FORT SMITH (KFSM) --Teachers, police officers and some other Arkansas state and county workers could soon see some changes to their retirement plans.
The board that governs APERS, or The Arkansas Public Employees Retirement System, will put four proposed changes before lawmakers.
Only those who are a part of APERS will see the changes if approved.
One change in the proposal will be to increase an employees contribution rate. It would go from 5% to 6% over a four year period.
"The legislature and the board correctly thought it might be useful to have our members contribute more not only to shore up more but to give them more skin in the game, so to speak," said Deputy Director of APERS, Jay Wills.
"The first Bill raises the percent of salary that APERS members pay in contributions from 5% to 6% in .25% increments over the four years following its July 1, 2020, effective date. Both Highway and Teachers members contribute over 5% now. The purpose of this Bill is to get more money into the fund by way of contributions in an effort to begin reducing APERS’s unfunded liability. Employers of APERS members will be contributing 15.32% after July 1 on behalf of their employees."
Wills said the second plan relates to the interest on member contributions.
"The Interest on Member Contributions Bill reduces the interest APERS pays on monies it holds from 4% to 2%, which is simply good Plan design," he said.
"You can’t get 4% on your cash from any financial institution of which I’m aware these days. This will principally affect those who withdraw their contributions and exit the APERS system. APERS pays interest on those monies that it has held. The Final Average Compensation (FAC) Bill simply returns the calculation of an employee’s final average salary to cover a five year average, which it was several years ago, rather than the three-year average that it is now. It will only affect those who are hired on or after July 1, 2020. This also is intended to be a step in the direction of insuring APERS’s future financial integrity."
The last proposal touches on the benefit multiplier.
"The Benefit Multiplier Bill changes the multiplier that is applied to a retiring employee’s service and salary credit to determine the amount of their annual benefit. It presently is 2% for contributory employees and will be reduced to 1.8% on July 1, 2020, for all new employees," Wills said.
Wills acknowledged many people resist the changes and have questions.
"Pick up the phone and call me. Call APERS and say, 'where's Jay'? I am the only Jay they got around here. I talk to everybody that calls me," he said.
Sebastian County Sheriff Hobe Runion spoke about the proposed changes to pensions.
"Within the last 20 years, we have lost one-third of our retirement. There are several senate and house bills up right now that would reduce our retirement once again," he said.
"When legislators support something like this it feels like a slap in the face for the men and women in public service. I've been talking to my legislators and I think a lot of people who work in the public realm are talking because it is a severe reduction for people, who in a lot of cases are underpaid."