Caprio’s Pension Plan
General Treasurer Frank Caprio has released a cliff-notes version of his pension reform plan. It’s composed of two options for future retirees and will not affect current retirees. To summarize:
Plan 1 – Combination Play or “Hybrid” Plan: Mimics the Federal plan: most of the plan consists of a fixed pension and his supplemented by a 401(k) style component. Costs for pension component are shared equally by employee and taxpayers. The State would provide a fixed contribution to the 401(k) portion while employees could make elective payments (ie; not required to pay in).
Plan 2 – 401(k) style plan: The 5 and 5: State and employee contribute 5% to a 401(k) style plan. Approximately 5,000 state employees already have this plan and the idea is to give future employees a choice between either plan.
There are no details on how much this will save long-term versus the current system.