For immediate release:
April 15, 2015
INDIANAPOLIS - Legislation co-authored by State Rep. David Niezgodski (D-South Bend) that aims to solve the longstanding problem of unfunded liabilities within pension funds is one step closer to becoming law.
Members of the Indiana Senate today passed House Bill 1466, which will direct an employer who has withdrawn from the Public Employees’ Retirement Fund (PERF) to pay their share of the unfunded liability. Since the bill was amended in the Senate, members of the House must decide if it will concur with the changes. If the House chooses to dissent, the legislation will be sent to conference committee.
“Over the last few years, some entities in Indiana have begun withdrawing from PERF and setting up their own investment funds,” Niezgodski explained.
“When a group of employees leaves PERF’s established fund, the entire investment dollar pool shrinks. Since it’s unfair for the burden of increased liabilities to fall on the shoulders of the remaining PERF members, an unfunded liability is created.
“Requiring entities to financially settle any unfunded liabilities allows the PERF fund to remain whole. If left unsettled, the unfunded liabilities issue could persist for a long time and become a very deep-seeded concern,” he added.
Niezgodski was joined on HB 1466 by State Reps. Dan Forestal (D-Indianapolis), Martin Carbaugh (R-Fort Wayne), and Woody Burton (R-Whiteland).
[Rep. Niezgodski explains the provisions of HB 1466 in this 25-second mp3 clip.]