Summary:

 House Bill 182 (HB 182) modifies the Judicial Retirement Act by revising fund investment policies, adjusting retirement eligibility requirements, and increasing service credit multipliers for judicial pensions. It also raises employer and employee contribution rates while refining rules governing investment management. HB 182 takes effect on July 1, 2025. 

Legislation Overview:

 House Bill 182 (HB 182) restructures the Judicial Retirement Fund by ensuring that all appropriations, court fees, employer and employee contributions, and investment income are credited directly to the fund. The bill alters judicial retirement eligibility by reducing the required service years to five for judges retiring at age 65 and maintaining the requirement of 15 years for those retiring at age 60. The service credit multipliers are adjusted to increase pension calculations, with a new cap set at 100% of an individual's highest salary averaged over 60 consecutive months.

The bill increases the judicial member contribution rate to 14.74% of salary, while employer contributions rise to 19.24%. Additionally, docket fees collected by metropolitan, district, and appellate courts will be redirected to the employer accumulation fund to support pension liabilities. The bill also enhances investment management oversight to align with prudent investor principles.

Fiscal Implications

HB 182 is anticipated to generate increased revenue for the Judicial Retirement Fund through higher contribution rates and redirected court fees. While the bill may improve long-term solvency, it imposes additional costs on the state judiciary and the Public Employees Retirement Board for administering and enforcing the revised provisions. The impact on unfunded liabilities will depend on actuarial assessments and adherence to new contribution structures. 

Current Law:

 Currently, the Judicial Retirement Act establishes separate eligibility requirements based on a judge’s start date, with a maximum pension benefit capped at 85% of the 60-month salary average. Member contributions are set at 10.5%, and employer contributions stand at 15%. Investment oversight follows general Public Employees Retirement Act principles, but existing law lacks the fund-specific structural enhancements introduced in HB 182. 

Amendments:

 Amended March 13, 2025 on House Floor

hfla/HB 182: The House Floor Amendment 1 to House Bill 182 makes several technical and substantive changes to the bill regarding service credit calculations and pension eligibility for judges under the Judicial Retirement Act. The most significant changes include inserting the term “service credit” in multiple sections to clarify that only credited service is counted toward retirement eligibility. The amendment also makes a key adjustment on page 9, line 13, by specifying that certain retirement benefit provisions apply to members who joined on or before June 30, 2025, rather than July 1, 2025. Additionally, the amendment includes a new applicability section, ensuring that any service credit earned before the act’s effective date remains unchanged and is not recalculated under the new provisions.

The amendment primarily provides technical clarifications regarding service credit calculations and pension eligibility, ensuring that there is no ambiguity in how retirement benefits are applied. By inserting “service credit” in multiple locations, the amendment makes it clear that only credited service—not just time in office—counts toward pension eligibility, preventing potential disputes over whether certain judicial roles or periods of employment qualify for retirement benefits.

A significant substantive change is the adjustment of the date by which judges must enter the system to qualify under existing rules. The original bill used July 1, 2025, as the cutoff date, but hfla/HB 182 moves this to June 30, 2025. This change ensures that there is no gap or ambiguity in transition provisions, allowing for a clear distinction between judges covered under the old system and those covered under the new one.

The inclusion of a new applicability section ensures that judges do not lose pension benefits they have already accrued. Without this provision, there may have been concerns that previously earned service credit or pension benefits could be retroactively adjusted under the new rules, which could create legal and financial uncertainties for judges planning for retirement. By explicitly stating that pre-existing service credit calculations remain unchanged, the amendment protects current and former judges from any unintended reductions in retirement benefits.

Implications

The amended bill improve clarity and consistency in how judicial pensions are administered, ensuring that there is no confusion about which service counts toward retirement and how pension benefits are calculated. These changes reduce the risk of legal challenges from judges who might otherwise argue that previously earned service should be treated differently under the new provisions. The change in the transition date also provides a more structured implementation timeline, reducing uncertainty for judges nearing retirement eligibility.

By explicitly grandfathering in existing service credit calculations, hfla/HB 182 helps maintain judicial retention and recruitment. Judges who have planned their careers and financial futures around the current pension system will not be subject to unexpected changes, making it easier for the state to retain experienced judges without disrupting their retirement plans. Additionally, the clarification regarding credited service ensures that the system is fair and applies equally to all judges, preventing misinterpretations or disputes over eligibility.