By Lesley Weidenbener
TheStatehouseFile.com

INDIANAPOLIS – A legislative commission recommended Monday that pension officials scrap a proposal to privatize one part of the state retirement benefit system but lawmakers didn’t address plans to cut the rate of return on annuity payments.

The Pension Management Oversight Commission can’t tell the administrators of public employee and teacher retirement accounts what to do. But the group did vote to ask them to keep the administration of annuities – which lets retired workers turn lump sum payouts into monthly benefit checks – in house.

The Indiana Public Retirement System Board of Trustees is likely to take up the recommendation at a meeting on Friday, said Jeff Hutson, a spokesman for the pensions agency.

“I think the board will take it very seriously. They’ll look at the recommendation,” Hutson said. “They’ll consider it, but I don’t know what they’ll do about it.”

The annuity is one of a two-part retirement system administered by the Public Employees’ Retirement Fund and Teachers’ Retirement Fund. The system includes a defined benefit plan, which is funded by government and schools for its employees, and a savings account that can be funded by employees or employers.

Upon retirement, the worker can take the savings account as a lump sum, roll it into a different retirement account, or convert it to an annuity to spread its benefits over the length of retirement.

Currently, retirees who opt to annuitize their savings can do so with a 7.5 percent interest rate, which is well above market rates and the amount the state is earning off the money that’s invested. The gap creates an unfunded liability that retirement board members decided was no longer acceptable.

So the group voted in July to use market rates for the annuities – and hire an outside vendor to establish the rates and administer the program.

That drew criticism from retirees and the groups that represent them and lawmakers spent hours last month taking testimony on the issue. The change is expected to reduce annuity payouts to future retirees by an average of $900 to $2,100 annually.

But Sen. Phil Boots, a Republican and the chairman of the Pension Management Oversight Commission, said the 7.5 percent interest rates “can’t be justified by actuarial tables.”

“The interest rates people are earning today aren’t anywhere close to market rates,” he said.

So the oversight commission opted not to recommend a specific interest rate. Instead, lawmakers zoomed in on the privatization issue.

“This is very, very important to thousands of people within these programs,” said Rep. David Niezgodski, D-South Bend.

“We’re just recommending this come in house,” he said. “It will be in the best interest of the members.”

Lesley Weidenbener is the executive editor of TheStatehouseFile.com, a news website powered by Franklin College journalism students.

Staff report
TheStatehouseFile.com

INDIANAPOLIS – Gov. Mike Pence has named members to a new panel he’s tasked with creating the state’s next transportation plan.

The group will review projects related to water, air, road and rail and develop a lits of priority projects for the next 10 years.

In the long term, the group will “explore and monitor innovations in transportation infrastructure to keep Indiana on the cutting edge,” the governor’s office said.

Pence has appointed a mix of public officials, transportation leaders and representatives of private firms to serve on the panel, which will be co-chaired by Lt. Gov. Sue Ellspermann and Cathy Langham, president of Langham Logistics.

The additional members are:

·         Mike Cline, Purdue University

·         Richard Conner, American Structurepoint

·         Mike Daigle, St. Joseph County Airport Authority

·         Mark DeFabis, Integrated Distribution Services, Inc.

·         Chip Edington, OSP Group

·         Dennis Faulkenberg, Appian Inc.

·         Andrew Fox, Chicago South Shore & South Bend Railroad

·         Mayor Karen Freeman-Wilson, Gary

·         Pete Georgeon, ArcelorMittal USA Flat Carbon

·         Mayor Tom Henry, Fort Wayne

·         Mark Holden, A&R Logistics

·         Scott Jones, ChaCha

·         Douglas Joset, Evansville-Vanderburgh Airport Authority District

·         Chris Matney, Indianapolis Airport Authority

·         Hank Menke, OFS Brands

·         Don Miller, Mount Vernon Barge Service

·         Bob Palmer, AGFS of FedEx

·         Don Sansone, Red Gold Inc.

·         JR Saylor, Brightpoint Inc.

·         Zack Scott, UPS-Ohio Valley District

·         Noah Sodrel, Sodrel Truck Lines Inc.

·         Mark St. Clair, Consolidated Grain & Barge Co.

·         Phil Terry, Monarch Beverage Company

·         Mayor Lloyd Winnecke, Evansville

(Washington, DC) – The Bureau of Labor Statistics jobs report released this morning, shows that the U.S. unemployment rate was at 7.2% in September, while the economy only added 148,000 jobs, lower than what economists expected.

Rep. Bucshon (IN-08) released the following statement:

 

“Today’s report is yet another reminder that middle class families are hurting in this stagnate economy.  Health care premiums are on the rise, full-time hours are being cut back to part-time, and industries, like the medical device industry, are paring back their operations because of the President’s unfair and unaffordable health care law. Reckless spending, like the failed stimulus, has caused our national debt to spiral out of control. And new regulations from the President’s EPA are waging a war on coal putting thousands of Hoosier jobs at risk.

 

“As a doctor, I came to Congress to change business as usual and fight for hard working Hoosiers.  Over the coming weeks, I look forward to working with my colleagues to fight the harmful impacts of ObamaCare, grow the economy, and protect Hoosier jobs.”

BACKGROUND:

4.1 million Americans have been unemployed for 6 months or more and while the total number unemployed is 11.3 million. (BLS; 10/22/2013)

Real unemployment, a measure that includes discouraged workers and those employed part-time who would rather work full-time, was 14.0% and the labor force participation rate was at 63.2%. (BLS; 10/22/2013)