Brief Description: Correcting retirement system statutes.

Sponsors: Representatives Conway, Pflug and Cooper; by request of Joint Committee on Pension Policy.

Hearing Date: 2/11/03

Staff: David Pringle (786-7310).

Background:

Omitted cross references to the School Employees' Retirement System

The law authorizing employers to implement "employer pick up" of all member contributions references all systems except the School Employees' Retirement System (SERS). Also, unlike the Public Employees' Retirement System (PERS) and the Teachers' Retirement System (TRS), SERS is not listed among those plans to which members of the Law Enforcement Officers' and Fire Fighters' Retirement System Plan 1 (LEOFF 1) may irrevocably elect to transfer their LEOFF 1 service.

Erroneous cross references

A cross-reference in the LEOFF 2 survivor benefits provisions does not clearly reference the applicable subsection of the LEOFF 2 retirement age rules.

A cross-reference in the PERS 3 gain sharing law incorrectly refers to a definition for "retiree" in the PERS chapter, rather than the equivalent definition in the defined contribution chapter. A reference in the SERS application for retirement section to a section on the right to a hearing should instead be to the section on eligibility for a retirement allowance.

A cross reference in the Pension Funding Council (PFC) relating to the amortization period for Plan 1 is erroneous because of amendments to the same section during the 2001 session.

Necessary cross-references to the separate single-life benefits payable to the ex-spouse of members are missing from Department of Retirement Systems (DRS) rules on payments after the death of a member.

There is an inadvertent omission of cross-reference to PERS Plan 3 in the portability of benefits chapter.

A reference to Washington State Patrol Retirement Systems (WSPRS) disability benefits is inaccurate, as the change to the disability benefits was vetoed.

Administrative funding language does not reflect current practice

The funding for the Office of the State Actuary (OSA) is provided by the Legislature as an appropriation from the DRS expense fund. Current law states that funding for OSA is provided by reimbursement for services to DRS, paid from the DRS expense fund.

Several sections contain inadvertently duplicated language

A payment options section in PERS 2 erroneously refers to distributions from PERS 3 gain-sharing following divorces, which cannot occur. Some language on the same issue was duplicated in the PERS 3 payment options language, and some was erroneously amended into the equivalent section of PERS 2.

WSPRS rules on the payment of accumulated contributions to survivors upon the member's death are erroneously duplicated.

WSPRS service credit transfer provisions are unclear

Language dealing with the transfer of certain service credit from PERS to the Washington State Patrol Retirement System is unclear on the return of contributions to members in the event that the transfer payment is not completed.

Summary of Bill:

Omitted cross references to the School Employees' Retirement System

The SERS is added to the list of systems that allow "employer pick up" of contributions, and to the list of systems into which former LEOFF 1 members may transfer service credit.

Erroneous cross references

The erroneous cross-references in the LEOFF 2 survivor benefits section, the PERS 3 gain-sharing section, the SERS application for retirement section and the PFC section related to amortization of the unfunded plan 1 liabilities are corrected.

Correct cross-references are added to the separate single-life benefits provisions in the DRS rules on the payment of divided benefits following the death of a member, and to the PERS 3 in the list of plans covered by the portability rules.

The reference to disability benefits in the WSPRS is corrected to match the change created by the Governor's veto in 2001.

Administrative funding language does not reflect current practice

The funding provisions for OSA are changed to reflect current budgeting practice.

Several sections contain inadvertently duplicated language

Duplicate language is removed from the PERS 3 rules on distributions following divorces and the WSPRS rules on repayment of accumulated contributions.

WSPRS service credit transfer provisions are unclear

The WSPRS service credit transfer language related to return of member contributions in the event that the member does not complete the transfer payments is clarified.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect ninety days after adjournment of session in which bill is passed, except for section 4, which takes effect January 1, 2004.