changes to protect the benefits of current employees and retirees.

But the three Democrats on the House Retirement Committee raised concerns about the impact of creating a new system offering fewer benefits and voted against the bills.

"Are we creating a whole new sector of poor people?" asked Rep. Christine Watkins, D-Price. "This could be just such a huge financial problem for people."

Rep. Neal Hansen, D-Ogden, failed in his attempt to table SB63 after calling the disparity between the two systems "almost like putting two different sizes of tires on the same car."

SB63 cuts the state contribution to retirement in half and increases the number of years employees need to work to earn the maximum retirement benefits.

Liljenquist supported an amendment to SB43 from Rep. Stephen Sandstrom, R-Orem, to allow retirees who return to work after a year or more to continue collecting their pensions along with their paychecks, instead of having to suspend their pensions.

The bill had originally ended the practice known as "double-dipping," in light of a legislative audit that had warned that letting rehired retirees collect both a pension and a paycheck could cost the state $900 million over a decade.

Liljenquist said the change accommodates retirees who find themselves in the position of having to go back to work but ends what he called the "sweetheart deal" that gives workers an incentive to retire early and come back.

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