BP BHEAD INT S [atlas:bill]

AN ACT Relating to joint committee on pension policy recommendations on rates and economic assumptions for the retirement systems; and amending RCW 41.45.020, 41.45.030, 41.45.060, and 44.44.060.

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

Sec. 1. RCW 41.45.020 and 1995 c 239 s 306 are each amended to read as follows:

As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

(1) "Council" means the economic and revenue forecast council created in RCW 82.33.010.

(2) "Department" means the department of retirement systems.

(3) "Law enforcement officers' and fire fighters' retirement system plan I" and "law enforcement officers' and fire fighters' retirement system plan II" mean the benefits and funding provisions under chapter 41.26 RCW.

(4) "Public employees' retirement system plan I" and "public employees' retirement system plan II" mean the benefits and funding provisions under chapter 41.40 RCW.

(5) "Teachers' retirement system plan I," "teachers' retirement system plan II," and "teachers' retirement system plan III" mean the benefits and funding provisions under chapter 41.32 RCW.

(6) "Washington state patrol retirement system" means the retirement benefits provided under chapter 43.43 RCW.

(7) "Unfunded liability" means the unfunded actuarial accrued liability of a retirement system.

(8) "Actuary" or "state actuary" means the state actuary employed under chapter 44.44 RCW.

(9) "State retirement systems" means the retirement systems listed in RCW 41.50.030.

(10) "Joint committee" means the joint committee on pension policy created in RCW 44.44.050.

Sec. 2. RCW 41.45.030 and 1995 c 233 s 1 are each amended to read as follows:

(1) Beginning September 1, 1995, and every two years thereafter, the state actuary shall submit to the joint committee and the council information regarding the experience and financial condition of each state retirement system. The joint committee will provide recommendations regarding long-term economic assumptions to the council. The council shall ((~~review this~~)) consider the joint committee recommendation and such other information as it may require.

(2) By December 31, 1995, and every two years thereafter, the council, by affirmative vote of five councilmembers, shall adopt the following long-term economic assumptions:

(a) Growth in system membership;

(b) Growth in salaries, exclusive of merit or longevity increases;

(d) Investment rate of return.

The council shall work with the joint committee, the department of retirement systems, the state actuary, and the executive director of the state investment board, and shall consider long-term historical averages, in developing the economic assumptions.

(3) The assumptions adopted by the council shall be used by the state actuary in conducting all actuarial studies of the state retirement systems.

Sec. 3. RCW 41.45.060 and 1995 c 239 s 309 are each amended to read as follows:

(1) The state actuary shall provide actuarial valuation results based on the assumptions adopted under RCW 41.45.030.

(2) The joint committee will make a recommendation to the council on: (a) A basic state contribution rate for the law enforcement officers' and fire fighters' retirement system; and (b) basic employer contribution rates for the public employees' retirement system plan I and plan II, the teachers' retirement system plan I, the teachers' retirement system combined plan II and plan III, and the Washington state patrol retirement system prior to the council's adoption of contribution rates under subsection (3) of this section.

(3) Not later than September 30, 1996, and every two years thereafter, consistent with the assumptions adopted under RCW 41.45.030, the council shall consider the joint committee's recommendation and adopt both: (a) A basic state contribution rate for the law enforcement officers' and fire fighters' retirement system; and (b) basic employer contribution rates for the public employees' retirement system plan I, the teachers' retirement system plan I, and the Washington state patrol retirement system to be used in the ensuing biennial period.

((~~(3)~~)) (4) The employer and state contribution rates adopted by the council shall be the level percentages of pay that 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 plans II and III, and the law enforcement officers' and fire fighters' retirement system plan II in accordance with RCW 41.40.650, 41.26.450, and this section.

((~~(4)~~)) (5) The aggregate actuarial cost method shall be used to calculate a combined plan II and III employer contribution rate.

((~~(5)~~)) (6) 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.

((~~(6)~~)) (7) The director of the department of retirement systems shall collect those rates adopted by the council.

Sec. 4. RCW 44.44.060 and 1987 c 25 s 5 are each amended to read as follows:

The joint committee on pension policy shall have the following powers and duties:

(1) Study pension issues, develop pension policies for public employees in state retirement systems, and make recommendations to the legislature;

(2) Study the financial condition of the state pension systems, develop funding policies, and make recommendations to the legislature and the economic and revenue forecast council; and

(3) Appoint or remove the state actuary by a two-thirds vote of the committee.