AN ACT Relating to improvement of retirement
system benefits; amending RCW 43.01.170, 28A.400.212, 41.54.061, 41.54.040,
41.45.030, 41.45.040, 41.45.060, 41.45.0601, 43.33A.020, and 43.33A.040; adding
a new section to chapter 41.32 RCW; adding a new section to chapter 41.40 RCW;
adding a new section to chapter 41.50 RCW; creating new sections; and declaring
an emergency.
BE
IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
PART
I - COST-OF-LIVING ADJUSTMENT EXTENSION
NEW SECTION. Sec. 1.
The benefit adjustment granted by sections 711(1) and 712(1), chapter 232, Laws
of 1992 (uncodified) being received by plan I beneficiaries as of June 30,
1993, unless otherwise improper, shall be continued through June 30, 1995.
PART
II - NEW TEMPORARY COST-OF-LIVING ADJUSTMENT
NEW SECTION. Sec. 2. A
new section is added to chapter 41.32 RCW under the subchapter heading
"Plan I" to read as follows:
(1) Effective July 1, 1993, through June 30,
1995, the monthly benefit of each plan I beneficiary under this chapter is
increased three dollars per month per year of creditable service established by
the member, reflecting any actuarial reduction made or survivor option taken,
if the beneficiary:
(a) Is not receiving a minimum benefit under
RCW 41.32.487 or cost-of-living adjustment under RCW 41.32.575; and
(b) Is at least age seventy as of July 1, 1993;
and
(c) Was receiving benefits as of July 1, 1988;
and
(d) Is not a recipient of the temporary
disability under RCW 41.32.540.
(2) Any fraction of a year is counted in the
computation of this adjustment.
NEW SECTION. Sec. 3. A new
section is added to chapter 41.40 RCW under the subchapter heading "Plan
I" to read as follows:
(1) Effective July 1, 1993, through June 30,
1995, the monthly benefit of each plan I beneficiary under this chapter is
increased three dollars per month per year of creditable service established by
the member, reflecting any actuarial reduction made or survivor option taken,
if the beneficiary:
(a) Is not receiving a minimum benefit under
RCW 41.40.198 or cost-of-living adjustment under RCW 41.40.325; and
(b) Is at least age seventy as of July 1, 1993;
and
(c) Was receiving benefits as of July 1, 1988.
(2) Any fraction of a year is counted in the
computation of this adjustment.
PART
III - EARLY RETIREMENT
NEW SECTION. Sec. 4.
(1) Subject to subsection (2) of this section, in addition to members eligible
to retire under RCW 41.40.180, any member of the public employees' retirement
system plan I who meets the following criteria may retire after providing
written notification to the member's employer and submitting the required
application to the director on a form provided by the department:
(a) The member is employed by an employer in an
eligible position on March 1, 1993; and
(b) The member has: (i) Attained the age of
fifty-five years and completed five service credit years of service; (ii)
completed twenty-five service credit years of service; or (iii) attained the
age of fifty years and completed twenty service credit years of service.
(2) A member who wishes to apply for retirement
under subsection (1) of this section who is employed by a school district must
submit the required notification and application form no later than July 1,
1993, setting forth that the member shall be retired no later than August 31,
1993. A member employed by any employer other than a school district must
submit the required notification and application no later than August 31, 1993,
setting forth that the member shall be retired no later than December 31, 1993.
NEW SECTION. Sec. 5.
Section 4 of this act is added to chapter 41.40 RCW, but because of its
temporary nature, shall not be codified.
NEW SECTION. Sec. 6.
(1) Subject to subsection (2) of this section, in addition to members eligible
to retire under RCW 41.32.480, any member of the teachers' retirement system
plan I who meets the following criteria may retire after providing written
notification to the member's employer and submitting the required application
to the director on a form provided by the department:
(a) The member is employed by an employer on
March 1, 1993, and is not a substitute teacher; and
(b) The member has: (i) Attained the age of
fifty-five years and completed five service credit years of service; (ii)
completed twenty-five service credit years of service; or (iii) attained the
age of fifty years and completed twenty service credit years of service.
(2) A member who wishes to apply for retirement
under subsection (1) of this section must submit the required notification and
application form no later than July 1, 1993, setting forth that the member
shall be retired no later than August 31, 1993. A member employed by any
employer other than a school district must submit the required notification and
application no later than August 31, 1993, setting forth that the member shall
be retired no later than December 31, 1993.
NEW SECTION. Sec. 7.
Section 6 of this act is added to chapter 41.32 RCW, but because of its temporary
nature, shall not be codified.
NEW SECTION. Sec. 8.
