Appropriates funds, out of the ERS's investment earnings, to the ERS to conduct a study for a formula to allow for automatic post retirement allowance increases. (SD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that the current method of providing post retirement allowance increases is grossly inadequate for countering the negative effects of inflation on pensions. The legislature further finds that proposals for changes to the current post retirement allowance increase calculation have met with resistance from the employees' retirement system, due to concerns over the increase in unfunded liability which will be created and the possibility of compromising the employees' retirement system's tax-exempt status. Therefore, the legislature determines that the employees' retirement system is the appropriate entity to explore and analyze viable options for new formulas for calculating increases to the post retirement allowance.

The purpose of this Act is to appropriate funds to the employees' retirement system to conduct a study of possible options for calculating increases to the post retirement allowance to provide more money to retirees, particularly those who have been retired for a greater number of years.

SECTION 2. There is appropriated out of the employees' retirement system's investment earnings the sum of $          , or so much thereof as may be necessary for fiscal year 2006-2007, for the employees' retirement system to conduct a study to provide post retirement allowance increases to members. The employees' retirement system shall provide to the legislature a report, no later than twenty days prior to the convening of the regular session of 2007, on its study to provide a new post retirement allowance increase calculation that is favorable to retirees, especially those who have been retired for a greater number of years.

SECTION 3. The sum appropriated shall be expended by the employees' retirement system for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2006.