SB 6655

SENATE BILL REPORT
SB 6655

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Reported By Senate Committee On:
Ways & Means, February 12, 2008

Title: An act relating to the transfer of public employees' retirement system plan 2 members to the school employees' retirement system plan 2.

Brief Description: Transferring public employees' retirement system plan 2 members to the school employees' retirement system plan 2.

Sponsors: Senators Schoesler, Holmquist, Murray, Fraser and Rasmussen; by request of Select Committee on Pension Policy.

Majority Report: Do pass.Signed by Senators Fraser, Vice Chair, Capital Budget Chair; Pridemore, Vice Chair, Operating Budget; Zarelli, Ranking Minority Member; Brandland, Carrell, Hatfield, Hewitt, Hobbs, Honeyford, Keiser, Kohl-Welles, Parlette, Rasmussen, Regala, Roach, Rockefeller, Schoesler and Tom.

Background: The Public Employees' Retirement System Plans 2 and 3 (PERS 2/3) provides the broadest eligibility rules of Washington State retirement system plans. All regularly compensated employees and appointed and elected officials of included employers first employed on or after October 1, 1977, are members of PERS plan 2/3 unless they fall under a specific exemption. Covered employers include all state agencies and subdivisions and most local government employees not employed by the cities of Seattle, Tacoma, and Spokane. If public employees normally work enough to meet the minimum eligibility standards, at least five months in which 70 or more hours are worked, per year, and are not members of another Washington State plan they generally enter PERS 2/3.

The School Employees' Retirement System (SERS) opened on September 1, 2000. At that date, all employees of a school district or an educational service district (educational employees) that were previously in PERS Plan 2 became members of SERS Plan 2, and automatically had their service and account history transferred into SERS Plan 2. The provision that automatically transfers service credit and account history remains in effect, so that an individual that has worked in a PERS Plan 2 eligible position prior to September 1, 2000 will have his or her service credit transferred to SERS Plan 2 if the individual works in an eligible position for a SERS employer, even on a part-time basis.

The provisions of SERS Plan 2 and PERS Plan 2 are similar. However, if the plans develop different features in the future, a conflict may arise if a PERS Plan 2 member with service dating back before the creation of SERS Plan 2 does not wish to have service automatically transferred because of the differences between the plans.

Summary of Bill: The transfer of service credit from PERS Plan 2 to SERS Plan 2 upon a member's employment in a SERS Plan 2 eligible position is ended July 1, 2008. Members of Plan 2 that have had service credit transferred from PERS Plan 2 to SERS Plan 2, but did not earn service credit for employment with an educational employer prior to September 1, 2000, have the option of applying to the Department of Retirement Systems between September 1, 2008 and November 30, 2008, to move service transferred to SERS Plan 2 back into PERS Plan 2.

Effective Date: Ninety days after adjournment of session in which bill is passed.