From Molly: Damon on SB 190 enhancements for retirees

From Molly Janczyk, 1/25/06

Damon's answers are directly below. The questions are further down and I added YES or NO according to his responses.

THANK YOU, DAMON: I appreciate this very direct answer to help us understand SB190 and its enhancements for retirees. Like many, I was unaware of any except my own scenario retiring in '99.

From: "Asbury, Damon"To: "molly janczyk" Subject: RE: Damon Date: Wed, 25 Jan 2006 16:58:48 -0500

Molly, I'll try to answer as you request, but I will need to elaborate on a couple. : )

1. Yes

2. Yes

3. Yes

4. Yes, it was a permanent increase to their monthly benefits, but it does not adjust the 85% purchasing power for future inflation. The COLA is supposed to adjust for that.

5. No. Retirees in 1999 and later received the 2.2% formula and were eligible for the 35 year benefit, if they qualified. Those who retired earlier ((in '88 and before)) received the adjustment in their formula to
2.1% and the 85% formula adjustment if applicable. Those who retired between July 1989 through June 1999 were already receiving the 2.1% formula. If they had
31 or more years, they also received the formula enhancement of 2.5 for the 31st year, 2.6 for the 32nd year, etc. until the person reaches 100% of final average salary.

6. Yes. The ad hoc increase provided by SB 190 was also added to the retiree's base benefit on which future 3% COLA adjustments are based.

Damon

From: molly janczyk [mailto:mollyjanczyk@hotmail.com] Sent: Tuesday, January 24, 2006 1:44 PM To: Asbury, Damon Subject: Damon

You were at STRS for SB190: I need the specific answers in really plain English: ANSWER: YES OR NO

1. Did SB190 bring ALL older retirees up to the 2.1 % formula? whether they retired in 1960 or regardless of when they retired: ANSWER: YES

2. Were some retirees receiving less that the 2.1% prior to SB190? ANSWER: YES

3. If raising them did not meet the 85% rule of bringing them to 85% of their original purchasing power, did SB190 then pay the additional to bring them up to the 85% rule? ANSWER: YES

4. WAS THIS INCREASE OVER 2.1% TO BRING THEM TO THE 85% RULE A PERMANENT PART OF THEIR MONTLY PENSION? ANSWER: YES , the increase was based on 85% purchasing >power at year 2000 ; not beyond; COLA is for that.

5. I thought that only retirees retiring in '99 or later were affected: ANSWER: NO! All retirees not already receiving 2.1% benefitted: Retirees with 31 or more years also rec'd the enhancements for that service: SEE NUMBER 5 explanation above from Damon.

6. THESE ENHANCEMENTS OF SB190 for retirees are seperate from the COLA increase to 3%. ANSWER: YES