BP BHEAD INT S [atlas:bill]

AN ACT Relating to the sharing of extraordinary investment gains in teachers' retirement system plan III; amending RCW 41.45.061 and 41.45.070; and adding a new section to chapter 41.34 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 41.34 RCW to read as follows:

(1) Beginning July 1, 1998, and on January 1st of even-numbered years thereafter, the member account of a person meeting the requirements of this section shall be credited by the extraordinary investment gain amount.

(2) The following persons shall be eligible for the benefit provided in subsection (1) of this section:

(a) Any member who earned service credit during the twelve-month period from September 1st to August 30th immediately preceding the distribution and had a balance of at least one thousand dollars in their member account on August 30th of the year immediately preceding the distribution; or

(b) Any person in receipt of a benefit pursuant to RCW 41.32.875; or

(i) Completed ten service credit years; or

(ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

(iii) Completed five service credit years by July 1, 1996, under plan II and who transferred to plan III under RCW 41.32.817; or

(d) Any person who had a balance of at least one thousand dollars in their member account on August 30th of the year immediately preceding the distribution and who:

(i) Completed ten service credit years; or

(ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or

(iii) Completed five service credit years by July 1, 1996, under plan II and who transferred to plan III under RCW 41.32.817.

(3) The extraordinary investment gain amount shall be calculated as follows:

(a) One-half of the value of the net assets held in trust for pension benefits in the teachers' retirement system combined plan II and III fund at the close of the previous state fiscal year not including the amount attributable to member accounts;

(b) Multiplied by the amount which investment returns on those assets geometrically averaged over the previous four state fiscal years exceeds ten percent;

(i) The sum of the service credit on August 30th of the previous year of all persons eligible for the benefit provided in subsection (1) of this section; to,

(ii) The sum of the service credit on August 30th of the previous year of:

(A) All persons eligible for the benefit provided in subsection (1) of this section; and

(B) Any person who earned service credit in plan II during the twelve-month period from September 1st to August 30th immediately preceding the distribution; and

(D) Any person with five or more years of service in plan II;

(d) Divided proportionally among persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 30th of the previous year.

(4) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to receive this distribution not granted prior to the amend or repeal of this section.

Sec. 2. RCW 41.45.061 and 1997 c 10 s 2 are each amended to read as follows:

(1) The required contribution rate for members of the plan II teachers' retirement system shall be fixed at the rates in effect on July 1, ((~~1996~~)) 1998, subject to the following:

(a) Beginning September 1, ((~~1997~~)) 1999, except as provided in (b) of this subsection, the employee contribution rate shall not exceed the employer plan II and III rates adopted under RCW 41.45.060 and 41.45.070 for the teachers' retirement system;

(b) In addition, the employee contribution rate for plan II shall be increased by fifty percent of the contribution rate increase caused by any plan II benefit increase passed after July 1, ((~~1996~~)) 1998;

(c) In addition, the employee contribution rate for plan II shall not be increased as a result of any distributions pursuant to section 1 of this act.

(2) The required plan II and III contribution rates for employers shall be adopted in the manner described in RCW 41.45.060.

Sec. 3. RCW 41.45.070 and 1995 c 239 s 310 are each amended to read as follows:

(1) In addition to the basic employer contribution rate established in RCW 41.45.060, the department shall also charge employers of public employees' retirement system, teachers' retirement system, or Washington state patrol retirement system members an additional supplemental rate to pay for the cost of additional benefits, if any, granted to members of those systems. Except as provided in subsection (6) of this section, the supplemental contribution rates required by this section shall be calculated by the state actuary and shall be charged regardless of language to the contrary contained in the statute which authorizes additional benefits.

(2) In addition to the basic state contribution rate established in RCW 41.45.060 for the law enforcement officers' and fire fighters' retirement system the department shall also establish a supplemental rate to pay for the cost of additional benefits, if any, granted to members of the law enforcement officers' and fire fighters' retirement system. This supplemental rate shall be calculated by the state actuary and the state treasurer shall transfer the additional required contributions regardless of language to the contrary contained in the statute which authorizes the additional benefits.

(3) The supplemental rate charged under this section to fund benefit increases provided to active members 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 Washington state patrol retirement system, shall be calculated as the level percentage of all members' pay needed to fund the cost of the benefit not later than June 30, 2024.

(4) The supplemental rate charged under this section to fund benefit increases provided to active and retired members of the public employees' retirement system plan II, the teachers' retirement system plan II and plan III, or the law enforcement officers' and fire fighters' retirement system plan II, shall be calculated as the level percentage of all members' pay needed to fund the cost of the benefit, as calculated under RCW 41.40.650((~~, 41.32.775,~~)) or 41.26.450, respectively.

(5) The supplemental rate charged under this section to fund postretirement adjustments which are provided on a nonautomatic basis to current retirees shall be calculated as the percentage of pay needed to fund the adjustments as they are paid to the retirees. The supplemental rate charged under this section to fund automatic postretirement adjustments for active or retired members of the public employees' retirement system plan I and the teachers' retirement system plan I shall be calculated as the level percentage of pay needed to fund the cost of the automatic adjustments not later than June 30, 2024.

(6) A supplemental rate shall not be charged to pay for the cost of additional benefits granted to members pursuant to section 1 of this act.