CERTIFICATION OF ENROLLMENT

 

             ENGROSSED SUBSTITUTE SENATE BILL 5937

 

 

                    Chapter 10, Laws of 2001

 

                         (partial veto)

 

                        57th Legislature

                  2001 Second Special Session

 

 

POSTRETIREMENT EMPLOYMENT--RETIREMENT SYSTEM RETIREES

 

 

 

EFFECTIVE DATE:  7/1/01 - Except section 12, which becomes effective 12/31/04.

 

Passed by the Senate June 20, 2001

  YEAS 39   NAYS 0

 

 

               BRAD OWEN

President of the Senate

 

Passed by the House June 19, 2001

  YEAS 84   NAYS 1

             CERTIFICATE

 

I, Tony M. Cook, Secretary of the Senate of the State of Washington, do hereby certify that the attached is  ENGROSSED SUBSTITUTE SENATE BILL 5937 as passed by the Senate and the House of Representatives on the dates hereon set forth.

 

 

              FRANK CHOPP

Speaker of the

      House of Representatives

            TONY M. COOK

                            Secretary

 

 

 

             CLYDE BALLARD

Speaker of the

      House of Representatives

 

 

Approved June 26, 2001, with the exception of sections 5 and 6, which are vetoed.Place Style On Codes above, and Style Off Codes below.     

                                FILED          

 

 

           June 26, 2001 - 11:47 a.m.

 

 

 

              GARY LOCKE

Governor of the State of Washington

                 Secretary of State

                 State of Washington


          _______________________________________________

 

               ENGROSSED SUBSTITUTE SENATE BILL 5937

          _______________________________________________

 

                      AS AMENDED BY THE HOUSE

 

           Passed Legislature - 2001 2nd Special Session

 

State of Washington      57th Legislature     2001 Regular Session

 

By Senate Committee on Ways & Means (originally sponsored by Senators Shin, Rasmussen, Jacobsen, Winsley, Kohl‑Welles and McAuliffe; by request of Governor Locke and Superintendent of Public Instruction)

 

READ FIRST TIME 03/08/01.

Changing postretirement employment restrictions for teachers' retirement system, public employees' retirement system, and school employees' retirement system retirees.      


    AN ACT Relating to postretirement employment for teachers' retirement system, public employees' retirement system, and school employees' retirement system retirees; amending RCW 28A.405.900, 41.32.570, 41.40.037, 41.32.802, 41.32.860, 41.32.862, 41.35.060, 41.40.037, and 41.40.750; creating new sections; providing effective dates; providing expiration dates; and declaring an emergency.

 

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

 

    NEW SECTION.  Sec. 1.  (1) The department of retirement systems, the office of the superintendent of public instruction, the department of personnel, and the health care authority shall jointly develop publications for use during the 2001‑03 biennium to explain options for, and implications of, postretirement employment for members and retirees of the teachers' retirement system plan 1 and the public employees' retirement system plan 1.

    (2) The publications shall address such issues as:  (a) Health insurance coverage upon reemployment; (b) health benefit options upon termination of postretirement employment; (c) sick leave, annual leave, and other compensation practices; (d) options for, and implications of, reentry into active retirement system membership; (e) hiring procedures for retirees; and (f) collective bargaining rights and responsibilities.

 

    Sec. 2.  RCW 28A.405.900 and 1990 c 33 s 404 are each amended to read as follows:

    Certificated employees subject to the provisions of RCW 28A.310.250, 28A.405.010 through 28A.405.240, 28A.405.400 through 28A.405.410, 28A.415.250, and 28A.405.900 shall not include those certificated employees hired to replace certificated employees who have been granted sabbatical, regular, or other leave by school districts, and shall not include retirees hired for postretirement employment under the provisions of this act.

    It is not the intention of the legislature that this section apply to any regularly hired certificated employee or that the legal or constitutional rights of such employee be limited, abridged, or abrogated.

 

    Sec. 3.  RCW 41.32.570 and 1999 c 387 s 1 are each amended to read as follows:

    (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every seven hours worked during that month.  This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

    (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred forty hours per month.  Any monthly benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

    (2) Any retired teacher or retired administrator who enters service in any public educational institution in Washington state and who has satisfied the break in employment requirement of subsection (1) of this section shall cease to receive pension payments while engaged in such service((:  PROVIDED, That service may be rendered up to five hundred twenty-five hours per school year without reduction of pension.

