HOUSE BILL REPORT

SHB 440

BYHouse Committee on Ways & Means/Appropriations (originally sponsored by Representatives Unsoeld, Belcher, Jacobsen, Sayan, Lux and Holm)

Revising provisions relating to retirement of elected officials of cities and towns.

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, Fuhrman, Grant, Grimm, Hine, Holland, McLean, McMullen, Nealey, Niemi, Peery, Sayan, Silver, L. Smith, H. Sommers, Sprenkle and B. Williams.

House Staff:Randy Acker (786-7153)

AS PASSED HOUSE MARCH 13, 1987

BACKGROUND:

A person holding elective office in a city or town is not required to become a member of the Public Employees' Retirement System (PERS) but is given the option to join in RCW 41.40.120 (3).  A person who is a PERS member by virtue of his or her full- time employment, and who later is also elected to office in a city or a town, may exercise the option to be a member of PERS under both positions. This would allow the member to use the compensation from both positions to calculate his or her retirement allowance.  However, once such an elected official decides to become a member of PERS, he or she does not have the option of terminating that membership during the term of office.

A PERS member who is employed by two or more PERS employers generally cannot receive retirement benefits until he or she retires from service with all the PERS employers.  Therefore a PERS member who retires from the member's regular employment but who continues to be a PERS member due to holding elective office in a city or town may not receive a retirement allowance.

Approximately 20 cities in Washington state pay their mayors in excess of $10,000 per year; approximately four cities also pay their council members in excess of that amount.

SUMMARY:

A Public Employees' Retirement System (PERS) member who is an elected official of a town or city and who receives no more than $10,000 per year for such service may end his or her membership in PERS without resigning from the elective office. A member who wishes to exercise this option must retire from all other PERS employment and must agree to irrevocably abandon any claim for service for future periods served as an elective official of a city or town.

EFFECT OF SENATE AMENDMENT(S):  An elected official who was eligible to establish membership in PERS I but did not do so, may pay the required member contributions plus interest from the time of initial eligibility and be granted membership in PERS I.  Payments must be made by June 30, 1988.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Representative Jolene Unsoeld.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     A person who is an elected official of a city or town should not have to give up the elective position in order to receive a retirement allowance under PERS.

House Committee - Testimony Against: None Presented.

VOTE ON FINAL PASSAGE:

     Yeas 91, Nays 0; Absent 0; Excused 7

Excused:   Representatives Chandler, Doty, Hankins, Nealey, Sayan, C. Smith and B. Williams