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2001

NCTR reports to its members about EGATRRA implementation, the Social Security Reform Commission's expected report, the increase in PSOB benefits, concerns about the suspension of the 30-year T-Bond, the interaction between the IRC and early retirement and severance programs offered by school districts, the upcoming Savers Summit, and NCTR participation in an anti-economic terrorism commission.

Portability Survey NCTR surveyed the portability between state teacher retirement systems and city teacher retirement systems. The states represented in the survey are Colorado, Illinois, Minnesota, Missouri, Nebraska, and New York. All of these states have both a state teachers retirement system and one or more city teacher retirement systems. The survey provides both specific and general guidance. In the area of specific guidance, it informs teachers in the affected states about the manner in which their pensions are portable if they have taught in both the state and the city teachers retirement system. In the area of general guidance, the survey illustrates various types of portability. In addition to the foregoing, the survey contains detailed information about NCTR’s past activity in the portability issue.

USERRA (Uniformed Services Employment and Reemployment Rights Act) You may have members in your retirement system who are reservists and who have been called up for active duty to fight the war against terrorism. Those individuals have certain re-employment rights under the federal law known as USERRA when they return to their jobs. The Veterans' Employment and Training Services of the U.S. Department of Labor administers USERRA. If you have questions, click here for more information.

EGATRRA Info. We are consolidating our information about the pension provisions in H.R. 1836, the Economic Growth and Tax Reconciliation Relief Act of 2001 (EGATRRA). The President signed the Act into law on June 7, 2001 (Public Law 107-16). The information is divided into two categories: Text and Legislative History and Implementation.
Text and Legislative History- Click here for a summary of the public plan provisions.

Implementation-We will keep you informed of guidance issued by the U.S. Department of Treasury and the IRS on EGATRRA implementation. IRS issued Notices 2001-56 and -57 on September 17, 2001 regarding certain effective dates and plan amendments, respectively. You should share them with your legal advisor. Click here for the IRS notices (2001-56 and 57). We will also let you know of NCTR's requests for guidance. It joined with other organizations in seeking guidance in Using 403(b)/457 funds to purchase service credit . NCTR recently joined with other organizations in seeking guidance about the new authority for plan participants to transfer money from their 403(b)/457 plans to purchase service credit in their defined benefit plan. The groups asked the U.S. Department of the Treasury for 1) guidance on uniform requirements and maximum time limits in which the 403(b)/457 plan administrator must transfer the money; and 2) confirmation that all assets held in a participant's 403(b)/457 plan including those from a rollover of a different plan type can be transferred to a defined benefit plan for the purchase of service credit. The link takes you to a copy of that letter.
IRS and other tax developments: Click here for Carol Calhoun's presentation at the convention. She recently updated it to include new developments

Fallen Hero Survivor Benefit Fairness Act: President Bush signed this bill into law June 5 (Public Law 107-15). It extends the treatment of survivor annuities for public safety officers killed in the line of duty on or before December 31, 1996. The Taxpayer Relief Act of 1997 provided that a survivor annuity paid on account of the death of a public safety officer who is killed in the line of duty is excluded from income for individuals dying after December 31, 1996. Thus, survivors of officers killed in the line of duty before that time are fully taxed on their annuities. The Act excludes from income the annuities of survivors of officers who died on or before December 31, 1996, but only for amounts received in taxable years beginning after December 31, 2001. "Public safety officers" are defined to include law enforcement officers, firefighters, or members of rescue squads or ambulance crews.

Gramm Leach Bliley-Attention, Retirement Administrators, Have you received requests from your plan participants to "opt out" of certain disclosures under the Gramm Leach Bliley Act? The Act allows banks, securities firms, insurance companies, and other financial service providers to affiliate. It also overhauls the legal rules that govern how financial institutions share information with non-affiliated third parties. Click here for a memo by Mary Beth Braitman and Tom Walsh of Ice Miller Law Firm explaining retirement systems' duties and responsibilities under the Act to their plan participants. It concludes that the Act does not apply so as to require a retirement system to comply with the "opt out" provisions. Share this opinion with your legal advisor.

