S-0834.1/91       _______________________________________________

                                 SENATE BILL 5354

                  _______________________________________________

State of Washington              52nd Legislature             1991 Regular Session

By Senators Saling, Bauer, Rasmussen, Moore, Nelson, Jesernig, Vognild, Madsen, Skratek, von Reichbauer, Gaspard, Wojahn, West and Stratton.

Read first time January 29, 1991.  Referred to Committee on Ways & Means.Revising the cost-of-living allowance for certain retirees.

     AN ACT Relating to cost-of-living allowance for certain retirees; amending RCW 41.32.575 and 41.40.325; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

     Sec. 1.  RCW 41.32.575 and 1989 c 272 s 3 are each amended to read as follows:

     (1) Beginning July 1, ((1989)) 1991, and every year thereafter, the department shall determine the following information for each retired member or beneficiary who ((is over)) attains or has attained the age of sixty-five:

     (a) The dollar amount of the retirement allowance received by the retiree at ((age sixty-five)) retirement, to be known for the purposes of this section as the "((age sixty-five)) base allowance";

     (b) The index for the calendar year prior to the year that the retiree ((reached age sixty-five)) retired, to be known for purposes of this section as "index A";

     (c) The index for the calendar year prior to the date of determination, to be known for purposes of this section as "index B";

     (d) The ratio obtained when index B is divided by index A, to be known for the purposes of this section as the "full purchasing power ratio"; and

     (e) The value obtained when the retiree's ((age sixty-five)) base allowance is multiplied by sixty percent of the retiree's full purchasing power ratio, to be known for the purposes of this section as the "target benefit."

     (2) Beginning with the July payment, the retiree's ((age sixty-five)) base allowance shall be adjusted to be equal to the retiree's target benefit.  In no event, however, shall the adjusted allowance:

     (a) Be smaller than the retirement allowance received without the adjustment; nor

     (b) Differ from the previous year's allowance by more than three percent.

     (3) For members who retire after age sixty-five, the age sixty-five allowance shall be the initial retirement allowance received by the member.

     (4) For beneficiaries of members who die prior to ((age sixty-five)) retirement:  (a) The ((age sixty-five)) base allowance shall be either the allowance received by the beneficiary on the first date the member would have ((turned age sixty-five)) been eligible to retire or, if eligible to retire at the time of death, the allowance the beneficiary receives; and (b) index A shall be the index for the calendar year prior to the year in which the member ((would have turned age sixty-five)) died.

     (5) Where the pension payable to a beneficiary was adjusted at the time the benefit commenced, the benefit provided by this section shall be adjusted in a manner consistent with the adjustment made to the beneficiary's pension.

     (6) For the purposes of this section:

     (a) "Index" means, for any calendar year, that year's average consumer price index--Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor;

     (b) "Retired member" or "retiree" means any member who has retired for service or because of duty or nonduty disability, or the surviving beneficiary of such a member.

     Sec. 2.  RCW 41.40.325 and 1989 c 272 s 2 are each amended to read as follows:

     (1) Beginning July 1, ((1989)) 1991, and every year thereafter, the department shall determine the following information for each retired member or beneficiary ((who is)) attains or has attained over the age of sixty-five:

     (a) The dollar amount of the retirement allowance received by the retiree at ((age sixty-five)) retirement, to be known for the purposes of this section as the "((age sixty-five)) base allowance";

     (b) The index for the calendar year prior to the year that the retiree ((reached age sixty-five)) retired, to be known for purposes of this section as "index A";

     (c) The index for the calendar year prior to the date of determination, to be known for purposes of this section as "index B";

     (d) The ratio obtained when index B is divided by index A, to be known for the purposes of this section as the "full purchasing power ratio"; and

     (e) The value obtained when the retiree's ((age sixty-five)) base allowance is multiplied by sixty percent of the retiree's full purchasing power ratio, to be known for the purposes of this section as the "target benefit."

     (2) Beginning with the July payment, the retiree's ((age sixty-five)) base allowance shall be adjusted to be equal to the retiree's target benefit.  In no event, however, shall the adjusted allowance:

     (a) Be smaller than the retirement allowance received without the adjustment; nor

     (b) Differ from the previous year's allowance by more than three percent.

     (3) For members who retire after age sixty-five, the ((age sixty-five)) base allowance shall be the initial retirement allowance received by the member.

     (4) For beneficiaries of members who die prior to ((age sixty-five)) retirement:  (a) The ((age sixty-five)) base allowance shall be either the allowance received by the beneficiary on the first date the member would have ((turned age sixty-five)) been eligible to retire or, if eligible to retire at the time of death, the allowance the beneficiary receives; and (b) index A shall be the index for the calendar year prior to the year in which the member ((would have turned age sixty-five)) died.

     (5) Where the pension payable to a beneficiary was adjusted at the time the benefit commenced, the benefit provided by this section shall be adjusted in a manner consistent with the adjustment made to the beneficiary's pension.

     (6) For the purposes of this section:

     (a) "Index" means, for any calendar year, that year's average consumer price index--Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor;

     (b) "Retired member" or "retiree" means any member who has retired for service or because of duty or nonduty disability, or the surviving beneficiary of such a member.

NEW SECTION. Sec. 3.      This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.