A new retirement system being contemplated by the Tennessee legislature would require new state employees and school teachers to potentially work more years. And their guaranteed money would be cut by roughly a third.
State Treasurer David Lillard says change is necessary because any new hires are adding to the state pension’s unfunded deficit. His plan would move to what’s known as a hybrid pension system, which has been adopted in states like Georgia and Virginia. It shifts more of the responsibility of saving for retirement to individuals in an effort to decrease the state’s exposure to volatility in the stock market.
However, the new retirement plan would include some guaranteed money, which Lillard says is important.
“We do believe that in order to get an employee a much better opportunity to have a truly sufficient benefit, you need a floor, basically,” says the Tennessee Treasurer.
The traditional state pension would begin to be phased out under a plan to be presented to Tennessee lawmakers Monday. In recent decades, the rap on state jobs is that the pay may be less than the private sector, but the benefits are good – especially the retirement plan.
Lester Hines took a job in the state codes department seven years ago. “It was good deal for me," he says. "I was almost 50 years old and didn’t have a pension."
Tennessee’s state pension system is less generous than some states. It’s also more financially sound. But those who manage it say the system is unsustainable.
If a proposal from the state treasurer gets approval in the legislature, the state would be more involved in helping workers save for retirement rather than promising a set amount.
Lawmakers in Tennessee are watching Florida closely after the state’s conservative Republican governor went along with a major piece of the Affordable Care Act. Governor Bill Haslam is still on the fence about expanding the state’s Medicaid program – known as TennCare.
For the first three years, the federal government would pay the entire cost of insuring thousands of new TennCare recipients.
In Florida, Governor Rick Scott said he could not “in good conscience, deny the uninsured access to care.” Tennessee Senate Speaker Ron Ramsey says having such a conservative leading the way could provide “cover” to lawmakers. But Governor Haslam would still have to sell an expansion, Ramsey says.
A bill to create an authorizing body for charter schools in Tennessee has been delayed. The sponsor now says he’s listening to critics, who say the legislation unfairly singles out Nashville and Memphis.
As written, the bill would give charter schools a way to open in Tennessee’s two largest urban areas without asking the school board – officially known as the local education authority or LEA.
Rep. Mark White is the sponsor and says he could be on-board with a true statewide charter authorizer if local school boards do the initial vetting.
“If we go back to the LEAs – letting them have first input on this – this will be a statewide application,” said Rep. White.
There is confusion among the sponsors of so-called ‘Guns-in-Trunks’ legislation in Tennessee. They disagree on whether employers could fire a worker for keeping a gun in their car at the company parking lot, even though it could soon be legal.
During a hearing in the House, Rep. Jeremy Faison said he believed a business owner could still terminate someone storing a weapon in a vehicle.
The legislation doesn’t specifically address the issue, but Senate Speaker Ron Ramsey says he believes gun-carrying employees will be safe from their bosses.
“I feel confident that if they fired someone and they said that was the reason, that employer would be in for a lawsuit and he would lose," says Ramsey.