BP BHEAD INT H

AN ACT Relating to retirement incentive programs; amending RCW 41.32.480, 41.32.765, 41.40.180, and 41.40.630; adding a new section to chapter 41.04 RCW; adding a new chapter to Title 41 RCW; creating a new section; and declaring an emergency.

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

PART I

RETIREMENT INCENTIVE PROGRAMS

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Employer" means the state of Washington or its political subdivisions whose employees are members of a retirement system enumerated under RCW 41.50.030.

(2) "Early retirement" means the authorization under this chapter of temporary retirement eligibility under the retirement systems enumerated under RCW 41.50.030.

(3) "Eligible position" means a position that conforms to the requirements for membership in a retirement system enumerated under RCW 41.50.030, or a retirement system provided by the cities of Seattle, Spokane, or Tacoma.

(4) "Normal retirement" means that retirement, based on service or service and age, of a member of a retirement system where the full retirement allowance is provided.

NEW SECTION. Sec. 2. (1) An employer may temporarily utilize a retirement incentive program as provided in section 3(1) of this act if it has encountered or will be encountering one or more of the following emergent and compelling conditions:

(a) A significant reduction in force due to either (i) budgetary or other fiscal adjustments or (ii) significant personnel restructuring;

(b) The closure of one or more of its facilities; and

(2) An agency of the state must follow the certification procedure for their proposed early retirement program as provided under sections 5 and 6 of this act.

NEW SECTION. Sec. 3. (1) An employer may offer, adhering to all laws or regulations of the state or federal government:

(a) Retirement, without reduction in the retirement allowance, to those targeted employees who are within five years of normal retirement;

(b) Retirement, with full actuarial reduction of the retirement allowance, to other targeted employees more distant to normal retirement eligibility; and

(c) Other incentives the agency or political subdivision deems appropriate, including incentives to those already eligible to retire on normal retirement.

(2) The employer providing early retirement as a part of a retirement incentive program under subsection 1(a) or (b) of this section shall be required to pay the full actuarial present value of any increase in the cost to the respective retirement system or systems resulting from persons taking such early retirement. Such payment must be made to the department of retirement systems within ninety calendar days after the closure of the early retirement program.

NEW SECTION. Sec. 4. Either (1) upon receipt of the notice of certification by the director of financial management under section 6 of this act; or (2) upon notification by a political subdivision, the director of retirement systems shall, within fifteen calendar days of such receipt, inform the certified or requesting employer of the procedures and reporting necessary to carry out any retirement incentive program.

NEW SECTION. Sec. 5. If an agency of state government desires to have a retirement incentive program certified, the following shall be submitted to the director of financial management:

(1) The factual basis of the condition or conditions stated in section 2 of this act with complete fiscal data and any data necessary to support the emergent and compelling claim;

(2) The detailed elements of the plan to meet this condition or conditions, including a retirement incentive program, other personnel and programmatic actions, and communication of this program to the employee;

(3) An affidavit by the agency's counsel or attorney attesting that the plan does not discriminate in any form or impose undue pressure upon employees to retire; and

(4) The capacity to pay the costs of:

(a) Early retirement detailed in section 3(2)(a) and (b) of this act; and

(b) Any incentives offered.

NEW SECTION. Sec. 6. (1) Within sixty calendar days, the director of financial management shall review and evaluate the material submitted by the agency as to:

(a) The existence of the emergent and compelling reason or reasons to endorse the temporary suspension of existing retirement eligibility;

(b) The specific goal or goals of the plan to meet the condition or conditions, together with procedures for planning, communication, and measurement of goal achievement; and

(c) Any additional aspects of the requesting employer's plan to meet the emergent and compelling condition or conditions, including other personnel and programmatic actions.

(2) Upon completion of his or her review and evaluation, the director of financial management shall notify in writing:

(a) The agency of either certification or denial of the request together with the reason or reasons for denial; and

(b) If certifying, the director of retirement systems.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act shall constitute a new chapter in Title 41 RCW.

PART II

MISCELLANEOUS PROVISIONS

NEW SECTION. Sec. 8. A new section is added to chapter 41.04 RCW to read as follows:

Any member of a retirement system enumerated under RCW 41.50.030(1) or (2), or provided by the cities of Seattle, Spokane, or Tacoma who opts to retire early under a program offered under section 3 of this act shall be prohibited from employment in an eligible position or, for two years following retirement, entering into a personal services contract with an employer.

