SENATE BILL REPORT

HB 1021

BYRepresentatives Hine, Silver, Sayan, D. Sommers, H. Sommers, Patrick, Anderson, Jacobsen, Smith, Wineberry, Prentice, Brough, Rector, Dellwo, May, Betrozoff, Cole, Ferguson, Wood, Horn, Walker, Todd, Winsley, Schoon, McLean, Moyer, Basich, P. King, Miller and Bowman; by request of Joint Committee on Pension Policy

Allowing school nurses to transfer their retirement accounts from city retirement systems to the state teachers' retirement system.

House Committe on Appropriations

Senate Committee on Ways & Means

Senate Hearing Date(s):

Senate Staff:Charles Langen (786-7715)

AS OF MARCH 21, 1989

BACKGROUND:

As a general rule, when a public employee moves from a job covered by one retirement system to a job covered by a different retirement system, the employee's retirement service credit is split between the two retirement systems.  This is a problem for two reasons:

1)  If the employee did not work long enough to vest (generally five years) under one of the systems, he or she will receive no retirement benefit from that system; and

2)  Even if the employee has a "vested" benefit, that benefit will be calculated using the employee's compensation while a member of that system, which might be much lower than the compensation earned immediately prior to retirement.

Prior to the mid-1970s, some nurses were employed by the Seattle, Spokane, or Tacoma City Health Departments which contracted with public schools to provide nursing services.  During their employment with the Health Department, these nurses were given retirement credit with either the Seattle, Spokane, or Tacoma City Employee Retirement Systems.  Later the arrangement between public schools and health departments ended; public schools began to hire their own school nurses and the public school nurses became members of the Teachers' Retirement System (Chapter 41.32 RCW).

Some school nurses now have their retirement service credit split between one of these city employee retirement systems and the Teachers' Retirement System.

SUMMARY:

Members of the Teachers' Retirement System (TRS) who are employed as public school nurses after the effective date of the bill and who have service credit in the Seattle, Tacoma or Spokane City Employee Retirement System for previous employment with a public health department are provided a special portability benefit.

A member who fulfills the above requirements may transfer the member's service credit in the Seattle, Tacoma or Spokane City Employees Retirement System to TRS.  The member shall have until December 31, 1990 to restore contributions in the city system and to file a declaration of the member's desire to make an irrevocable transfer of credit.

The city system shall transfer to DRS a report of the member's service credit and an amount equal to the employer and member contributions, plus interest, attributable to that service.

The member may receive credit for any periods of service for which credit would have been granted in TRS, subject to certain conditions.

Appropriation:    none

Revenue:    none

Fiscal Note:      available