The office of the state actuary shall study the actual utilization of the early
retirement offered by this act, the replacement of persons who utilized the
early retirement, and the fiscal and programmatic impact of early retirement on
the state, local governments, and school districts. The office of financial
management and the office of the superintendent of public instruction shall
provide technical assistance and information to the office of the state actuary
for the study required in this section. An initial report on the study shall
be submitted to the joint committee on pension policy and the fiscal committees
of the legislature by December 31, 1993, and the final report on the study
shall be submitted to the same committees by October 1, 1994.
NEW SECTION. Sec. 9. In
order to ensure that the state derives the expected benefits from the early
retirement provisions of this act, no state agency may engage through personal
service contracts persons who retire from service under the provisions of this
act. Exceptions to this section may be granted by written approval from the
director of the office of financial management if the director finds that the
proposed contract is necessary to protect the public safety, protect against
the loss of federal certification or loss of critical federal funds, or carry
out functions so essential to the agency that even temporary suspension or
delay of services would have a significant negative impact on the public. At
the end of each three-month period in which exceptions are approved, the
director shall forward a copy of any approvals, together with justification for
the exceptions, to the fiscal committees of the legislature. Each forwarded
approval shall include the name of the proposed contractor, the agency and
division or department requesting the contract, duration and cost of the
proposed contract, and specific functions and duties to be carried out under
the contract. This section shall expire June 30, 1995.
NEW SECTION. Sec. 10.
Section 9 of this act is added to chapter 39.29 RCW, but because of its
temporary nature, shall not be codified.
NEW SECTION. Sec. 11. In
order to ensure that the state derives the expected benefits from the early
retirement provisions of this act, no board of directors of a school district
or educational service district may engage through personal service contracts
persons who retire from service under the provisions of this act. Exceptions
to this section may be granted by written approval from the superintendent of
public instruction if the superintendent finds that the proposed contract is
necessary to protect student safety, protect against the loss of school
district certification or loss of federal funds, or carry out functions so
essential to the district that even temporary suspension or delay of services
would have a significant negative impact on students. At the end of each
three-month period in which exceptions are approved, the superintendent shall
forward a copy of any approvals, together with justification for the
exceptions, to the office of financial management and the fiscal committees of
the legislature. Each forwarded approval shall include the name of the
proposed contractor, the district requesting the contract, duration and cost of
the proposed contract, and specific functions and duties to be carried out
under the contract. This section shall expire August 31, 1995.
NEW SECTION. Sec. 12.
Section 11 of this act is added to chapter 28A.400 RCW, but because of its
temporary nature, shall not be codified.
Sec. 13.
RCW 43.01.170 and 1992 c 234 s 11 are each amended to read as follows:
In order to ensure that the state derives the
expected benefits from the early retirement provisions of chapter 234, Laws of
1992, and chapter . . ., Laws of 1993 (this act), no state
agency may hire persons who retire from ((state)) service under the
provisions of chapter 234, Laws of 1992, or chapter . . ., Laws of
1993 (this act), as temporary or project employees, as defined by the state
personnel board for employees covered under chapter 41.06 RCW ((and)),
by the higher education personnel board for employees covered under chapter
28B.16 RCW, and by the employer for persons not covered under chapter 28B.16
RCW who are employed by institutions of higher education or community or
technical colleges. Exceptions to this section may be granted by written
approval from the director of the office of financial management if the
director finds that the temporary or project employment of a retiree is
necessary to protect the public safety, protect against the loss of federal
certification or loss of critical federal funds, or carry out functions so
essential to the agency that even temporary suspension or delay of services
would have a significant negative impact on the public. At the end of each
three-month period in which exceptions are approved, the director shall forward
a copy of any approvals, together with justification for the exceptions, to the
fiscal committees of the legislature. Each forwarded approval shall include
the name of the temporary or project employee, the agency and division or
department requesting the employment, duration and cost of the proposed
employment, and specific functions and duties to be carried out during the
employment. This section shall expire June 30, 1995.
Sec. 14.
RCW 28A.400.212 and 1992 c 234 s 13 are each amended to read as follows:
An employee of a school district that has
established an attendance incentive program under RCW 28A.400.210 who retires
under section 1 or 3, chapter 234, Laws of 1992, or section 4 or 6 of this
act shall receive, at the time of his or her separation from school
district employment, not less than one-half of the remuneration for accrued
leave for illness or injury payable to him or her under the district's
incentive program. The school district board of directors may, at its
discretion, pay the remainder of such an employee's remuneration for accrued
leave for illness or injury after the time of the employee's separation from
school district employment, but the employee or the employee's estate is
entitled to receive the remainder of the remuneration no later than the date
the employee would have been eligible to retire under the provisions of RCW
41.40.180 or 41.32.480 had the employee continued to work for the district
until eligible to retire, or three years following the date of the employee's
separation from school district employment, whichever occurs first. A district
exercising its discretion under this section to pay the remainder of the
remuneration after the time of the employee's separation from school district
employment shall establish a policy and procedure for paying the remaining
remuneration that applies to all affected employees equally and without
discrimination. Any remuneration paid shall be based on the number of days of
leave the employee had accrued and the compensation the employee received at
the time he or she retired under section 1 or 3, chapter 234, Laws of 1992,
or section 4 or 6 of this act.
