AN ACT Relating to retirement from public service; amending RCW 2.12.030, 41.32.499, 41.40.195, 41.32.500, 41.40.150, and 41.26.510; adding a new section to chapter 2.12 RCW; adding a new section to chapter 41.32 RCW; adding a new section to chapter 41.40 RCW; adding a new section to chapter 43.43 RCW; making an appropriation; and providing an effective date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 2.12 RCW to read as follows:

Notwithstanding any provision of law to the contrary, effective July 1, 1988, the monthly benefit of each person who either is receiving benefits pursuant to RCW 2.12.020 or 2.12.030(2) as of December 31, 1987, or commenced receiving a monthly benefit under this chapter as of a date no later than June 30, 1983, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the judge established with the retirement system.

Effective July 1, 1990, the monthly benefit of each person who either is receiving benefits pursuant to RCW 2.12.020 or 2.12.030(2) as of December 31, 1989, or commenced receiving a monthly benefit under this chapter as of a date no later than June 30, 1985, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the judge established with the retirement system.

Effective July 1, 1992, the monthly benefit of each person who either is receiving benefits pursuant to RCW 2.12.020 or 2.12.030(2) as of December 31, 1991, or commenced receiving a monthly benefit under this chapter as of a date no later than June 30, 1985, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the judge established with the retirement system.

Any fraction of a year of service shall be counted in the computation of the postretirement adjustment. These adjustments shall be in lieu of any adjustments provided under RCW 2.12.037 as of July 1, 1985, through July 1, 1993, for the affected persons.

NEW SECTION. Sec. 2. A new section is added to chapter 41.32 RCW to read as follows:

Notwithstanding any provision of law to the contrary, effective July 1, 1988, the monthly benefit of each person who either is receiving benefits for his or her service as a member as of June 30, 1983, or commenced receiving a monthly benefit as of a date no later than December 31, 1987, under RCW 41.32.550 or 41.32.520 or as a surviving spouse or designated beneficiary with an insurable interest in the retiree, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Effective July 1, 1990, the monthly benefit of each person who either is receiving benefits for his or her service as a member as of June 30, 1985, or commenced receiving a monthly benefit as of a date no later than December 31, 1989, under RCW 41.32.550 or 41.32.520 or as a surviving spouse or designated beneficiary with an insurable interest in the retiree, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Effective July 1, 1992, the monthly benefit of each person who either is receiving benefits for his or her service as a member as of December 31, 1991, or commenced receiving a monthly benefit as of a date no later than June 30, 1985, under RCW 41.32.550 or 41.32.520 or as a surviving spouse or designated beneficiary with an insurable interest in the retiree, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Any fraction of a year of service shall be counted in the computation of the postretirement adjustment. These adjustments shall be in lieu of any adjustment provided under RCW 41.32.499 as of July 1, 1985, through July 1, 1993, for the affected persons.

This section is not applicable to those persons receiving benefits pursuant to RCW 41.32.540 or 41.32.760 through 41.32.825 and persons eligible for the postretirement adjustment provided in RCW 41.32.499.

NEW SECTION. Sec. 3. A new section is added to chapter 41.40 RCW to read as follows:

Notwithstanding any provision of law to the contrary, effective July 1, 1988, the monthly benefit of each person who commenced receiving benefits for his or her service no later than June 30, 1983, or commenced receiving benefits under RCW 41.40.220, 41.40.230, 41.40.250, or 41.44.170 as of December 31, 1987, or commenced receiving a monthly benefit under RCW 41.40.270 or as a surviving spouse or written designated beneficiary with an insurable interest in the retiree as of a date no later than December 31, 1987, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Effective July 1, 1990, the monthly benefit of each person who commenced receiving benefits for his or her service no later than June 30, 1985, or commenced receiving benefits under RCW 41.40.220, 41.40.230, 41.40.250, or 41.44.170 as of December 31, 1989, or commenced receiving a monthly benefit under RCW 41.40.270 or as a surviving spouse or written designated beneficiary with an insurable interest in the retiree as of a date no later than December 31, 1989, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Effective July 1, 1992, the monthly benefit of each person who commenced receiving benefits for his or her service no later than June 30, 1985, or commenced receiving benefits under RCW 41.40.220, 41.40.230, 41.40.250, or 41.44.170 as of December 31, 1991, or commenced receiving a monthly benefit under RCW 41.40.270 or as a surviving spouse or written designated beneficiary with an insurable interest in the retiree as of a date no later than December 31, 1991, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Any fraction of a year of service shall be counted in the computation of the postretirement adjustment. These adjustments shall be in lieu of any adjustment provided under RCW 41.40.195 as of July 1, 1985, through July 1, 1993, for the affected persons.