    (3) In addition to the five hundred twenty-five hours of service permitted under subsection (2) of this section, a retired teacher or retired administrator may also serve only as a substitute teacher for up to an additional three hundred fifteen hours per school year without reduction of pension if:

    (a) A school district, which is not a member of a multidistrict substitute cooperative, determines that it has exhausted or can reasonably anticipate that it will exhaust its list of qualified and available substitutes and the school board of the district adopts a resolution to make its substitute teachers who are retired teachers or retired administrators eligible for the extended service once the list of qualified and available substitutes has been exhausted.  The resolution by the school district shall state that the services of retired teachers and retired administrators are necessary to address the shortage of qualified and available substitutes.  The resolution shall be valid only for the school year in which it is adopted.  The district shall forward a copy of the resolution with a list of retired teachers and retired administrators who have been employed as substitute teachers to the department and may notify the retired teachers and retired administrators included on the list of their right to take advantage of the provisions of this subsection; or

    (b) A multidistrict substitute cooperative determines that the school districts have exhausted or can reasonably anticipate that they will exhaust their list of qualified and available substitutes and each of the school boards adopts a resolution to make their substitute teachers who are retired teachers or retired administrators eligible for the extended service once the list of qualified and available substitutes has been exhausted.  The resolutions by each of the school districts shall state that the services of retired teachers and retired administrators are necessary to address the shortage of qualified and available substitutes.  The resolutions shall be valid only for the school year in which they are adopted.  The cooperative shall forward a copy of the resolutions with a list of retired teachers and retired administrators who have been employed as substitute teachers to the department and may notify the retired teachers and retired administrators included on the list of their right to take advantage of the provisions of this subsection.

    (4) In addition to the five hundred twenty-five hours of service permitted under subsection (2) of this section, a retired administrator or retired teacher may also serve as a substitute administrator up to an additional one hundred five hours per school year without reduction of pension if a school district board of directors adopts a resolution declaring that the services of a retired administrator or retired teacher are necessary because it cannot find a replacement administrator to fill a vacancy.  The resolution shall be valid only for the school year in which it is adopted.  The district shall forward a copy of the resolution with the name of the retired administrator or retired teacher who has been employed as a substitute administrator to the department.

    (5) In addition to the five hundred twenty-five hours of service permitted under subsection (2) of this section and the one hundred five hours permitted under subsection (4) of this section, a retired principal may also serve as a substitute principal up to an additional two hundred ten hours per school year without a reduction of pension if a school district board of directors adopts a resolution declaring that the services of a retired principal are necessary because it cannot find a replacement principal to fill a vacancy.  The resolution shall be valid only for the school year in which it is adopted.  The district shall forward a copy of the resolution with the name of the retired principal who has been employed as a substitute principal to the department.

    (6) Subsection (2) of this section shall apply to all persons governed by the provisions of plan 1, regardless of the date of their retirement, but shall apply only to benefits payable after June 11, 1986.

    (7) Subsection (3) of this section shall apply to all persons governed by the provisions of plan 1, regardless of the date of their retirement, but shall only apply to benefits payable after September 1, 1994)), after the retiree has rendered service for more than one thousand five hundred hours in a school year.  When a retired teacher or administrator renders service beyond eight hundred sixty-seven hours, the department shall collect from the employer the applicable employer retirement contributions for the entire duration of the member's employment during that fiscal year.

    (3) The department shall collect and provide the state actuary with information relevant to the use of this section for the joint committee on pension policy.

    (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 be employed for more than five hundred twenty-five hours per year without a reduction of his or her pension.

 

    Sec. 4.  RCW 41.40.037 and 1997 c 254 s 14 are each amended to read as follows:

    (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every eight hours worked during that month.  This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

    (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred sixty hours per month.  Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

    (2)(a) A retiree from plan 1 who has satisfied the break in employment requirement of subsection (1) of this section and who enters employment with an employer may continue to receive pension payments while engaged in such service for up to one thousand five hundred hours of service in a calendar year without a reduction of pension.  When a plan 1 member renders service beyond eight hundred sixty-seven hours, the department shall collect from the employer the applicable employer retirement contributions for the entire duration of the member's employment during that calendar year.

