Bipartisan efforts in House seek to protect state retiree benefits from private sector

INDIANAPOLIS – State Rep. Chuck Moseley (D-Portage) led Indiana House members this week in passing legislation that helps protect pension benefits for numerous public employees and teachers from the risks of private sector control.

By an 83-16 margin that included strong support from Republicans and Democrats alike, representatives passed House Bill 1075, legislation co-authored by Moseley that tells the Indiana Public Retirement System’s (IPRS) board of trustees that it cannot use third party vendors to oversee annuities available to employees who work for state and local units of government and schools.

“This margin should make it clear that the House feels that the state needs to be in control of the retirement benefits, rather than having those matters pushed off to a private party that is more interested in collecting profits for itself than protecting the futures of thousands of people across Indiana,” Moseley said.

“I hope it also serves as a warning to the people who serve on the IPRS board that they must be accountable and responsible for their actions,” he added.

State retirees are on a system that contains two parts: a defined benefit plan that is funded by the government and schools for its workers and a savings account that can be funded by employees or employers.

When a worker retires, he or she can cash out the savings account in a lump sum, roll it into a different retirement account, or convert it into an annuity that pays out benefits over a number of years.

At present, the annuity carries a 7.5-percent interest rate, which IPRS board members felt was too high. Their solution was to transfer administration of the annuities over to a third party, which would set an interest rate for the accounts.

“The involvement of a private entity in the affairs of public employees was upsetting to many of us, and those feelings were aggravated by the attitude of IPRS board members, who appeared to believe that they could do what they wanted and they didn’t really care what anyone else felt,” Moseley said.

The board maintained that attitude, even after being told by Moseley and other members of the Pension Management Oversight Commission (PMOC) that they preferred state control over all aspects of the retirement system.

“They continued to be belligerent, which led the legislators on PMOC to proceed with House Bill 1075, which was authored by State Rep. Woody Burton (R-Whiteland),” Moseley said. “It is my hope that this spirit of bipartisanship on behalf of so many dedicated state workers will continue as this matter proceeds through the Indiana Senate in the weeks to come.”