HOUSE BILL REPORT

SHB 1408

As Amended by the Senate

BYHouse Committee on Appropriations (originally sponsored by Representatives Dorn, Pruitt, G. Fisher, Sayan, P. King, Holland, R. Meyers, Leonard, Patrick, Winsley, Van Luven, Cooper, Walk, Scott and Morris)

Requiring that hours worked in all eligible positions be combined to determine service credit for the public employees' retirement system.

House Committe on Appropriations

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (30)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Appelwick, Belcher, Bowman, Braddock, Brekke, Bristow, Brough, Dorn, Doty, Ebersole, Ferguson, Hine, Holland, May, McLean, Nealey, Padden, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

House Staff:Randy Acker (786-7136)

AS PASSED HOUSE MARCH 14, 1989

BACKGROUND:

In order for an employee to be a member of the Public Employees Retirement System (PERS) Plan I or Plan II the individual must be employed in an eligible position.  Eligible positions are those which normally require five or more uninterrupted months of service in a year for which regular compensation is paid.  Under PERS I an employee must work at least 70 hours per month in a position in order for that position to be eligible.  PERS II requires that an employee work 90 hours per month in a position.  If an employee works less than the specified threshold in a position, the position is considered "ineligible," and therefore the employee does not qualify for membership in PERS based on employment in that position.

Currently, employees who work part-time in more than one position may work more than the specified threshold when all of the hours worked in all positions are added together, but because none of the positions are eligible positions, based on the number of hours worked, the employee does not qualify for membership.

In school districts, this can be a problem for persons working in two part-time positions, i.e. both as a bus driver and food service employee.  If neither position alone provides sufficient hours for it to qualify as an "eligible position," the employee never becomes a member of PERS and receives no service credit, even though the total hours worked in both positions exceed the minimum threshold.  Because neither of the positions are eligible positions, school districts are not required to make retirement contributions for persons holding the positions.

SUMMARY:

The definition of eligible position is changed to specify that employers shall not define position in such a way that an employee's work for that employer is divided into more than one position.

EFFECT OF SENATE AMENDMENTS:

(1)  All hours worked in eligible positions for any employer in a calendar month are to be combined for the purpose of determining a month of service.  This is the original language of HB 1408.  If adopted, it will not alter the current situation faced by persons employed in two or more part-time positions.

(2)  The old state-wide City Employees Retirement System is included under the 1987 and 1988 portability law.

(3)  A special portability provision is created for active members of PERS who meet the following conditions:

(a)  The member previously established five or more years service credit in the City of Seattle Police Relief and Pension Fund System;

(b)  The member withdrew his or her contributions from the Seattle Police Relief and Pension Fund System prior to July 1, 1961; and

(c)  The member has never been a member of the Law Enforcement Officers' and Fire Fighters' Pension System.

Fiscal Note:      Requested March 3, 1989.

House Committee ‑ Testified For:    Donn Fountain, Washington Association of School Administrators; Ben Edlund, Moses Lake School District; Dick Randall, Public School Employees; Karen Davis and Faith Hanna, Washington Education Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    There are school district employees who work two part-time jobs.  When the hours worked in all jobs are added together the employee has sufficient hours to earn service credit; however, because the hours are counted separately for each job, neither of the positions are "eligible" positions.  The result is that these employees do not earn service credit whereas if they worked all the hours in one position, they would.  There will be no additional costs to the state since districts already receive funds for this expense based on the funding formula.

House Committee - Testimony Against:      None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 97; Absent 1

Absent:     Representative Prince.