    (b) A retiree from plan 2 or plan 3 who has satisfied the break in employment requirement of subsection (1) of this section((,)) may work up to ((five months per)) eight hundred sixty-seven hours in a calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030, without suspension of his or her benefit.

    (3) If the retiree opts to reestablish membership under RCW 41.40.023(12), he or she terminates his or her retirement status and becomes a member.  Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit.  Such a member shall have the right to again retire if eligible in accordance with RCW 41.40.180.  However, if the right to retire is exercised to become effective before the member has rendered two uninterrupted years of service, the retirement formula and survivor options the member had at the time of the member's previous retirement shall be reinstated.

    (4) The department shall collect and provide the state actuary with information relevant to the use of this section for the joint committee on pension policy.

    (5) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to be employed for more than five months in a calendar year without a reduction of his or her pension.

 

    *NEW SECTION.  Sec. 5.  Sections 2 and 3 of this act expire June 30, 2004.

*Sec. 5 was vetoed.  See message at end of chapter.

 

    *NEW SECTION.  Sec. 6.  Section 4 of this act expires December 31, 2004.

*Sec. 6 was vetoed.  See message at end of chapter.

 

    NEW SECTION.  Sec. 7.  The office of the state actuary shall review the actuarial impact of the temporary expansion of the postretirement employment limitations provided by sections 3 and 4 of this act.  No later than July 1, 2003, the state actuary shall prepare a report for the joint committee on pension policy regarding the fiscal and policy impacts of this act.  The joint committee shall solicit information from the superintendent of public instruction, the department of personnel, the office of financial management, the department of retirement systems, and the health care authority regarding the program impacts of this act and shall report to the legislative fiscal committees no later than October 1, 2003, on any proposed changes or improvements to this act.  If the state actuary determines the expansion of postretirement options under sections 3 and 4 of this act has resulted in increased costs for the state retirement funds, the joint committee report shall include a proposal for a process to charge those employers who employ retirees pursuant to an extension of sections 3 and 4 of this act for the costs incurred by the retirement funds under the extension.

 

    Sec. 8.  RCW 41.32.802 and 1997 c 254 s 8 are each amended to read as follows:

    (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every seven hours worked during that month.  This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

    (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred forty hours per month.  Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

    (2) A retiree who has satisfied the break in employment requirement of subsection (1) of this section, may work up to ((five months)) eight hundred sixty-seven hours per calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030, without suspension of his or her benefit.

    (3) If the retiree opts to reestablish membership under RCW 41.32.044, he or she terminates his or her retirement status and immediately becomes a member.  Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit.  Such a member shall have the right to again retire if eligible.

 

    Sec. 9.  RCW 41.32.860 and 1997 c 254 s 7 are each amended to read as follows:

    (1) Except under RCW 41.32.862, no retiree shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in RCW 41.40.010 ((or)), 41.32.010, or 41.35.010, or as a law enforcement officer or fire fighter as defined in RCW 41.26.030.

    (2) If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused the suspension of benefits.  Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.

 

    Sec. 10.  RCW 41.32.862 and 1997 c 254 s 9 are each amended to read as follows:

    (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every seven hours worked during that month.  This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

    (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred forty hours per month.  Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

    (2) A retiree who has satisfied the break in employment requirement of subsection (1) of this section, may work up to ((five months)) eight hundred sixty-seven hours per calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030, without suspension of his or her benefit.

    (3) If the retiree opts to reestablish membership under RCW 41.32.044, he or she terminates his or her retirement status and immediately becomes a member.  Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit.  Such a member shall have the right to again retire if eligible.

 

    Sec. 11.  RCW 41.35.060 and 1998 c 341 s 7 are each amended to read as follows:

    (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every eight hours worked during that month.  This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

    (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred sixty hours per month.  Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

    (2) A retiree who has satisfied the break in employment requirement of subsection (1) of this section may work up to ((five months)) eight hundred sixty-seven hours per calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030, without suspension of his or her benefit.

    (3) If the retiree opts to reestablish membership under RCW 41.35.030, he or she terminates his or her retirement status and becomes a member.  Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit.  Such a member shall have the right to again retire if eligible in accordance with RCW 41.35.420 or 41.35.680.  However, if the right to retire is exercised to become effective before the member has rendered two uninterrupted years of service, the retirement formula and survivor options the member had at the time of the member's previous retirement shall be reinstated.

