BILL REQ. #: S-1221.2
State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 02/18/11. Referred to Committee on Ways & Means.
AN ACT Relating to providing school districts with temporary flexibility in implementing compensation adjustments made in the omnibus appropriations act; amending RCW 28A.305.140, 28A.400.200, and 41.35.010; reenacting and amending RCW 41.32.010 and 41.40.010; adding a new section to chapter 28A.400 RCW; creating a new section; providing expiration dates; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature acknowledges that despite
growing demands in other state programs, amply providing a program of
basic education remains the state's paramount duty. The legislature
understands the fiscal strain schools are currently under and
recognizes that the state cannot let funding impede its unified efforts
for continuing educational reform and the existing quality instruction
that is crucial to providing all students with the opportunity to
succeed.
The legislature recognizes that a key component of providing
quality instruction is providing funding for school employee salaries
that are at a sufficient level to attract and retain quality
individuals. The legislature finds that while compensation is a
component of basic education funding, the Washington supreme court has
recognized that compensation is a type of funding stream and not a
specific type of instructional program protected by the constitutional
mandate in Article IX of the state Constitution. The legislature
anticipates that like all state employees, state funding for
compensation of teachers, school administrators, and classified staff
will be reduced. The legislature does not believe such action
jeopardizes basic education since the salary sufficient to attract and
retain quality teachers in these times of high unemployment is assumed
to be a lesser amount.
In continued recognition of the importance of local control and an
emphasis on quality over quantity in Washington's performance-based
education system, the legislature finds that it must provide schools
additional flexibility to implement any reductions made in compensation
and judge for themselves how best to preserve the quality instructional
programs in their classrooms that best reflect the values of their
community. It is therefore the intent of the legislature to allow
school districts to have limited authority to waive the hour and day
requirements found in the state's basic education definition in order
to use state resources in the most efficient manner to provide
instruction in the essential academic learning requirements sufficient
to ensure students are provided the opportunities set forth in RCW
28A.150.200 and to respond to the demands and values of their own
communities.
NEW SECTION. Sec. 2 A new section is added to chapter 28A.400
RCW to read as follows:
(1) Each school district shall submit to the state board of
education a compensation adjustment plan explaining how the district
intends to achieve the compensation reductions in the 2011-2013 omnibus
appropriations act, excluding any reductions to the anticipated cost-of-living increases provided under RCW 28A.400.205 and any reductions
to national board bonuses provided under RCW 28A.405.415. In order to
provide school districts with maximum flexibility in implementing the
compensation reductions, the compensation adjustment plan of each
school district may include employee leave without pay, including
mandatory and voluntary temporary layoffs that result in a shortened
school year or reduced work day up to a maximum of five days. Any plan
that includes provisions for a shortened school year or reduced work
day must include a waiver request for the day or hour provisions of RCW
28A.150.200 through 28A.150.220, as appropriate, and must provide that
the school district will maintain a quality instructional program. Any
plan for a shortened school year or reduced work day must be applicable
to all full and part-time school district staff in a proportionally
equal manner in terms of number of days or hours of mandatory temporary
layoffs or employee leave without pay. For the purposes of determining
continuing health benefit eligibility during the applicability of the
compensation adjustment plan, an employee's hours shall be calculated
as if the reductions in hours or days required under the school
district plan did not occur.
(2) The compensation adjustment plan shall be made publicly
available on the school district's web site before submission to the
state board of education.
(3) This section expires September 1, 2013.
Sec. 3 RCW 28A.305.140 and 1990 c 33 s 267 are each amended to
read as follows:
(1)(a) The state board of education may grant waivers to school
districts from the provisions of RCW 28A.150.200 through 28A.150.220 on
the basis that such waiver or waivers are necessary to implement
successfully a local plan to provide for all students in the district
an effective education system that is designed to enhance the
educational program for each student. The local plan may include
alternative ways to provide effective educational programs for students
who experience difficulty with the regular education program.
(b) The state board shall adopt criteria to evaluate the need for
the waiver or waivers submitted under the authority of this subsection
(1).
(2) The state board of education shall grant waivers requested by
school districts to the day and hour provisions of RCW 28A.150.200
through 28A.150.220 on the basis that such waivers are necessary to
implement successfully the compensation adjustment plan submitted by
the district under the provisions of section 2 of this act, while
maintaining a quality instructional program. The state board of
education shall report to the legislature by December 1, 2013, a
summary of the number of waivers approved under this subsection and the
types of compensation adjustment plans submitted.
