Joint Budget Committee authorizes staff to draft combined PERA proposal to delay automatic adjustment provision

Sam Rickman, JBC staff, presented an official request from PERA that would change how a $225 million annual direct distribution is allocated and would reduce the Health Care Trust Fund (HCTF) contribution rate. The two changes together — or either alone in specific configurations — are intended to delay PERA's projected automatic adjustment provision (AAP) and, according to actuaries presented to the committee, could lower long‑term employer and employee contributions.

Rickman described three approaches: (1) allow PERA discretion to allocate the $225 million direct distribution rather than allocate by prior-year payroll; (2) reduce the HCTF contribution from 1.02% of reported salaries to 0.52%; or (3) a combined package of both measures. "If both of these proposals are adopted and enacted, it will delay that AAP from 2034 until 2044," Rickman said, and the actuary projects roughly $2.15 billion in avoided employee and employer contribution increases over the long term.

Representative Brown signaled support; Representative Taggart and other members asked staff to confirm whether the changes conflict with existing statutes governing the funds and whether benefit levels would be affected. Rickman said staff would follow up with statutory checks and noted that PERA representatives said delay of an AAP would benefit all PERA divisions.

Senator Mobley moved to authorize staff to draft the combined proposal (proposal 3); the committee voted 6–0 to authorize drafting.

Committee members instructed staff to ensure statutory compatibility and be ready to explain distributional effects across PERA divisions during subsequent hearings.