BILL REQ. #:  Z-0884.3 

Read first time 01/12/2006.   Referred to Committee on Ways & Means.

     AN ACT Relating to payment of the unfunded actuarial accrued liability in plan 1 of the public employees' retirement system and plan 1 of the teachers' retirement system; adding a new section to chapter 41.45 RCW; and providing an effective date.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 41.45 RCW to read as follows:
     (1) It is the intent of the legislature to provide for the systematic payment of the plan 1 unfunded actuarial accrued liability in a manner that promotes contribution rate adequacy and stability for the affected systems. This change in funding policy requires a three-year phase-in of contribution rates beginning in 2006. The phase-in rates for the plan 1 unfunded actuarial accrued liability are in addition to the phase-in rates established pursuant to RCW 41.45.062.
     (2) Beginning July 1, 2006, a 0.87 percent contribution is established as part of the basic state and employer contribution rate for the public employees' retirement system and the public safety employees' retirement system, to be used for the sole purpose of amortizing the unfunded actuarial accrued liability in the public employees' retirement system plan 1.
     (3) Beginning September 1, 2006, a 0.87 percent contribution is established as part of the basic state and employer contribution rate for the school employees' retirement system, to be used for the sole purpose of amortizing the unfunded actuarial accrued liability in the public employees' retirement system plan 1.
     (4) Beginning September 1, 2006, a 1.29 percent contribution is established as part of the basic state and employer contribution rate for the teachers' retirement system, to be used for the sole purpose of amortizing the unfunded actuarial accrued liability in the teachers' retirement system plan 1.
     (5) Upon completion of the 2005 actuarial valuation, the pension funding council and the state actuary shall review the contribution rates for the plan 1 unfunded actuarial accrued liability for 2007-2008 and 2008-2009 and by September 30, 2006, the pension funding council shall adopt contribution rates to complete the three-year phase-in schedule, adjusted for any material changes in benefits or actuarial assumptions, methods, and experience. The expected present value of projected contributions during the three-year phase-in period shall be the same as the expected present value of projected contributions that would have been collected without the phase-in, as determined by the state actuary and adjusted for any material changes in benefits or actuarial assumptions, methods, or experience.

NEW SECTION.  Sec. 2   This act takes effect July 1, 2006.