PART
IV - CITIES' PORTABILITY
Sec. 15.
RCW 41.54.061 and 1990 c 192 s 3 are each amended to read as follows:
(1) The cities of Seattle, Spokane, and Tacoma
shall each have the option of making an irrevocable election to have its
employee retirement system included in the coverage of this chapter by adopting
a resolution transmitting it to the director and the joint committee on pension
policy prior to December ((1, 1990)) 31, 1993.
The resolution shall indicate the city's desire
to be covered by this chapter and its willingness to pay for the additional
cost it may incur as a result of the benefits provided by this chapter.
(2) This chapter shall become effective on
January 1, ((1991)) 1994, for each city which adopts a resolution
pursuant to subsection (1) of this section. ((However, if all three cities
adopt such resolutions prior to June 1, 1990, the provisions of this chapter
shall become effective for those systems on July 1, 1990.))
Sec. 16.
RCW 41.54.040 and 1990 c 192 s 5 are each amended to read as follows:
(1) ((Except where subsection (4) of this
section applies,)) The retirement allowances calculated under RCW
41.54.030 shall be paid separately by each respective current and prior
system. Any deductions from such separate payments shall be according to the
provisions of the respective systems.
(2) Postretirement adjustments, if any, shall
be applied by the respective systems based on the payments made under
subsection (1) of this section.
(3) If a dual member dies in service in any
system, the surviving spouse shall receive the same benefit from each system
that would have been received if the member were active in the system at the
time of death based on service actually established in that system. However,
this subsection does not make a surviving spouse eligible for the survivor
benefits provided in RCW 43.43.270.
(4) The department shall adopt rules under
chapter 34.05 RCW to ensure that where a dual member has service in a system
established under chapter 41.32, 41.40, 41.44, or 43.43 RCW and service under
the city employee retirement system for Seattle, Tacoma, or Spokane, the ((entire))
additional cost incurred as a result of the dual member receiving a benefit
under this chapter shall be borne by the ((city)) retirement system ((that
the person is a member of)) incurring the additional cost.
PART
V - RETIREMENT CONTRIBUTION RATES
Sec. 17.
RCW 41.45.030 and 1989 c 273 s 3 are each amended to read as follows:
(1) ((The economic and revenue forecast
council shall adopt the economic assumptions used by the state actuary in
conducting valuation studies of the state retirement systems.
(2)))
Beginning September 1, 1989, and every six years thereafter, the state actuary
shall submit to the council information regarding the experience and financial
condition of each state retirement system. (2) The council shall
review the information submitted by the state actuary and shall ((recommend
any adjustments which may be needed to the state or employer contribution rates
contained in RCW 41.45.060 and 41.45.070 for the public employees' retirement
system; the teachers' retirement system; the law enforcement officers' and fire
fighters' retirement system; and the Washington state patrol retirement system))
adopt the economic assumptions used by the state actuary in conducting
valuation studies of the state retirement systems.
(3) The council may utilize information
provided by the state actuary and such other information as it may request.
Sec. 18.
RCW 41.45.040 and 1989 c 273 s 4 are each amended to read as follows:
(1) The adoption of the economic assumptions
and the ((recommendation of changes in employer and state)) contribution
rates as provided in RCW 41.45.060 shall be by affirmative vote of at
least five members of the council.
(2) The employer and state contribution rates
((recommended)) adopted by the council shall be the level
percentages of pay which are needed:
(a) To fully amortize the total costs of the
public employees' retirement system plan I, the teachers' retirement system
plan I, the law enforcement officers' and fire fighters' retirement system plan
I, and the unfunded liability of the Washington state patrol retirement system
not later than June 30, 2024; and
(b) To also continue to fully fund the public
employees' retirement system plan II, the teachers' retirement system plan II,
and the law enforcement officers' and fire fighters' retirement system plan II
in accordance with the provisions of RCW 41.40.650, 41.32.775, and 41.26.450,
respectively.
Sec. 19.
RCW 41.45.060 and 1992 c 239 s 2 are each amended to read as follows:
((Beginning July)) (1) For the period
of September 1, 1993, through August 31, 1995, the basic state
contribution rate for the law enforcement officers' and fire fighters'
retirement system, and the basic employer contribution rates for the public
employees' retirement system, the teachers' retirement system, and the
Washington state patrol retirement system shall be as ((follows:
(1) 7.47% for all members of the public
employees' retirement system;
(2) 12.60% for all members of the teachers'
retirement system;
(3) 16.44% for all members of the law
enforcement officers' and fire fighters' retirement system; and
(4) 15.53% for all members of the Washington
state patrol retirement system)) determined
in the 1991 valuations prepared by the office of the state actuary.