Sec. 9. RCW 41.32.480 and 1991 c 35 s 53 are each amended to read as follows:

(1) Any member who has left public school service after having completed thirty years of creditable service may retire upon the approval by the department of an application for retirement filed on the prescribed form. Upon retirement the member shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of his or her accumulated contributions at his or her age of retirement and a pension as provided in RCW 41.32.497. Effective July 1, 1967, anyone then receiving a retirement allowance or a survivor retirement allowance under this chapter, based on thirty-five years of creditable service, and who has established more than thirty-five years of service credit with the retirement system, shall thereafter receive a retirement allowance based on the total years of service credit established.

(2) Any member who has attained age sixty years, but who has completed less than thirty years of creditable service, upon leaving public school service, may retire upon the approval by the department of an application for retirement filed on the prescribed form. Upon retirement the member shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of his or her accumulated contributions at his or her age of retirement and a pension as provided in RCW 41.32.497.

(3) Any member who has attained age fifty-five years and who has completed not less than twenty-five years of creditable service, upon leaving public school service, may retire upon the approval by the department of an application for retirement filed on the prescribed form. Upon retirement the member shall receive a retirement allowance which shall be the actuarial equivalent of his or her accumulated contributions at his or her age of retirement and a pension as provided in RCW 41.32.497.

(4) Retroactive to July 1, 1969, an individual who has retired pursuant to ((~~this subsection~~)) subsection (3) of this section, on or after July 1, 1969, shall not suffer an actuarial reduction in his or her retirement allowance, except as the allowance may be actuarially reduced pursuant to the options contained in RCW 41.32.530. ((~~This 1974 amendment shall be retroactive to July 1, 1969.~~))

(5) Subsections (1) through (3) of this section may be temporarily superseded by the provisions of a certified retirement incentive program initiated under section 3 of this act.

Sec. 10. RCW 41.32.765 and 1991 c 343 s 5 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member with at least five service credit years of service who has attained at least age sixty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.760.

(2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years of service who has attained at least age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.32.760, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) Subsections (1) and (2) of this section may be temporarily superseded by the provisions of a certified retirement incentive program initiated under section 3 of this act.

Sec. 11. RCW 41.40.180 and 1982 1st ex.s. c 52 s 21 are each amended to read as follows:

(1) Any member with five years of creditable service who has attained age sixty and any original member who has attained age sixty may retire on written application to the director, setting forth at what time the member desires to be retired: PROVIDED, That in the national interest, during time of war engaged in by the United States, the director may extend beyond age sixty, subject to the provisions of subsection (2) of this section, the age at which any member may be eligible to retire.

(2) Any member who has completed thirty years of service may retire on written application to the director setting forth at what time the member desires to be retired, subject to war measures.

(3) Any member who has completed twenty-five years of service and attained age fifty-five may retire on written application to the director setting forth at what time the member desires to be retired, subject to war measures.

(4) Any individual who is eligible to retire pursuant to subsections (1) through (3) of this section shall be allowed to retire while on any authorized leave of absence not in excess of one hundred and twenty days.

(5) Subsections (1) through (3) of this section may be temporarily superseded by the provisions of a certified retirement incentive program initiated under section 3 of this act.

Sec. 12. RCW 41.40.630 and 1991 c 343 s 11 are each amended to read as follows:

(1) NORMAL RETIREMENT. Any member with at least five service credit years who has attained at least age sixty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.620.

(2) EARLY RETIREMENT. Any member who has completed at least twenty service credit years and has attained age fifty-five shall be eligible to retire and to receive a retirement allowance computed according to the provisions of RCW 41.40.620, except that a member retiring pursuant to this subsection shall have the retirement allowance actuarially reduced to reflect the difference in the number of years between age at retirement and the attainment of age sixty-five.

(3) Subsections (1) and (2) of this section may be temporarily superseded by the provisions of a certified retirement incentive program initiated under section 3 of this act.

NEW SECTION. Sec. 13. Part headings as used in this act constitute no part of the law.

NEW SECTION. Sec. 14. 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.