Legislators Mull Pensions

ATLANTA – Retired state employees could see smaller cost-of- living increases in their pensions as administrators of the program look for ways to address the plan’s growing costs.

The 33,000 retirees drawing benefits from the Employees’ Retirement System of Georgia had seen annual cost-of-living increases of 3 percent in recent years.

This year, the program’s pension board approved a 2 percent increase, with part of it not taking effect until January.

An additional 70,000 working for the state and enrolled in the retirement system could eventually be hit with the same issue.

The annual adjustments, intended to keep up with inflation, could remain under scrutiny as more baby boomer workers retire from the state and the retirees start being paid more in benefits than the pension program earns in money contributed from current workers.

“I support cost-of-living adjustments for retirees,” said Mike Nehf, the executive director of the Employees’ Retirement System pension program. “The law even says that we’ve got a responsibility to do that … but it is always subject to the financial situation of the retirement system. We have a balancing act.”

Mr. Nehf spoke Tuesday with a panel made up of House and Senate Retirement Committee members.

He warned the lawmakers that it will cost more and more to maintain the annual 3 percent increases for the growing pool of retired workers.

Though a 3 percent adjustment costs the system $250 million today, that increase will cost the Employees’ Retirement System double that amount in the coming decades.

Not all the legislators were convinced that scaling back the adjustment was the best suggestion to close the gap.

“I’ve got a real problem taking that many employees that have been loyal to this state for 25, 30 years … and saying it’s not working correctly now,” said Rep. John Meadows, R-Calhoun. “We’ve had a problem for 20 years.”

Originally published by Vicky Eckenrode Morris News Service.

(c) 2007 Augusta Chronicle, The. Provided by ProQuest Information and Learning. All rights Reserved.