 

    Sec. 12.  RCW 41.40.037 and 1997 c 254 s 14 are each amended to read as follows:

    (1)(a) If a retiree enters employment with an employer sooner than one calendar month after his or her accrual date, the retiree's monthly retirement allowance will be reduced by five and one-half percent for every eight hours worked during that month.  This reduction will be applied each month until the retiree remains absent from employment with an employer for one full calendar month.

    (b) The benefit reduction provided in (a) of this subsection will accrue for a maximum of one hundred sixty hours per month.  Any benefit reduction over one hundred percent will be applied to the benefit the retiree is eligible to receive in subsequent months.

    (2) A retiree who has satisfied the break in employment requirement of subsection (1) of this section, may work up to ((five months)) eight hundred sixty-seven hours per calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, or 41.40.010, or as a fire fighter or law enforcement officer, as defined in RCW 41.26.030, without suspension of his or her benefit.

    (3) If the retiree opts to reestablish membership under RCW 41.40.023(12), he or she terminates his or her retirement status and becomes a member.  Retirement benefits shall not accrue during the period of membership and the individual shall make contributions and receive membership credit.  Such a member shall have the right to again retire if eligible in accordance with RCW 41.40.180.  However, if the right to retire is exercised to become effective before the member has rendered two uninterrupted years of service, the retirement formula and survivor options the member had at the time of the member's previous retirement shall be reinstated.

 

    Sec. 13.  RCW 41.40.750 and 1998 c 341 s 113 are each amended to read as follows:

    (1) Effective September 1, 2000, the membership of all plan 2 members currently employed in eligible positions in a school district or educational service district and all plan 2 service credit for such members, is transferred to the Washington school employees' retirement system plan 2.  Plan 2 members who have withdrawn their member contributions for prior plan 2 service may restore contributions and service credit to the Washington school employees' retirement system plan 2 as provided under RCW 41.40.740.

    (2)(a) The membership and previous service credit of a plan 2 member not employed in an eligible position on September 1, 2000, will be transferred to the Washington school employees' retirement system plan 2 when he or she becomes employed in an eligible position.  Plan 2 members not employed in an eligible position on September 1, 2000, who have withdrawn their member contributions for prior plan 2 service may restore contributions and service credit to the Washington school employees' retirement system plan 2 as provided under RCW 41.40.740.

    (b) The membership and previous service credit of a plan 2 member last employed by a school district or educational service district and retired prior to September 1, 2000, will be transferred to the Washington school employees' retirement system plan 2 if the member opts to reestablish membership.

    (3) Members who restore contributions and service credit under subsection (1) or (2) of this section shall have their contributions and service credit transferred to the Washington school employees' retirement system.

 

    NEW SECTION.  Sec. 14.  Except for section 12 of this act which takes effect December 31, 2004, 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 takes effect July 1, 2001.


    Passed the Senate June 20, 2001.

    Passed the House June 19, 2001.

Approved by the Governor June 26, 2001, with the exception of certain items that were vetoed.

    Filed in Office of Secretary of State June 26, 2001.


 

    Note:  Governor's explanation of partial veto is as follows:

 

    "I am returning herewith, without my approval as to sections 5 and 6, Engrossed Substitute Senate Bill No. 5937 entitled:

 

"AN ACT Relating to postretirement employment for teachers' retirement system, public employees' retirement system, and school employees' retirement system retirees;"

 

    This bill addresses worker retention problems in public employment by expanding post-retirement employment opportunities for Plan 1 members of the teachers' and public employees' retirement systems.

 

    The state is facing a critical shortage of experienced teachers and other employees with skills that are in high demand.  To meet this shortage, we need to attract retirees back to work.  ESSB 5937 will help us in this task by creating a program for post-retirement employment.  To improve the effectiveness of this program and ensure a steady supply of people with valuable expertise in our schools and state and local agencies, I have vetoed sections 5 and 6, which would have terminated the program in 2004.  This sunset date would have been premature and would not have allowed sufficient time for the program to develop.

 

    The bill contains provisions for a study of the program, and a means to recover any resulting costs from employers.  These provisions provide adequate safeguards for the program and make sections 5 and 6 unnecessary.

 

    For these reasons, I have vetoed sections 5 and 6 of Engrossed Substitute Senate Bill No. 5937.

 

    With the exception of sections 5 and 6, Engrossed Substitute Senate Bill 5937 is approved."