SENATE BILL REPORT

SB 5982

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As of March 10, 2015

Title: An act relating to retirement age provisions for new members of the state retirement systems administered by the department of retirement systems.

Brief Description: Addressing retirement age provisions for new members of the state retirement systems administered by the department of retirement systems.

Sponsors: Senator Braun.

Brief History:

Committee Activity: Ways & Means: 3/24/15.

SENATE COMMITTEE ON WAYS & MEANS

Staff: Pete Cutler (786-7474)

Background: The normal retirement age for a defined benefit retirement plan is generally the age at which a member can begin receiving an unreduced retirement allowance. The normal retirement ages for the state retirement plans administered by the Department of Retirement Systems (DRS) that are open to new members are as follows:

Most state retirement plans also permit members to retire prior to the normal retirement age and receive a reduced retirement allowance. The early retirement ages for DRS plans open to new members are as follows:

Members of PERS 2 & 3, TRS 2 & 3, SERS 2 & 3, PSERS 2, and LEOFF 2 who become disabled are eligible to receive a retirement allowance that is reduced to reflect the difference between the member's age at disability and the plans' normal retirement age.

In 2012 the Society of Actuaries published the Mortality Improvement Scale BB Report, an updated table of annual mortality improvement rates. The new table documents increases in average life spans and includes projections for future additional increases. The updated table was used by the State Actuary in conducting the 2013 actuarial valuations for the state retirement plans.

Summary of Bill: The normal retirement ages for PERS 2 & 3, TRS 2 & 3, SERS 2 & 3, PSERS 2, LEOFF 2, and WSPRS members are each increased by two years for persons who first become members of the retirement plan on or after July 1, 2015.

The reductions for early retirement and for disability retirement for persons who first become members on or after July 1, 2015, are calculated based on the difference between the member's age at retirement or disability and the new plans' normal retirement ages.

Appropriation: None.

Fiscal Note: Available.

Committee/Commission/Task Force Created: No.

Effective Date: The bill contains an emergency clause and takes effect on July 1, 2015.