Honorable Vicki Truitt, Chair, House Committee on Pensions & Investments
John S. O'Brien, Director, Legislative Budget Board
HB1371 by Delisi (Relating to a salary supplement for certain retirement-eligible classroom teachers.), As Introduced
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GENERAL REVENUE FUND
Beginning with the 2007-08 school year, the bill would entitle active teachers whose age plus years of service exceeds 80 to salary supplements ranging from $1,000 to $4,000 per year. The amount of the supplement increases as the sum of an eligible teacher's age and years of service increases up to at least 95.
The bill would entitle school districts to state funds sufficient to pay the cost of the salary supplements.
The state cost of funding for school districts associated with salary supplements to which approximately 24,623 classroom teachers would be entitled under the provisions of the bill is estimated at $50 million annually in General Revenue beginning in fiscal year 2008. Assuming a 6.0 percent state contribution rate, additional state contributions to the TRS retirement fund associated with the provisions of the bill is estimated at $3 million annually in General Revenue.
The Teacher Retirement System (TRS) estimates that the provisions of the bill would reduce the state contribution rate required to achieve a 30-year funding period by 0.10 percentage points based on the February 28, 2007 valuation and assuming the active member contribution rate remains at 6.40 percent. This estimate assumes that 20 percent of classroom teachers would defer their retirement by one year based on the provisions of the bill.
323 Teacher Retirement System, 701 Central Education Agency
JOB, KJG, UP, JSc