An Act Concerning Retirement Benefits And Workers' Compensation Benefits.
Summary
HB 5609 would require municipalities and special taxing districts that offer defined benefit pension plans to treat certain workers’ compensation payments as wages when calculating retirement benefits. Specifically, for an employee whose final average salary is used to determine a pension, the bill requires the employer to use the greater of the wages already counted under the plan or the temporary total disability and temporary partial disability benefits the employee received during the salary-calculation period. The measure applies to municipal and special district pension systems for officers, employees, and beneficiaries.
The bill is prospective, taking effect July 1, 2025, and it expressly preserves collective bargaining agreements already in effect before that date. In practical terms, it would affect how retirement benefits are computed for employees who receive workers’ compensation disability benefits during the period used to calculate final average salary, potentially increasing pensionable earnings and resulting retirement payouts in some cases.
Impact
HB 5609 would amend the rules governing municipal and special taxing district defined benefit retirement systems by requiring inclusion of certain workers’ compensation disability benefits in pension wage calculations. It does not appear to change the workers’ compensation benefit structure itself, but it could increase pension liabilities and benefit amounts for affected public employees by raising the wage base used in final average salary calculations. The bill also limits disruption to existing labor agreements by protecting collective bargaining agreements already in force before July 1, 2025.
Sentiment
The available voting history suggests the bill was generally supported in committee, though not unanimously. It received a unanimous vote to draft and then a 9-4 vote for Joint Favorable Substitute, indicating majority support with some opposition. No transcript excerpts are available, so the record shows support at the committee level but also enough disagreement to produce a split vote on the substitute version.
Contention
The main point of contention appears to be whether workers’ compensation disability payments should be treated as pensionable wages for municipal retirement calculations. Supporters likely view the bill as ensuring fairness for employees whose earnings are reduced by work-related injuries, while opponents may be concerned about increased pension costs, expanded municipal liabilities, and the effect on existing retirement plan formulas. The bill’s savings clause for preexisting collective bargaining agreements suggests labor contract impacts were also a relevant issue.