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Workers, employers would pay more for retirement under bill
Feb 24, 2014 - By Katie Roenigk, Staff Writer
A bill making its way through the Wyoming Legislature would require an increase in retirement contributions for state employees and their ...
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A bill making its way through the Wyoming Legislature would require an increase in retirement contributions for state employees and their employers.
Wyoming would cover much of the change, however.
"We're optimistic the designated appropriation that comes with the bill as it's currently proposed will be sufficient to cover most, if not all, of the increased obligation on the part of the college -- for not only the employer contribution but the employer funding a portion of the employee contribution," said Jennifer Rey, executive director for human resources at Central Wyoming College.
Regardless, she said the required employee contribution to the state retirement fund will go up over time.
"(Employees) will be asked to pay more, which is a good thing," she said. "But keeping our employees whole from a net pay perspective continues to be a significant challenge."
Since September 2013, employers have contributed 7.12 percent to retirement accounts, with 7.5 percent coming from employees. Employers actually covered 5.82 percent of the employee contribution, though, giving a total of 12.94 percent to the retirement account compared to 1.68 percent from workers.
As proposed in HB46, the employer will be responsible for 7.62 percent of the contribution effective July 2014, with 8.25 percent coming from the employee. The employer will cover 6.2 percent of the employee contribution, however, giving a total of 13.8 percent to the retirement account compared to 2.1 percent from employees.
Rey said the change represents a $113,000 impact at CWC, but HB46 provides for up to $780,000 in state appropriations for community college employee contributions to be funded by the employer.
"It is anticipated that, if the bill passes, there will be adequate state appropriations to fund most, if not all, of the anticipated increase in employer paid contributions, minimizing the overall impact on the college's budget," Rey wrote in a memo to the CWC Board of Trustees.
"We're fortunate to be able to receive funding from the state to cover a portion of the employee contribution."
The numbers are set to change in July 2015, when employers will be responsible for an 8.4 percent contribution to the state retirement account compared to 8.25 percent from employees. Again, the employer would cover 6.2 percent of the employee contribution, paying 14.6 percent compared to 2.1 percent from employees.
After 2015, the percentage required from employees and employers stays the same, but employers will cover less and less of the employee portion. By 2017 employees will be contributing 2.68 percent to their retirement accounts, if HB46 passes.
Rey said the bill adds to legislation that passed last year making changes to the required retirement contribution rate.
She thinks legislators will continue to reconsider the numbers in the future.
"I suspect this will become an annual tinkering with the employee-employer contribution," Rey told the board.
HB46 was received for introduction in the Wyoming House Feb. 10. It was sent to the House Appropriations Committee Feb. 11.
State Rep. Dave Miller, R-Riverton, was the only local legislator to vote against the move.
The bill was placed on general file in the House Feb. 12, and it passed the committee of the whole Feb. 13. It passed the House on second reading Feb. 14 and third reading Feb. 17. Miller and Rep. Patrick Goggles, D-Ethete, voted "nay."
The legislation was received for introduction in the Wyoming Senate on Feb. 17, and it was referred to the Senate Appropriations Committee on Feb. 19.
Sen. Eli Bebout, R-Riverton, said earlier that he is opposed to the idea that the state should cover all of its employees' retirement contributions, as it has in the past.
"I think employees should pick up half (of their own contribution)," Bebout said. "We've got some really good, hardworking people in our state, and retirement is very important.
"But we're trying to make (the retirement account) actuarially sound."
Sen. Cale Case, R-Lander, agreed that the retirement account was underfunded previously. He said the account should be built up before a large group of employees retires in the near future.
The increase in employee contribution will help make up the deficit.
"The state is putting in more too, (but) we're trying to have a small amount be picked up by employees," he said. "It's important for employees to have a little contribution, too."
He added that the highest employee contribution rate through HB46 - 2.68 percent in 2017 - is still small compared to the rate required by other government entities and private employers.
He plans to vote for the bill when it comes up in the Senate.
"The contribution from employees will be modest," Case said. "I think the idea of making retirement sound is good, and I'm OK with increasing employee percents a little."