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House | June 30, 2016 | Chamber | Pensions and Retirement

Full MP3 Audio File

First thing this morning a couple of introductions, we have some pages with us this morning. If you would when I call your name if you would stand, we've got Mary Kate Abner, Bailey Jordan, Hope Harrington and Addison Butler. [BLANK_AUDIO] >> Well, in addition our sergeant at arms this morning, Marker Gardison, are you here? Barry Moore, Jonas Jerry, and Bill Riley. All right we have a PCS before us this morning on Senate Bill 886 I need a motion for the PCS, alright have a motion for the PCS all is favor >> Aye. >> All right. The only bill we have on the calendar this morning at Senate Bill 886 and I'm going to call a colleague up, Representative McNeil to present the bill. [BLANK_AUDIO] >> Thank you Mr. Chairman and committee members. We get right in to 886 section 1 amend North Carolina firefighters and rescue squad workers pension fund providing survivor-ship benefits for a member killed in the line of duty. Section 1 provides that if killed in the line of duty has the same meaning as the law enforcement officers fireman's rescue squad workers and several eye patrols members Death Benefits Act, it outlines the manner in which the benefits are paid to a beneficiary when a member is killed in the line of duty, is a man the law pertaining to an order of payments when a fire fighter worker dies but is not killed in the line of duty, provides a two year transition period prior to section 1B which allows the member's spouse to receive benefits. It applies to benefits paid when a member is killed in the line of duty on or after June 1, 2016. Same, but before July 1st 2018. Becomes effective July 1st 2018 and applies to benefits paid when a member is killed in the line of duty. Section two, Public Records Statute for retirement. It creates new consolidated statutes to find and hold public records. Relate to retirement records. Currently the Retirement System Division relies on nine different statutes of governing groups of public employees, and three separate opinions from the Department of Justice to respond to requests of public information regarding all members of retirement systems. This provision would consolidate the laws and apply to retirement records and to these retirement statutes. Provisions does not make any affirmation in this current public into private information or vice versa. Section three, section three allows certain forms to be transmitted electronically to the teachers and state employees retirement system. teachers and members of the local government retirement system demands the statute the members and teachers and members restrictively to respond within a 120 days of transmission form 60 and 78 to them. Under current law the forms must be mailed to members. This change basically allows electronic transmission. Section four this allows letters of credit issued by the Federal home loan bank to be used to collateralize deposits by amending GS 14779. According to the According to the retirement systems division, banking staff had discovered that this change is necessary to avoid re-collateralization of 1.8 billion in funds in the state banking system and was requested by the state banking system staff. Section Five, requires the board of trustees, local [COUGH] government, employees retirement system to develop a state contribution right Stabilization policy for the fire fighters and rescue squad workers pension fund. This policy will be similar in concept, to policies the board adopted in January for the state and local pension plans. Those policies were adopted in recognition of the criticism that current low interest rates and volatile investments may Incentivized public pension plans to take on more excessive risks. Section 6 amends the membership of teachers and elders board of

trustees and requires the annual evaluation to include additional information. It amends the board of trustees by adding The Director of the Office of State Human Resources as an ex-official member and, removes a representative of higher education. Provides that the state treasurer appoints a director and a retirement system. Clarifies that the treasurers and ex-official chair and appoints a director. Section seven is purchasing clarification for supplemental retirement plan and this is more of a technical correction than anything. It makes the legal name of the supplemental retirement board of trustees consistent across all programs, administered by the board and clarifies that the 403 be Uses the same procurement procedures as the board uses for the 401K and the 457 plans. Section Eight reduce unnecessary paperwork administrative efficiency allows retirement systems to require that statement of income forms to be submitted By disability recipients only when the information in the form would be important or useful, or when the members income has changed. This change provides an administrative efficiency but not requiring submission of forms that have little purpose. And in section nine is just a severability clause. And that is the Bill. [BLANK_AUDIO] Thank you Representative McNeal for that detailed description. All right I'm gonna open it now for questions Representative [UNKNOWN]. >> Yeah I've got the board, section four of the re-colateralization of 1.8 billion What has been the experience with that before? Why do we have to count all the letter credit from [INAUDIBLE] that's where I was getting at. >> Representative Mitchell I'm gonna refer that to staff. [BLANK_AUDIO] Represented from the treasurers office. >> Sam Watch from the Treasurers Office, thanks for asking Representative [UNKNOWN]. There was a Federal Law change 10 years or so ago that allowed us to use Federal long letters of Credit for colateralization of deposits. There was an assumption that the state law conforming change was made about a decade ago when we were doing a review of the statutes late last year we realized that change had not been made in the state law Which triggered us to request this and then meanwhile we audited all of the funds in the state banking system and we actually discovered 2.8 billion but about a billion of it has already been recollaterazied/g since the discovery of deficiency in the state law. The remaining 1.8 billion would be a pretty significant share for some small banks in Durham and Asheville, and Lenoir and Charlotte. Because they would have to remove the deposits or seek Additional ways to collateralize those deposits which could be quite expensive for them. >> Yeah, that was the reason I raised it because I knew there was some small banks that had problems and they were [INAUDIBLE] so this straightens that matter. >> Yes, sir. This is a term critical Issued. >> Other questions from the committee? Alright I think I have one person that had requested to speak from the firefighters group. [BLANK_AUDIO] Identify yourself. [BLANK_AUDIO] >> Thank you Mr. Chair, I'm Tim Bradley Executive director of the North Carolina State Firemen's association, we've come in support of Senate Bill 886. The current law allows a firefighter who is disabled in line of duty to proceed their [INAUDIBLE] benefits when they Reach age 55 and we recognized late last year that someone killed in line of duty simply forfeited their time and their survivor received their benefits back so just wanted to thank you for considering this bill and let you know that we support it, thanks. >> Thank you. Anyone else? Other questions? Representative Waddell? >> For a motion Mr. Chairman. >> No other questions? All right. I think it's time.

>> I move that we give PCS a favorable report unfavorable to the original as referred to the floor. >> All right we have A motion for a favorable for Senate PCS 886. All those in favor signify by saying aye. >> Aye. >> Any opposition? All right. It passes. Thank you. [SOUND] We're adjourned. [BLANK_AUDIO]