S-0278.2          _______________________________________________

                                 SENATE BILL 5118

                  _______________________________________________

State of Washington              54th Legislature             1995 Regular Session

By Senators Winsley, Long, Bauer, Loveland and Fraser

Read first time 01/11/95.  Referred to Committee on Ways & Means.

Calculating excess compensation for retirement purposes.

     AN ACT Relating to the calculation of excess compensation for retirement purposes; and amending RCW 41.50.150.

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

     Sec. 1.  RCW 41.50.150 and 1984 c 184 s 1 are each amended to read as follows:

     (1) The employer of any employee whose retirement benefits are based in part on excess compensation, as defined in this section, shall, upon receipt of a billing from the department, pay into the appropriate retirement system the present value at the time of the employee's retirement of the total estimated cost of all present and future benefits from the retirement system attributable to the excess compensation.  The state actuary shall determine the estimated cost using the same method and procedure as is used in preparing fiscal note costs for the legislature.  However, the director may in the director's discretion decline to bill the employer if the amount due is less than fifty dollars.  Accounts unsettled within thirty days of the receipt of the billing shall be assessed an interest penalty of one percent of the amount due for each month or fraction thereof beyond the original thirty-day period.

     (2) "Excess compensation," as used in this section, includes any payment that was used in the calculation of the employee's retirement allowance, except regular salary and overtime((,)).  Excess compensation includes but is not limited to:

(a) A cash out of unused annual leave in excess of two hundred forty hours of such leave((,)).  "Cash out" for purposes of this subsection means any payment in lieu of an accrual of annual leave or any payment added to regular salary, concurrent with a reduction of annual leave;

(b) A cash out of any other form of leave((,));

(c) A payment for, or in lieu of, any personal expense((, and)) or transportation allowance;

(d) The portion of any payment that exceeds twice the regular rate of pay; and

(e) Any other termination or severance payment ((used in the calculation of the employee's retirement allowance.  Any payment which is made pursuant to any labor agreement currently in force shall not be deemed excess compensation.  Any payments in excess of regular salary and overtime, and two hundred forty hours of unused annual leave made after the expiration of a current contract shall be excess compensation)).

     (3) This section applies to the retirement systems listed in RCW 41.50.030 and to retirements occurring on or after March 15, 1984.  Nothing in this section is intended to amend or determine the meaning of any definition in chapter 2.10, 2.12, 41.26, 41.32, 41.40, or 43.43 RCW or to determine in any manner what payments are includable in the calculation of a retirement allowance under such chapters.

     (4) An employer is not relieved of liability under this section because of the death of any person either before or after the billing from the department.

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