State representatives are taking a pair of buyout proposals under consideration after a hearing Monday in Springfield.
One state representative said his measure to allow state retirees to have their pensions bought out adds an extra benefit they don’t currently have -- passing a piece of their retirement income on to their children.
Republican Representative Mark Batinick presented his proposed pension buyout measure to a House committee Monday where he said giving options to accept a lump sum payout for pensions will help alleviate the unfunded liability, which is $113 billion and growing.
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Batinick also said it gives pensioners a different benefit they currently don’t have.
“This gives the annuitants the ability to put some money away,” Batinick said, “it could be a portion of it, it allows them to put something away and have a willable asset for the next generation.”
Batinick also said his proposal allows for a partial buyout so retirees can, quote, “split the baby,” or take some money immediately and some in reduced pension payments.
A measure from Republican Representative Mike Fortner would have Central Management Services layout criteria for a vendor to come in and buyout pensions for individual retirees. The payouts would then go individual retirement accounts.
Democratic Representative Robert Martwick asked for some sort of safeguard to keep individuals from losing their retirement benefits to bad investments.
Representing the Teachers’ Retirement System, Andrew Bodewes said regardless of what plan is chosen, there should be time for implementation.
“If you want a product in a month, you’re going to get a lousy product,” Bodewes said. “If you want a product over a longer period of time -- the more time, the better the product.”
Representatives from other state retirement funds said they expect there to be a lot of questions from plan participants and want to ensure there’s plenty of education as the ideas are discussed.
No action was taken Monday, and the bills remain in committee for further discussion.