BILL REQ. #:  S-1773.1 

Read first time 02/18/09.   Referred to Committee on Ways & Means.

     AN ACT Relating to preserving the fully funded status of certain closed plans within the state retirement systems; amending RCW 43.33A.110; and adding a new section to chapter 41.45 RCW.

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) In actuarial valuation reports for plan 1 of the public employees' retirement system, plan 1 of the teachers' retirement system, and plan 1 of the law enforcement officers' and firefighters' retirement system, the state actuary shall report the funded status of each plan on a market value basis, using the ratio of the market value of assets to the market value of liabilities. The state actuary shall measure the market value of liabilities as if all of the plan's projected obligations were settled on the valuation date.
     (2) When the state actuary determines that any plan listed in subsection (1) of this section has become fully funded on a market value basis, he or she shall:
     (a) Notify the state investment board; and
     (b) Make recommendations to the council regarding any new methods or assumptions for the plan. Any changes adopted by the council shall be subject to revision by the legislature.

Sec. 2   RCW 43.33A.110 and 1994 c 154 s 310 are each amended to read as follows:
     The state investment board may make appropriate rules and regulations for the performance of its duties. The board shall establish investment policies and procedures designed exclusively to maximize return at a prudent level of risk. However, in the case of the department of labor and industries' accident, medical aid, and reserve funds, the board shall establish investment policies and procedures designed to attempt to limit fluctuations in industrial insurance premiums and, subject to this purpose, to maximize return at a prudent level of risk; and when any plan listed in section 1 of this act becomes fully funded on a market value basis as determined by the state actuary, the board shall establish investment policies and procedures designed to preserve the fully funded status of the plan and, subject to this purpose, to maximize return at a prudent level of risk. The board shall adopt rules to ensure that its members perform their functions in compliance with chapter 42.52 RCW. Rules adopted by the board shall be adopted pursuant to chapter 34.05 RCW.