Senate committee axes 13th check for public retirees as debate continues

Tens of thousands of public pension recipients in Indiana would not get a one-time increase in their benefits this year after a change in a Senate committee Thursday.

The House and Senate have long disagreed over whether to provide retirees with a COLA — annual cost of living adjustment — or a 13th check, an additional benefit between $150 and $450, based on years of service.

One bill this session, SB 275, would permanently solve that dispute by providing a 13th check for anyone who retired before July 1, 2025 and a COLA for everyone who retires on or after that date.

But that doesn’t solve the issue that, in last year’s budget, the pension disagreement left retirees with nothing — no COLA or 13th check. The House pushed a bill, HB 1004, to make up for that this year, providing a 13th check.

Senate Appropriations Committee Chair Ryan Mishler (R-Mishawaka) and his fellow Republicans on the panel eliminated that provision Thursday.

“If you do a 13th check, you’re going to prolong the permanent fix,” Mishler said.

Money for benefit enhancements comes from a Supplemental Reserve Account, SRA, that is funded through surcharges paid by public employers. There’s more than $200 million in the SRA right now, and a 13th check this year would cost around $60 million.

READ MORE: How do I follow Indiana’s legislative session? Here’s your guide to demystify the process

Join the conversation and sign up for the Indiana Two-Way. Text "Indiana" to 765-275-1120. Your comments and questions in response to our weekly text help us find the answers you need on statewide issues, including our project Civically, Indiana and our 2024 legislative bill tracker.

Mishler said a COLA is more expensive than a 13th check, so those employers will already have to pay an increased surcharge once the permanent fix takes effect.

“If you do … the 13th check this year and try to implement that next year, you’d have to raise that so high on them to get the dollar amount up there, it wouldn’t be feasible,” Mishler said.

But Jessica Love, executive director of the Retired Indiana Public Employees Association, said both short-term support and a long-term solution are possible.

“Money is not an issue. The budget is not an issue,” Love said. “But retirees barely able to make ends meet, or being totally unable to make ends meet, is an issue.”

Mishler said discussions on the issue will continue.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

Copyright 2024 IPB News. To see more, visit IPB News.