(2) Not later than September 30, 1994, and
every two years thereafter:
(a) The council shall adopt the
contributions to be used in the ensuing biennial period for the systems
specified in subsection (1) of this section.
(b) The council shall immediately notify the
directors of the office of financial management and department of retirement
systems of the state and employer contribution rates adopted under (a) of this
subsection.
(c) The director of the department of
retirement systems shall collect those rates adopted by the council under this
chapter.
Sec. 20.
RCW 41.45.0601 and 1992 c 239 s 1 are each amended to read as follows:
Beginning September 1, 1992, through ((June
30)) August 31, 1993, the basic state contribution rate for the law
enforcement officers' and fire fighters' retirement system, and the basic
employer contribution rates for the public employees' retirement system, the
teachers' retirement system, and the Washington state patrol retirement system
shall be as follows:
(1) 7.27% for all members of the public
employees' retirement system;
(2) 12.08% for all members of the teachers'
retirement system;
(3) 12.99% for all members of the law
enforcement officers' and fire fighters' retirement system; and
(4) 17.16% for all members of the Washington
state patrol retirement system.
NEW SECTION. Sec. 21. A
new section is added to chapter 41.50 RCW to read as follows:
The director shall inform all employers in
writing as to the employer rates adopted by the economic and revenue forecast
council upon the notification of the council as prescribed in RCW 41.45.060.
PART
VI - STATE INVESTMENT BOARD
Sec. 22.
RCW 43.33A.020 and 1985 c 195 s 1 are each amended to read as follows:
There is hereby created the state investment
board to consist of ((fourteen)) sixteen members to be appointed
as provided in this section.
(1) One member who is an active member of the
public employees' retirement system and has been an active member for at least
five years. This member shall be appointed by the governor, subject to
confirmation by the senate, from a list of nominations submitted by
organizations representing active members of the system. The initial term of
appointment shall be one year.
(2) One member who is an active member of the
law enforcement officers' and fire fighters' retirement system and has been an
active member for at least five years. This member shall be appointed by the
governor, subject to confirmation by the senate, from a list of nominations
submitted by organizations representing active members of the system. The
initial term of appointment shall be two years.
(3) One member who is an active member of the
teachers' retirement system and has been an active member for at least five
years. This member shall be appointed by the superintendent of public
instruction subject to confirmation by the senate. The initial term of appointment
shall be three years.
(4) The state treasurer or the assistant state
treasurer if designated by the state treasurer.
(5) ((A)) Two members of
the state house of representatives((. This member shall be)) appointed
by the speaker of the house of representatives, one from each of the
majority and minority parties.
(6) ((A)) Two members of
the state senate((. This member shall be)) appointed by the president
of the senate, one from each of the majority and minority parties.
(7) One member who is a retired member of a
state retirement system shall be appointed by the governor, subject to
confirmation by the senate. The initial term of appointment shall be three
years.
(8) The director of the department of labor and
industries.
(9) The director of the department of
retirement systems.
(10) Five nonvoting members appointed by the
state investment board who are considered experienced and qualified in the
field of investments.
The legislative members shall serve terms of
two years. The initial legislative members appointed to the board shall be
appointed no sooner than January 10, 1983. The position of a legislative
member on the board shall become vacant at the end of that member's term on the
board or whenever the member ceases to be a member of the senate or house of
representatives from which the member was appointed.
After the initial term of appointment, all
other members of the state investment board, except ex officio members, shall
serve terms of three years and shall hold office until successors are
appointed. Members' terms, except for ex officio members, shall commence on
January 1 of the year in which the appointments are made.
Members may be reappointed for additional
terms. Appointments for vacancies shall be made for the unexpired terms in the
same manner as the original appointments. Any member may be removed from the
board for cause by the member's respective appointing authority.
Sec. 23.
RCW 43.33A.040 and 1981 c 219 s 2 are each amended to read as follows:
(1) A quorum to conduct the business of the
state investment board consists of at least ((four voting members of the
board before January 10, 1983, and five)) six voting members ((thereafter)).
No action may be taken by the board without the affirmative vote of ((four
members before January 10, 1983, and five)) at least six members ((thereafter)).
(2) The state investment board shall meet at
least quarterly at such times as it may fix. The board shall elect a
chairperson and vice chairperson annually: PROVIDED, That the legislative
members are not eligible to serve as chairperson.
PART
VII - MISCELLANEOUS
NEW SECTION. Sec. 24.
Part headings as used in this act do not constitute any part of the law.
NEW SECTION. Sec. 25.
This act is necessary for the immediate preservation of the public peace,
health, or safety, or support of the state government and its existing public
institutions, and shall take effect immediately.
