FINAL BILL REPORT

SB 6381

C 62 L 02

Synopsis as Enacted

Brief Description:  Separating from public employees' retirement system plan 1.

Sponsors:  Senators Fraser, Winsley, Spanel, Regala and Jacobsen; by request of Joint Committee on Pension Policy.

Senate Committee on Ways & Means

House Committee on Appropriations

Background:  Active members of the Public Employees' Retirement System, Plan 1 (PERS 1) may receive an unreduced retirement allowance at any age if they have 30 years of service, at age 55 after 25 years of service, or at age 60 after five years of service.  However, if a PERS 1 member leaves PERS employment prior to retirement, the retirement age for that member increases to age 65 and the member may not receive an unreduced retirement allowance until that time.  The only other state retirement plan that provides a higher retirement age for persons who separate employment prior to retirement is the Washington State Patrol Retirement System; in all other plans the retirement age does not differ for active and inactive members.

Inactive PERS 1 members have the option of receiving an actuarially reduced retirement allowance beginning as early as age 60.  The actuarial reduction for retirement at age 60 is approximately 40 percent; thus, an inactive PERS 1 member who is eligible for a $1,000 monthly benefit at age 65 would receive about $600 if the benefit commenced at age 60.

Summary:  A PERS 1 member who:  separates from service after January 1, 2002; is age 50 or older, has at least 20 years of service; and is not retired as of the effective date of the bill, may begin receiving an unreduced retirement allowance at age 60.  This new provision does not apply to members who have withdrawn all or part of their contributions.

Votes on Final Passage:

Senate426

House940

Effective:  June 13, 2002