Sec. 4 RCW 28A.400.200 and 2010 c 235 s 401 are each amended to
read as follows:
(1) Every school district board of directors shall fix, alter,
allow, and order paid salaries and compensation for all district
employees in conformance with this section.
(2)(a) Salaries for certificated instructional staff shall not be
less than the salary provided in the appropriations act in the
statewide salary allocation schedule for an employee with a
baccalaureate degree and zero years of service; and
(b) Salaries for certificated instructional staff with a master's
degree shall not be less than the salary provided in the appropriations
act in the statewide salary allocation schedule for an employee with a
master's degree and zero years of service.
(3)(a) The actual average salary paid to certificated instructional
staff shall not exceed the district's average certificated
instructional staff salary used for the state basic education
allocations for that school year as determined pursuant to RCW
28A.150.410.
(b) Fringe benefit contributions for certificated instructional
staff shall be included as salary under (a) of this subsection only to
the extent that the district's actual average benefit contribution
exceeds the amount of the insurance benefits allocation provided per
certificated instructional staff unit in the state operating
appropriations act in effect at the time the compensation is payable.
For purposes of this section, fringe benefits shall not include payment
for unused leave for illness or injury under RCW 28A.400.210; employer
contributions for old age survivors insurance, workers' compensation,
unemployment compensation, and retirement benefits under the Washington
state retirement system; or employer contributions for health benefits
in excess of the insurance benefits allocation provided per
certificated instructional staff unit in the state operating
appropriations act in effect at the time the compensation is payable.
A school district may not use state funds to provide employer
contributions for such excess health benefits.
(c) Salary and benefits for certificated instructional staff in
programs other than basic education shall be consistent with the salary
and benefits paid to certificated instructional staff in the basic
education program.
(d) Until July 1, 2013, any temporary compensation reductions
included in the 2011-2013 omnibus appropriations act shall be
considered in determining actual average salary paid under (a) of this
subsection, unless the school district chooses to use the waiver
authority granted under section 2 of this act and RCW 28A.305.140 as
the manner in which to achieve the same reduction.
(4) Salaries and benefits for certificated instructional staff may
exceed the limitations in subsection (3) of this section only by
separate contract for additional time, for additional responsibilities,
for incentives, or for implementing specific measurable innovative
activities, including professional development, specified by the school
district to: (a) Close one or more achievement gaps, (b) focus on
development of science, technology, engineering, and mathematics (STEM)
learning opportunities, or (c) provide arts education. Beginning
September 1, 2011, school districts shall annually provide a brief
description of the innovative activities included in any supplemental
contract to the office of the superintendent of public instruction.
The office of the superintendent of public instruction shall summarize
the district information and submit an annual report to the education
committees of the house of representatives and the senate.
Supplemental contracts shall not cause the state to incur any present
or future funding obligation. Supplemental contracts shall be subject
to the collective bargaining provisions of chapter 41.59 RCW and the
provisions of RCW 28A.405.240, shall not exceed one year, and if not
renewed shall not constitute adverse change in accordance with RCW
28A.405.300 through 28A.405.380. No district may enter into a
supplemental contract under this subsection for the provision of
services which are a part of the basic education program required by
Article IX, section 3 of the state Constitution.
(5) Employee benefit plans offered by any district shall comply
with RCW 28A.400.350 ((and)), 28A.400.275, and 28A.400.280.
Sec. 5 RCW 41.32.010 and 2010 2nd sp.s. c 1 s 904 are each
reenacted and amended to read as follows:
As used in this chapter, unless a different meaning is plainly
required by the context:
(1)(a) "Accumulated contributions" for plan 1 members, means the
sum of all regular annuity contributions and, except for the purpose of
withdrawal at the time of retirement, any amount paid under RCW
41.50.165(2) with regular interest thereon.
(b) "Accumulated contributions" for plan 2 members, means the sum
of all contributions standing to the credit of a member in the member's
individual account, including any amount paid under RCW 41.50.165(2),
together with the regular interest thereon.
(2) "Actuarial equivalent" means a benefit of equal value when
computed upon the basis of such mortality tables and regulations as
shall be adopted by the director and regular interest.
(3) "Adjustment ratio" means the value of index A divided by index
B.
(4) "Annual increase" means, initially, fifty-nine cents per month
per year of service which amount shall be increased each July 1st by
three percent, rounded to the nearest cent.
(5) "Annuity" means the moneys payable per year during life by
reason of accumulated contributions of a member.
(6) "Average final compensation" for plan 2 and plan 3 members,
means the member's average earnable compensation of the highest
consecutive sixty service credit months prior to such member's
retirement, termination, or death. Periods constituting authorized
leaves of absence may not be used in the calculation of average final
compensation except under RCW 41.32.810(2).
