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Oversight panel disagrees with Pension Board's privatization

Members of a legislative panel are asking the Indiana Public Retirement System Board (INPRS) to back down from its decision allowing a private company to manage part of public employees’ pensions. 

The INPRS Board voted in July to privatize annuity savings accounts offered to public employees and teachers.  Under INPRS management, the accounts earned a fixed interest rate of 7.5%, which the board felt was unsustainable.  The interest rate would be considerably lower under private management, which uses market rates.  Indiana’s teachers union says the difference could mean thousands of dollars less for retirees.  The Pension Management Oversight Commission (PMOC) approved recommendations that INPRS undo its decision to privatize the annuities and set a new fixed interest rate that’s more sustainable. 

INPRS spokesman Jeff Hutson says the board will certainly consider what the commission recommends.

“I don’t know what the board may do based on those recommendations because clearly they are very concerned, as is PMOC, with making sure that the pension plan is properly funded and nothing is done to weaken the system financially.”

PMOC member and Senator Karen Tallian (D-Portage) says if INPRS ignores the commission’s recommendations, the legislature could take more decisive action.

“I think that the INPRS Board was looking for a little direction from the legislature and hopefully they just got it. It was a unanimous, bipartisan recommendation.”

The INPRS Board is scheduled to meet Friday.

Brandon Smith is excited to be working for public radio in Indiana. He has previously worked in public radio as a reporter and anchor in mid-Missouri for KBIA Radio out of Columbia. Prior to that, he worked for WSPY Radio in Plano, Illinois as a show host, reporter, producer and anchor. His first job in radio was in another state capitol, in Jefferson City, Missouri, as a reporter for three radio stations around Missouri. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.
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