This section is not applicable to those persons receiving benefits pursuant to RCW 41.40.610 through 41.40.740 and persons eligible for the postretirement adjustment provided in RCW 41.40.195.

NEW SECTION. Sec. 4. A new section is added to chapter 43.43 RCW to read as follows:

Notwithstanding any provision of law to the contrary, effective July 1, 1988, all retirement allowances that commenced on a date no later than June 30, 1985, and all beneficiary allowances that commenced on a date no later than December 31, 1987, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Effective July 1, 1990, all retirement allowances that commenced on a date no later than June 30, 1985, and all beneficiary allowances that commenced on a date no later than December 31, 1989, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

Effective July 1, 1992, all retirement allowances that commenced on a date no later than June 30, 1985, and all beneficiary allowances that commenced on a date no later than December 31, 1991, shall be permanently increased by a postretirement adjustment of $.80 per month for each year of creditable service the member established with the retirement system.

These adjustments shall be in lieu of any adjustment provided under RCW 43.43.260(5) as of July 1, 1985, through July 1, 1993, for the affected persons, except that in no case shall such adjustment be less than the total of those which would be provided under RCW 43.43.260(5) as of July 1, 1985, through July 1, 1993.

Sec. 5. Section 3, chapter 229, Laws of 1937 as last amended by section 1, chapter 154, Laws of 1973 1st ex. sess. and RCW 2.12.030 are each amended to read as follows:

(1) Supreme court, court of appeals, or superior court judges of the state who retire from office under the provisions of this chapter other than as provided in RCW 2.12.012 shall be entitled to receive monthly during the period of their natural life, out of the fund hereinafter created, an amount equal to one-half of the monthly salary they were receiving as a judge at the time of their retirement, or at the end of the term immediately prior to their retirement if their retirement is made after expiration of their term.

(2) The surviving spouse of any judge who shall have heretofore retired or may hereafter retire, or of a judge who was heretofore or may hereafter be eligible for retirement at the time of death, if the surviving spouse had been married to the judge for three years, if the surviving spouse had been married to the judge prior to retirement, shall be paid an amount equal to one-half of the retirement pay of the judge, as long as such surviving spouse remains unmarried. The retirement pay shall be paid monthly by the state treasurer on or before the tenth day of each month. The provisions of this section shall apply to the surviving spouse of any judge who dies while holding such office or dies after having retired under the provisions of this chapter and who at the time of death had served ten or more years in the aggregate as a judge of the supreme court, court of appeals, or superior court or any of such courts, or had served an aggregate of twelve years in the supreme court, court of appeals, or superior court if such pension rights are based upon RCW 2.12.012.

Sec. 6. Section 9, chapter 189, Laws of 1973 1st ex. sess. as amended by section 1, chapter 32, Laws of 1973 2nd ex. sess. and RCW 41.32.499 are each amended to read as follows:

(1) "Index" for the purposes of this section shall mean, for any calendar year, that year's annual average consumer price index for urban wage earners and clerical workers, all items (1957-1959 equal one hundred)‑-compiled by the Bureau of Labor Statistics, United States Department of Labor;

(2) "Cost-of-living factor" for the purposes of this section for any year shall mean the ratio of the index for the previous year to the index for the year preceding the initial date of payment of the retirement allowance, except that, in no event, shall the cost-of-living factor, for any year subsequent to 1971, be

(a) less than 1.000;

(b) more than one hundred three percent or less than ninety-seven percent of the previous year's cost-of-living factor; or

(3) The "initial date of payment" for the purposes of adjusting the annuity portion of a retirement allowance for the purposes of this section shall mean the date of retirement of a member.

