SENATE BILL REPORT

SB 5416

BYSenators Johnson, Moore, Nelson, Niemi, Hayner, Rasmussen, Lee, Bailey, Smitherman, Metcalf and Talmadge; by request of Joint Committee on Pension Policy

Changing provisions relating to portability of public employment retirement benefits.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 20, 1989; February 23, 1989; January 15, 1990

Senate Staff:Michael Groesch (786-7715)

AS OF JANUARY 15, 1990

BACKGROUND:

The portability benefit was adopted in 1987 which allowed the highest average final compensation (AFC), based on each system's definition of AFC, to be utilized if a person had multiple membership within the Public Employees' Retirement System (PERS), Teachers' Retirement System (TRS) and the Washington State Patrol Retirement System (WSPRS).  The separate retirement systems of the cities of Seattle, Spokane and Tacoma were required to hold a public hearing regarding the application of the portability benefit to these respective systems, adopt a resolution asking for coverage under the portability benefit, and submit it to the Department of Retirement Systems (DRS) prior to December 31, 1987.  The Legislature then had to amend the portability benefit to allow coverage for the retirement systems of Seattle, Spokane and Tacoma.

Other than for certain elected officials, an employee of the city of Seattle, Spokane or Tacoma must belong to the retirement system of the respective city.

SUMMARY:

Coverage under the portability benefit is extended to the retirement systems of Seattle, Spokane and Tacoma if each of these cities makes an irrevocable choice for such coverage and indicates this in a resolution transmitted to the director, Department of Retirement Systems (DRS), and the Joint Committee on Pension Policy prior to December 1, 1989.  Having transmitted this resolution, coverage becomes effective on January 1, 1989. Coverage, however, shall begin effective July 1, 1989, if the resolution is transmitted prior to June 1, 1989.

The cities of Seattle, Spokane or Tacoma may opt to let a new employee who is a member of the Public Employees' Retirement System (PERS) to remain a member of PERS rather than become a member of the respective city retirement system.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Effective Date:The bill contains an emergency clause and takes effect immediately.