BILL REQ. #:  S-0770.1 

Read first time 01/19/2005.   Referred to Committee on Ways & Means.

     AN ACT Relating to postretirement employment for members of the public employees' retirement system plan 1 and the teachers' retirement system plan 1; amending RCW 41.32.570 and 41.40.037; reenacting and amending RCW 41.40.037; creating new sections; providing an effective date; providing an expiration date; and declaring an emergency.

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

Sec. 1   RCW 41.32.570 and 2003 c 295 s 6 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) Except as provided in subsection (3) of this section, 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)) at least one calendar month after his or her accrual date shall cease to receive pension payments while engaged in such service, after the retiree has rendered service for more than ((one thousand five hundred)) eight hundred sixty-seven 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) Any retired teacher or retired administrator who enters service in any public educational institution in Washington state one and one-half calendar months or more after his or her accrual date and:
     (a) Is hired into a special education, science, or mathematics position for which the school board has documented a justifiable need to hire a retiree;
     (b) Is hired through the established process for the position with the approval of the school board of the prospective employer; and
     (c) The employer retains records of the procedures followed and the decisions made in hiring the retired teacher or retired administrator and provides those records in the event of an audit;
shall cease to receive pension payments while engaged in that service after the retiree has rendered service for more than one thousand five hundred hours in a school year.
     (4) The department shall collect and provide the state actuary with information relevant to the use of this section for the select committee on pension policy. By December 1st of each year, the superintendent of public instruction may recommend to the appropriate legislative fiscal committees a list of employment positions to be considered by the legislature for inclusion in subsection (3) of this section. In the case of each position, the recommendation shall include a documented and justifiable need to hire retirees into that position.
     (((4))) (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 hundred twenty-five hours per year without a reduction of his or her pension.

NEW SECTION.  Sec. 2   A retiree from plan 1 of the teachers' retirement system who entered employment with an employer under RCW 41.32.570(2) as it existed prior to its amendment by chapter . . ., Laws of 2005 (this act) may continue to receive pension payments under the terms and conditions of that statute until December 31, 2005.

Sec. 3   RCW 41.40.037 and 2003 c 412 s 5 and 2003 c 295 s 7 are each reenacted and 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) Except as provided in (b) of this subsection, a retiree from plan 1 who enters employment with an employer at least one calendar month after his or her accrual date may continue to receive pension payments while engaged in such service for up to eight hundred sixty-seven hours of service in a calendar year without a reduction of pension.
     (b) A retiree from plan 1 who enters employment with an employer at least three calendar months after his or her accrual date and:
     (i) Is hired into ((a position for which the employer has documented a justifiable need to hire a retiree into the position)) one of the following employment positions: Actuary, including an actuary associate, correctional health investigator, dentist, pharmacist, physician, public health advisor, radiation health physicist, or radiology technician;
     (ii) Is hired through the established process for the position with the approval of: A school board for a school district; the chief executive officer of a state agency employer; the secretary of the senate for the senate; the chief clerk of the house of representatives for the house of representatives; the secretary of the senate and the chief clerk of the house of representatives jointly for the joint legislative audit and review committee, the legislative transportation committee, the joint committee on pension policy, the legislative evaluation and accountability program, the legislative systems committee, and the statute law committee; or according to rules adopted for the rehiring of retired plan 1 members for a local government employer; and
     (iii) The employer retains records of the procedures followed and decisions made in hiring the retiree, and provides those records in the event of an audit; ((and
     (iv) The employee has not already rendered a cumulative total of more than one thousand nine hundred hours of service while in receipt of pension payments beyond an annual threshold of eight hundred sixty-seven hours;))
shall cease to receive pension payments while engaged in that service after the retiree has rendered service for more than one thousand five hundred hours in a calendar year. ((The one thousand nine hundred hour cumulative total under this subsection applies prospectively to those retiring after July 27, 2003, and retroactively to those who retired prior to July 27, 2003, and shall be calculated from the date of retirement.))
     (c) 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.
     (d) 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 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 select committee on pension policy. By December 1st of each year, the department of personnel, the superintendent of public instruction, and any other employer listed in subsection (2)(b) of this section may recommend to the appropriate legislative fiscal committees a list of employment positions to be considered by the legislature for inclusion in subsection (2)(b) of this section. In the case of each position, the recommendation shall include a documented and justifiable need to hire retirees into that position.
     (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.

Sec. 4   RCW 41.40.037 and 2004 c 242 s 63 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) Except as provided in (b) of this subsection, a retiree from plan 1 who enters employment with an employer at least one calendar month after his or her accrual date may continue to receive pension payments while engaged in such service for up to eight hundred sixty-seven hours of service in a calendar year without a reduction of pension.
     (b) A retiree from plan 1 who enters employment with an employer at least three calendar months after his or her accrual date and:
     (i) Is hired into ((a position for which the employer has documented a justifiable need to hire a retiree into the position)) one of the following employment positions: Actuary, including an actuary associate, correctional health investigator, dentist, pharmacist, physician, public health advisor, radiation health physicist, or radiology technician;
     (ii) Is hired through the established process for the position with the approval of: A school board for a school district; the chief executive officer of a state agency employer; the secretary of the senate for the senate; the chief clerk of the house of representatives for the house of representatives; the secretary of the senate and the chief clerk of the house of representatives jointly for the joint legislative audit and review committee, the legislative transportation committee, the joint committee on pension policy, the legislative evaluation and accountability program, the legislative systems committee, and the statute law committee; or according to rules adopted for the rehiring of retired plan 1 members for a local government employer; and
     (iii) The employer retains records of the procedures followed and decisions made in hiring the retiree, and provides those records in the event of an audit; ((and
     (iv) The employee has not already rendered a cumulative total of more than one thousand nine hundred hours of service while in receipt of pension payments beyond an annual threshold of eight hundred sixty-seven hours;))
shall cease to receive pension payments while engaged in that service after the retiree has rendered service for more than one thousand five hundred hours in a calendar year. ((The one thousand nine hundred hour cumulative total under this subsection applies prospectively to those retiring after July 27, 2003, and retroactively to those who retired prior to July 27, 2003, and shall be calculated from the date of retirement.))
     (c) 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.
     (d) 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 eight hundred sixty-seven hours in a calendar year in an eligible position, as defined in RCW 41.32.010, 41.35.010, 41.37.010, 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 select committee on pension policy. By December 1st of each year, the department of personnel, the superintendent of public instruction, and any other employer listed in subsection (2)(b) of this section may recommend to the appropriate legislative fiscal committees a list of employment positions to be considered by the legislature for inclusion in subsection (2)(b) of this section. In the case of each position, the recommendation shall include a documented and justifiable need to hire retirees into that position.
     (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   A retiree from plan 1 of the public employees' retirement system who entered employment with an employer under RCW 41.40.037(2)(b) as it existed prior to its amendment by chapter . . ., Laws of 2005 (this act) may continue to receive pension payments under the terms and conditions of that statute until December 31, 2005.

NEW SECTION.  Sec. 6   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 7   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 immediately, except for section 4 of this act which takes effect July 1, 2006.

NEW SECTION.  Sec. 8   Section 3 of this act expires July 1, 2006.