(4) The "initial date of payment" for the purposes of adjusting the pension portion of a retirement allowance for the purposes of this section shall mean the date of retirement of a member or July 1, 1972, whichever is later: PROVIDED, That this 1973 amendment to this subsection shall be retroactive to July 1, 1973.

(5) Each service retirement allowance payable from July 1, 1973, until any subsequent adjustment pursuant to subsection (6) of this section shall be adjusted so as to equal the product of the cost-of-living factor for 1973 and the amount of said retirement allowance on the initial date of payment.

(6) Each service retirement allowance payable from July 1st of any year after 1973 until any subsequent adjustment pursuant to this subsection shall be adjusted so as to equal the product of the cost-of-living factor for such year and the amount of said retirement allowance on the initial date of payment: PROVIDED, That the board finds, at its sole discretion, that the cost of such adjustments shall have been met by the excess of the growth in the assets of the system over that required for meeting the actuarial liabilities of the system at that time.

(7) Individuals who are active members of the retirement system on or after July 1, 1985, shall have their retirement allowances adjusted pursuant to RCW 41.32.770, in lieu of the adjustment provided by subsections (1) through (6) of this section. No individual shall receive a postretirement adjustment under this subsection until his or her retirement allowance has been in effect for five years or, in the case of survivor benefits, until five years after the member first began receiving a retirement allowance.

Sec. 7. Section 1, chapter 68, Laws of 1970 ex. sess. as last amended by section 1, chapter 14, Laws of 1973 2nd ex. sess. and RCW 41.40.195 are each amended to read as follows:

(1) "Index" for the purposes of this section, shall mean, for any calendar year, that year's annual average consumer price index for urban wage earners and clerical workers, all items (1957-1959 equal one hundred)‑-compiled by the Bureau of Labor Statistics, United States Department of Labor;

(2) "Cost-of-living factor", for any year shall mean the ratio of the index for the previous year to the index for the year preceding the initial date of payment of the retirement allowance, except that, in no event, shall the cost-of-living factor, for any year subsequent to 1971, be

(a) less than 1.000;

(b) more than one hundred three percent or less than ninety-seven percent of the previous year's cost-of-living factor; or

(3) "Initial date of payment" shall mean:

(a) The date of retirement of a member, or

(b) In the case of beneficiary receiving an allowance pursuant to the automatic application of option II pursuant to RCW 41.40.270(2), the first day of the month following the date of death;

(4) Each service retirement allowance payable from July 1, 1973 until any subsequent adjustment pursuant to subsection (5) of this section shall be adjusted so as to equal the product of the cost-of-living factor for 1973 and the amount of said retirement allowance on the initial date of payment.

(5) Each service retirement allowance payable from July 1st of any year after 1973 until any subsequent adjustment pursuant to this subsection shall be adjusted so as to equal the product of the cost-of-living factor for such year and the amount of said retirement allowance on the initial date of payment: PROVIDED, That the board finds, at its sole discretion, that the cost of such adjustments shall have been met by the excess of the growth in the assets of the system over that required for meeting the actuarial liabilities of the system at that time.

(6) The cost-of-living increases provided by this section shall be applicable to those individuals receiving benefits calculated pursuant to chapter 41.44 RCW and paid by the public employees' retirement system pursuant to RCW 41.40.407.

(7) Individuals who are active members of the retirement system on or after July 1, 1985, shall have their retirement allowances adjusted pursuant to RCW 41.40.640, in lieu of the adjustment provided by subsections (1) through (6) of this section. No individual shall receive a postretirement adjustment under this subsection until his or her retirement allowance has been in effect for five years or, in the case of survivor benefits, until five years after the member first began receiving a retirement allowance.

Sec. 8. Section 50, chapter 80, Laws of 1947 as last amended by section 1, chapter 233, Laws of 1983 and RCW 41.32.500 are each amended to read as follows:

(1) Membership in the retirement system is terminated when a member retires for service or disability, dies, withdraws his accumulated contributions or does not establish service credit with the retirement system for five consecutive years; however, a member may retain membership in the teachers' retirement system by leaving his accumulated contributions in the teachers' retirement fund under one of the following conditions:

(a) If he is eligible for retirement;

(b) If he is a member of another public retirement system in the state of Washington by reason of change in employment and has arranged to have membership extended during the period of such employment;

The prior service certificate becomes void when a member dies, withdraws his accumulated contributions or does not establish service credit with the retirement system for five consecutive years, and any prior administrative interpretation of the board of trustees, consistent with this section, is hereby ratified, affirmed and approved.

