CERTIFICATION OF ENROLLMENT

                        SENATE BILL 5352

                        53rd Legislature

                      1993 Regular Session

Passed by the Senate April 22, 1993   YEAS 43   NAYS 0 President of the Senate Passed by the House April 17, 1993   YEAS 96   NAYS 0

CERTIFICATE I, Marty Brown, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SENATE BILL 5352 as passed by the Senate and the House of Representatives on the dates hereon set forth.

Speaker of the        House of Representatives

Secretary

Approved Place Style On Codes above, and Style Off Codes below.

FILED

Governor of the State of Washington

Secretary of State                        State of Washington

                              _______________________________________________

                                                     SENATE BILL 5352

                              _______________________________________________

                                                            AS AMENDED BY THE HOUSE

                                                       Passed Legislature - 1993 Regular Session

State of Washington                              53rd Legislature                             1993 Regular Session

By Senators Newhouse, Spanel, Moore, Bauer and Winsley; by request of Joint Committee on Pension Policy

Read first time 01/25/93.  Referred to Committee on Ways & Means.

Specifying how payments based on retirement agreements shall affect calculation of pension benefits.

          AN ACT Relating to the effect of payments based on retirement agreements on calculation of pension benefits; and adding a new section to chapter 41.50 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  A new section is added to chapter 41.50 RCW to read as follows:

          Any payment made by an employer to a member of any retirement system enumerated in RCW 41.50.030 based on either an agreement of the employee to terminate or retire; or notification to the employer of intent to retire; shall affect retirement as follows:

          (1) If the agreement does not require the employee to perform additional service, the payment shall not be used in any way to calculate the pension benefit.

          (2) If the agreement requires additional service and results in payment at the same or a lower rate than that paid for the same or

similar service by other employees it may be included in the pension benefit calculation but shall be deemed excess compensation and is billable to the employer as provided in RCW 41.50.150.

          (3) If the agreement requires additional service and results in payment at a rate higher than that paid for the same or similar service by other employees, that portion of the payment which equals the payment for the same or similar service shall be treated as described in subsection (2) of this section, and the balance of the payment shall be treated as described in subsection (1) of this section.

NEW SECTION. Sec. 2.  A new section is added to chapter 41.50 RCW to read as follows:

          Members of the teachers' retirement system who retired prior to January 1, 1993, from service with a community college district whose reported earnable compensation included payments made pursuant to an agreement to terminate or retire, or to provide notice of intent to retire, and whose retirement allowance has been  reduced under RCW 41.50.150 or is reduced after the effective date of this act under section (1) of this act, shall have an opportunity to change the retirement allowance payment option selected by the member under RCW 41.32.530.  Any request for a change shall be made in writing to the department no later than October 31, 1993, and shall apply prospectively only.

NEW SECTION. Sec. 3.  A new section is added to chapter 41.50 RCW to read as follows:

          (1) Retirees whose reported earnable compensation included  payments made pursuant to an agreement to terminate or retire, or to provide notice of intent to retire, shall not be required to repay to the trust funds any overpayments resulting from the employer misreporting, subject to the conditions provided in subsection (2) of this section.  The retirees' allowances shall be prospectively adjusted to reflect the benefits to which the retirees are correctly entitled.

          (2) Subsection (1) of this section shall apply only to members of the teachers' retirement system who retired prior to January 1, 1993, from service with a community college district.

          (3) Any retirees under subsection (2) of this section who, since January 1, 1990, have had their retirement allowances reduced under RCW 41.50.130(1)(b) because of the inclusion of retirement agreement payments in calculating their allowances, shall have their allowances adjusted to reflect the benefits to which the retirees are correctly entitled, but without a reduction to recoup prior overpayments.  The retirees shall be reimbursed by the retirement system for the cumulative amount of the reduction in the retirement allowance that has occurred since January 1, 1990, to recoup prior overpayments.

          (4) Any retirees covered by subsection (2) of this section who, after January 1, 1990, repaid a previous overpayment in a lump sum under RCW 41.50.130(1)(b) because of the inclusion of retirement agreement payments in calculating their allowances, shall be reimbursed by the retirement system for the amount of the lump sum repayment.

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