Bentley proposes state pension changes

Gov. Robert Bentley

MONTGOMERY, Al.
Gov. Robert Bentley announced a plan Wednesday to overhaul Alabama's pension system for state employees, teachers and other public employees who are covered by the state retirement system.
It calls for setting a retirement age of 62 for most employees and 56 for law enforcement officers. Right now, employees can retire after a minimum of 25 years or service. There is no retirement age and some state employees who start working at an early age can retire early enough to start a second career and in some cases earn a second retirement.
Bentley said the change would not affect any current employees and would go into effect starting in 2013. He said the plan would save the state about $5.07 billion over 30 years.
The governor said the overhaul in the pension system was needed to "ensure the long-term solvency of Alabama's retirement system."
Legislative leaders said bills for the proposals are expected to be introduced Thursday in the House and Senate.
House Speaker Mike Hubbard of Auburn and Senate President Pro Tem Del Marsh of Anniston, both Republicans, stood with Bentley at Thursday's news conference and indicated they felt the proposal had a good chance of becoming law this session. It's being sponsored in the House by Reps. Mac McCutcheon, R-Capshaw, and Jamie Ison, R-Mobile. Sen. Arthur Orr, R-Decatur, is the Senate sponsor.
"Everyone understands that we have to get our fiscal house in order and pension reform is a big step in that direction," Ison said.
The CEO of the state retirement systems, David Bronner, called the changes proposed by Bentley "modest," but said they are needed to protect the pensions of state employees after the nation has gone through two wars and "the worst recession since the 1930s."
Bronner said by applying the changes only to new hires, the legislation will "uphold the promises made to one of Alabama's most valuable assets, our public employees and teachers."
The director of the Alabama State Employees Association, Mac McArthur, praised Bentley for coming up with a proposal that won't affect the pensions of current employees or retirees. He expressed some reservations that the proposal would in effect create two retirement systems, one for current employees and retirees and another for those who go to work for the state in the future.
He is also concerned about setting the retirement age so that employees can't retire as early as they can now, especially for workers in high-stress jobs like prison guards.
"It hurts young employees who want to make a career in state government," McArthur said.
The executive secretary of the Alabama Education Association, Henry Mabry, said he was pleased that the proposal would not affect current teachers or employees.
"No one currently serving in our public schools will see their benefits change," Mabry said. "It was important that the rules of the game were not changed on those who had made a commitment to our schools. We were adamant on that issue and received assurances by legislative leaders no changes would happen to current employees."
Because of changing the benefits, new employees would not pay as much for their pensions under Bentley's proposal. Currently state workers pay 7.5 percent of what they make toward their pensions. Under Bentley's proposal that would be reduced to 6 percent, said deputy state finance director Clinton Carter.