(2) Any member, except an elected official, who reentered service and who failed to restore withdrawn contributions, shall now have from the effective date of this 1985 act through June 30, 1986, to restore the contributions, with interest as determined by the director.

(3) Within the ninety days following the employee's resumption of employment, the employer shall notify the department of the resumption and the department shall then return to the employer a statement of the potential service credit to be restored, the amount of funds required for restoration, and the date when the restoration must be accomplished. The employee shall be given a copy of the statement and shall sign a copy of the statement which signed copy shall be placed in the employee's personnel file.

Sec. 9. Section 16, chapter 274, Laws of 1947 as last amended by section 2, chapter 233, Laws of 1983 and RCW 41.40.150 are each amended to read as follows:

Should any member die, or should the individual separate or be separated from service without leave of absence before attaining age sixty years, or should the individual become a beneficiary, except a beneficiary of an optional retirement allowance as provided by RCW 41.40.185 or 41.40.190, the individual shall thereupon cease to be a member except;

(1) As provided in RCW 41.40.170.

(2) An employee not previously retired who reenters service shall upon completion of six months of continuous service and upon the restoration of all withdrawn contributions with interest as computed by the director, which restoration must be completed within a total period of five years of membership service following the member's first resumption of employment, be returned to the status, either as an original member or new member which the member held at time of separation.

(3) Any member, except an elected official, who reentered service and who failed to restore withdrawn contributions, shall now have from the effective date of this 1985 act through June 30, 1986, to restore the contributions, with interest as determined by the director.

(4) Within the ninety days following the employee's resumption of employment, the employer shall notify the department of the resumption and the department shall then return to the employer a statement of the potential service credit to be restored, the amount of funds required for restoration, and the date when the restoration must be accomplished. The employee shall be given a copy of the statement and shall sign a copy of the statement which signed copy shall be placed in the employee's personnel file.

(5) A member who separates or has separated after having completed at least five years of service shall remain a member during the period of absence from service for the exclusive purpose of receiving a retirement allowance to begin at attainment of age sixty-five, however, such a member may on written notice to the director elect to receive a reduced retirement allowance on or after age sixty which allowance shall be the actuarial equivalent of the sum necessary to pay regular retirement benefits as of age sixty-five: PROVIDED, That if such member should withdraw all or part of the member's accumulated contributions except those additional contributions made pursuant to RCW 41.40.330(2), the individual shall thereupon cease to be a member and this section shall not apply.

(6) (a) The recipient of a retirement allowance who is employed in an eligible position other than under RCW 41.40.120(12) shall be considered to have terminated his or her retirement status and shall immediately become a member of the retirement system with the status of membership the member held as of the date of retirement. Retirement benefits shall be suspended during the period of eligible employment and the individual shall make contributions and receive membership credit. Such a member shall have the right to again retire if eligible in accordance with RCW 41.40.180: PROVIDED, That where any such right to retire is exercised to become effective before the member has rendered two uninterrupted years of service the type of retirement allowance the member had at the time of the member's previous retirement shall be reinstated, but no additional service credit shall be allowed;

(b) The recipient of a retirement allowance elected to office or appointed to office directly by the governor, and who shall apply for and be accepted in membership as provided in RCW 41.40.120(3) shall be considered to have terminated his or her retirement status and shall become a member of the retirement system with the status of membership the member held as of the date of retirement. Retirement benefits shall be suspended from the date of return to membership until the date when the member again retires and the member shall make contributions and receive membership credit. Such a member shall have the right to again retire if eligible in accordance with RCW 41.40.180: PROVIDED, That where any such right to retire is exercised to become effective before the member has rendered six uninterrupted months of service the type of retirement allowance the member had at the time of the member's previous retirement shall be reinstated, but no additional service credit shall be allowed: AND PROVIDED FURTHER, That if such a recipient of a retirement allowance does not elect to apply for reentry into membership as provided in RCW 41.40.120(3), the member shall be considered to remain in a retirement status and the individual's retirement benefits shall continue without interruption.