NCTR and NASRA join in support of markets. NCTR and NASRA have developed a joint resolution related to the tragedy of September 11. Read the resolution here.

Did you know that the U.S. Census Bureau publishes surveys about state and local government employee retirement systems? The Bureau reports on such issues as the amount of system assets (both cumulatively and by asset class) and the number of systems. According to The 2000 State and Local Government Employee Retirement Systems Survey, the investment holdings of the systems reached an all-time high of $2.2 trillion in 2000. This level is $263 billion higher than in 1999. The states with the fewest number of retirement systems were Hawaii and Maine; each have only one that serves all state and local government employees. Illinois had the most with 377 and Pennsylvania was the runner-up with 360. Click here for more information.

Social Security Reform Panel Named; NCTR Position on SS Issues. Click here for more information. NCTR has updated its analysis of how Social Security reform could affect states, localities, their employees, and their retirement systems. Click here for that analysis.

Summary of efforts to pass EGATRRA, with photos!

Attention Non-SS NCTR Members! Sens. George Voinovich (R-OH) and Diane Feinstein (D-CA) have sent a letter with a bipartisan group of nine other Senators to President Bush urging him to oppose mandatory coverage. The co-signers are Sens. Fitzgerald (R-IL), Landrieu (D-LA), Kennedy (D-MA), Boxer (D-CA), Durbin (D-IL), Allard (R-CO), Ensign (R-NV), Reid (D-NV), and DeWine (R-OH). The letter provides an excellent historical perspective on why some state and local government employees are not covered by SS. It also points out mandatory coverage's the small advantage for the federal government and its huge disadvantage for affected states, localities, and employees. Click here to see the letter.

NCTR to Closely Monitor Retiree Health Care
The NCTR Legislative Committee decided that the organization should more intensively monitor retiree health care legislation before Congress. The decision was affected by a survey on the subject done by Washington Counsel. The survey showed that one-third of statewide NCTR members administer a retiree health care plan. Click for the summary and the complete results of the survey.

NCTR Legislative Committee Recommends Resolution On Return to Work/Phased Retirement
During its January meeting, the NCTR Legislative Committee recommended that the resolution be adopted. After review by the Executive Committee, this has now been referred to the Resolutions Committee. The Wisconsin Transitional Retirement Study studies this issue. Although specific for Wisconsin, it is of interest to many systems.

Tax Cut Bill with Pension Package Passes House and Senate; The White House is planning a signing ceremony on Thursday, June 7
Unless you were visiting an exotic locale over Memorial Day weekend, you have no doubt heard that the House and Senate passed H.R. 1836, the tax cut bill, on Saturday, May 26. The bill includes the pension package on which we have all labored.
Meanwhile, I will be assembling the pertinent bill text and legislative history in both electronic and paper form for your use. The materials should be available soon.In the meantime, if you wish to see the bill text, explanation, or summary, click here.
It is at times like these that I feel so fortunate to be able to work with you all. You showed your strong support for the effort through your calls and letters to your Congressional delegations. This advocacy was critical in demonstrating the broad support for the pension package. Thank you so much. Cynthia Moore

Attention, Non-Social Security Retirement Systems
Help Senator George Voinovich (R-OH) gather cosigners for his letter to the President opposing mandatory Social Security coverage. Please view the letters then call/write your Senators and ask them to co-sign.

Outlook for 2001

Another NCTR Publication! "Implications of Social Security Reform for State and Local Governments, Their Employees, and Their Retirement Systems"
It appears that the Bush Administration and Congress will tackle SS reform later this year. Thus, state and local governments, their employees, and their retirement systems will need to consider how reform will affect them. A useful guide on the subject has been recently released by the General Accounting Office (GAO). (Social Security Reform: Implications for Private Pensions, September 2000, GAO/HEHS-00-187. For a copy, visit www.gao.gov.) The agency looks at a variety of studies and proposals discussing the implications of Social Security reform for private pensions. NCTR takes GAO 's analysis of the implications for private pensions and applies it the state and local governments, their employees, and their retirement systems.