HOUSE BILL REPORT

HB 1128

BYRepresentatives H. Sommers,  Niemi, Allen, Miller, Rust, Basich, Sayan, Bristow, Rayburn and Winsley

Revising the calculation of retirement benefits of part-time teachers.

House Committe on Ways & Means/Appropriations

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass (22)

      Signed by Representatives Locke, Chair; Allen, Belcher, Braddock, Brekke, Bristow, Ebersole, Fuhrman, Grant, Grimm, Hine, Holland, McLean, McMullen, Nealey, Niemi, Peery, Sayan, Silver, H. Sommers, Sprenkle and B. Williams.

House Staff:Randy Acker (786-7153)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS

MARCH 7, 1987

BACKGROUND:

1) The Teacher's Retirement System (TRS) covers teachers and other certificated school employees.  TRS, Plan I (TRS I) allows part time employees to earn proportional service credit; it is the only state retirement system which does so. Part-time employees in TRS II and the other plan II systems receive no service credit unless they work more than ninety (90) hours a month.

2) Prior to 1984 the TRS benefit formula had an unintended negative impact on all TRS I members who worked on a part-time basis during the years which were used to calculate their retirement allowance.  Generally, those members received retirement allowances which were less than proportionate to the allowances they would receive had they worked full-time.  For example, a teacher who retired after a career of working half-time at half the regular salary received one-quarter of the retirement allowance that he or she would have received for full-time work over the same period.

3) In 1984 TRS I was amended so that part time school district (K-12) teachers could have their benefit calculated using an artificial full-time salary rather than the part-time salary actually received.  The intent of the 1984 change was to provide those K-12 teachers who regularly worked on a part-time basis with a retirement allowance that was proportional to their part- time service.  Part-time counselors, librarians, and community college faculty were not covered by the 1984 change.

SUMMARY:

SUBSTITUTE BILL:  The Teacher's Retirement System, Plan I (TRS I) is changed so that TRS I members who are school district librarians and counselors, and community college faculty (including librarians and counselors) who have worked on a part- time basis may elect to receive retirement allowances proportionate to the allowances they would have received had they worked full-time.  Thus, a member who retires after working half- time at half the regular salary should be able to receive one- half of the retirement allowance that he or she would have received for full-time work over the same period.  To be eligible to elect to receive this increased allowance, the retiree must have served in an instructional position where more than 75 percent of his or her work was spent in classroom instruction (which may include formally scheduled office hours) or as a counselor or librarian.

In order to ensure that no member is allowed to use the hypothetical "full-time salary" to unfairly inflate the member's retirement allowance, eligibility criteria are provided and the department of retirement systems is granted the broadest possible rule-making authority. (As recognized in Sanchez v. Labor and Industries,39 Wn.App.80,(1984).)

A member who elects to receive the benefit provided by the act must agree to have his or her benefits calculated on an average of his or her five highest years of compensation.

The legislature may amend or revoke the new benefit provided by the act as to members who have not yet retired.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Technical change to clarify the option provided by the bill.  Also clarifies that part-time K-12 teachers do not lose any contractual rights they may have obtained as a result of the SHB 1254 (1984).

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      None Presented.