(7) Any member who leaves the employment of an employer and enters the employ of a public agency or agencies of the state of Washington, other than those within the jurisdiction of the Washington public employees' retirement system, and who establishes membership in a retirement system or a pension fund operated by such agency or agencies and who shall continue membership therein until attaining age sixty, shall remain a member for the exclusive purpose of receiving a retirement allowance without the limitation found in RCW 41.40.180(1) to begin on attainment of age sixty-five, however, such a member may on written notice to the director elect to receive a reduced retirement allowance on or after age sixty which allowance shall be the actuarial equivalent of the sum necessary to pay regular retirement benefits commencing at age sixty-five: PROVIDED, That if such member should withdraw all or part of the member's accumulated contributions except those additional contributions made pursuant to RCW 41.40.330(2), the individual shall thereupon cease to be a member and this section shall not apply.

NEW SECTION. Sec. 10. There is hereby appropriated seventy-five thousand dollars from the retirement systems expense fund to the department of retirement systems for the biennium ending June 30, 1987, to carry out the administrative purposes of sections 8 and 9 of this act.

Sec. 11. Section 12, chapter 294, Laws of 1977 ex. sess. and RCW 41.26.510 are each amended to read as follows:

(1) If a member or a vested member who has not completed at least ten years of service dies, the amount of the accumulated contributions standing to such member's credit in the retirement system at the time of such member's death shall be paid to such person or persons having an insurable interest in such member's life as the member shall have nominated by written designation duly executed and filed with the department. If there be no such designated person or persons still living at the time of the member's death, such member's accumulated contributions standing to such member's credit in the retirement system shall be paid to the member's surviving spouse as if in fact such spouse had been nominated by written designation, or if there be no such surviving spouse, then to such member's legal representatives.

(2) If a member who is eligible for retirement or a member who has completed at least ten years of service dies, the surviving spouse or eligible child or children shall elect to receive either:

(a) A retirement allowance computed as provided for in RCW 41.26.430(1) actuarially adjusted to reflect Option 2 of RCW 41.26.460 and if the member was not eligible for normal retirement at the date of death a further reduction as described in RCW 41.26.430(2); if a surviving spouse who is receiving a retirement allowance dies leaving a child or children of the member under the age of majority, then such child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until such child or children reach the age of majority; if there is no surviving spouse eligible to receive an allowance at the time of the member's death, such member's child or children under the age of majority shall receive an allowance share and share alike calculated as herein provided making the assumption that the ages of the spouse and member were equal at the time of the member's death; or

(b) The member's accumulated contributions.

(3) If there is no surviving spouse or eligible child or children still living at the time of the death of a member described in subsection (2) of this section, then the member's accumulated contributions standing to the member's credit in the retirement system shall be paid the person or persons having an insurable interest in the member's life as the member has nominated by written designation. If there is no such designated person or persons still living at the time of the member's death, then the accumulated contributions shall be paid to the member's legal representative.

(4) Notwithstanding subsection (2) of this section, if a member receiving benefits or eligible to receive benefits under Title 51 RCW dies, the surviving spouse or eligible child or children shall elect to receive either:

(a) A retirement allowance computed as provided for in RCW 41.26.430(1) actuarially adjusted to reflect option 2 of RCW 41.26.460. If a surviving spouse who is receiving a retirement allowance dies leaving a child or children of a member under the age of majority, then the child or children shall continue to receive an allowance in an amount equal to that which was being received by the surviving spouse, share and share alike, until the child or children reach the age of majority. If there is no surviving spouse eligible to receive an allowance at the time of the member's death, the member's child or children under the age of majority shall receive an allowance, share and share alike, calculated as provided in this section, making the assumption that the ages of the spouse and member were equal at the time of the member's death. However, the total monthly benefits received by a surviving spouse or child or children shall not exceed one hundred percent of the member's basic salary at any time thereafter attached to the rank the member held on his last day of active service; or

(b) The member's accumulated contributions.

NEW SECTION. Sec. 12. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 13. This act shall take effect on January 1, 1986, if the proposed amendment to Article XXX of the state Constitution providing for the funding of retirement system benefits is validly submitted to and is approved and ratified by the voters at a general election held in November 1985. If the proposed amendment is not so approved and ratified, this act shall be null and void in its entirety.