SENATE BILL REPORT

SB 5153

As Reported By Senate Committee On:

Ways & Means, February 20, 2001

Title:  An act relating to converting the number of months into hours that teachers' retirement system, public employees' retirement system, and school employees' retirement system retirees may work without a reduction in their retirement allowance.

Brief Description:  Converting the number of months into hours that teachers' retirement system, public employees' retirement system, and school employees' retirement system retirees may work without a reduction in their retirement allowance.

Sponsors:  Senators Jacobsen, Winsley, Carlson, Honeyford, Long, Fraser, Kohl‑Welles, Rasmussen, Haugen and Parlette; by request of Joint Committee on Pension Policy.

Brief History:

Committee Activity:  Ways & Means:  1/30/01, 2/20/01 [DP].

SENATE COMMITTEE ON WAYS & MEANS

Majority Report:  Do pass.

Signed by Senators Brown, Chair; Constantine, Vice Chair; Fairley, Vice Chair; Hewitt, Honeyford, Kline, Kohl‑Welles, Long, Parlette, Rasmussen, Regala, Rossi, Sheahan, B. Sheldon, Snyder, Spanel, Winsley and Zarelli.

Staff:  Pete Cutler (786‑7454)

Background:  Persons who retire from the Public Employees Retirement System (PERS Plans 1 and 2), the School Employees Retirement System (SERS Plans 2 and 3), or the Teachers Retirement System Plan 2 or Plan 3 (TRS Plans 2 and 3) are all subject to the same limit on how much they can work after retirement without having a reduction in their retirement allowance.  A retiree who has taken a break from employment for at least one calendar month may return to work in a position covered by the same retirement system for up to five months in a calendar year.  The Department of Retirement Systems has long interpreted the limitation in a manner that counts any calendar month in which a retiree works for even one day as one full month against the five-month limit.

By comparison, the post-retirement employment limitation for TRS Plan 1 is defined in statute as between 525 and 840 hours of employment in a school year.  This approach provides greater flexibility for a retiree to work part-time throughout the year without a reduction in benefit, as compared to the five calendar month limit that applies to PERS, SERS, and TRS Plans 2 and 3.  There are roughly 2080 work hours in a year (40 hours times 52 weeks); 5/12ths of 2080 equals approximately 867 hours.

Summary of Bill:  Persons who retire from PERS Plans 1 and 2, SERS Plans 2 and 3, and TRS Plans 2 and 3 may work up to 867 hours in a calendar year, in a position that is included in PERS, SERS, TRS, or the Law Enforcement Officers and Fire Fighters Retirement System (LEOFF), before their retirement allowance is suspended.

Appropriation:  None.

Fiscal Note:  Requested on January 22, 2001.

Effective Date:  The bill takes effect on January 1, 2002.

Testimony For:  This bill would provide greater flexibility for PERS retirees to work in part‑time positions without having a reduction in their benefits.  The change will bring about a greater consistency with the TRS 1 limits on post‑retirement employment.

Testimony Against:  None.

Testified:  Doug Nelson, PSE; John Kvamme, WASA and AWSP; Leslie Main, WSSRA; Mary Anne Fast, RPEC; Karen Davis, WEA; Mike Ryherd, Teamsters.