(7)(a) "Beneficiary" for plan 1 members, means any person in
receipt of a retirement allowance or other benefit provided by this
chapter.
(b) "Beneficiary" for plan 2 and plan 3 members, means any person
in receipt of a retirement allowance or other benefit provided by this
chapter resulting from service rendered to an employer by another
person.
(8) "Contract" means any agreement for service and compensation
between a member and an employer.
(9) "Creditable service" means membership service plus prior
service for which credit is allowable. This subsection shall apply
only to plan 1 members.
(10) "Department" means the department of retirement systems
created in chapter 41.50 RCW.
(11) "Dependent" means receiving one-half or more of support from
a member.
(12) "Director" means the director of the department.
(13) "Disability allowance" means monthly payments during
disability. This subsection shall apply only to plan 1 members.
(14)(a) "Earnable compensation" for plan 1 members, means:
(i) All salaries and wages paid by an employer to an employee
member of the retirement system for personal services rendered during
a fiscal year. In all cases where compensation includes maintenance
the employer shall fix the value of that part of the compensation not
paid in money.
(ii) For an employee member of the retirement system teaching in an
extended school year program, two consecutive extended school years, as
defined by the employer school district, may be used as the annual
period for determining earnable compensation in lieu of the two fiscal
years.
(iii) "Earnable compensation" for plan 1 members also includes the
following actual or imputed payments, which are not paid for personal
services:
(A) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position, or payments by an employer
to an individual in lieu of reinstatement in a position which are
awarded or granted as the equivalent of the salary or wages which the
individual would have earned during a payroll period shall be
considered earnable compensation and the individual shall receive the
equivalent service credit.
(B) If a leave of absence, without pay, is taken by a member for
the purpose of serving as a member of the state legislature, and such
member has served in the legislature five or more years, the salary
which would have been received for the position from which the leave of
absence was taken shall be considered as compensation earnable if the
employee's contribution thereon is paid by the employee. In addition,
where a member has been a member of the state legislature for five or
more years, earnable compensation for the member's two highest
compensated consecutive years of service shall include a sum not to
exceed thirty-six hundred dollars for each of such two consecutive
years, regardless of whether or not legislative service was rendered
during those two years.
(iv) For members employed less than full time under written
contract with a school district, or community college district, in an
instructional position, for which the member receives service credit of
less than one year in all of the years used to determine the earnable
compensation used for computing benefits due under RCW 41.32.497,
41.32.498, and 41.32.520, the member may elect to have earnable
compensation defined as provided in RCW 41.32.345. For the purposes of
this subsection, the term "instructional position" means a position in
which more than seventy-five percent of the member's time is spent as
a classroom instructor (including office hours), a librarian, a
psychologist, a social worker, a nurse, a physical therapist, an
occupational therapist, a speech language pathologist or audiologist,
or a counselor. Earnable compensation shall be so defined only for the
purpose of the calculation of retirement benefits and only as necessary
to insure that members who receive fractional service credit under RCW
41.32.270 receive benefits proportional to those received by members
who have received full-time service credit.
(v) "Earnable compensation" does not include:
(A) Remuneration for unused sick leave authorized under RCW
41.04.340, 28A.400.210, or 28A.310.490;
(B) Remuneration for unused annual leave in excess of thirty days
as authorized by RCW 43.01.044 and 43.01.041.
(b) "Earnable compensation" for plan 2 and plan 3 members, means
salaries or wages earned by a member during a payroll period for
personal services, including overtime payments, and shall include wages
and salaries deferred under provisions established pursuant to sections
403(b), 414(h), and 457 of the United States Internal Revenue Code, but
shall exclude lump sum payments for deferred annual sick leave, unused
accumulated vacation, unused accumulated annual leave, or any form of
severance pay.
"Earnable compensation" for plan 2 and plan 3 members also includes
the following actual or imputed payments which, except in the case of
(b)(ii)(B) of this subsection, are not paid for personal services:
(i) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position or payments by an employer
to an individual in lieu of reinstatement in a position which are
awarded or granted as the equivalent of the salary or wages which the
individual would have earned during a payroll period shall be
considered earnable compensation, to the extent provided above, and the
individual shall receive the equivalent service credit.
(ii) In any year in which a member serves in the legislature the
member shall have the option of having such member's earnable
compensation be the greater of:
(A) The earnable compensation the member would have received had
such member not served in the legislature; or
(B) Such member's actual earnable compensation received for
teaching and legislative service combined. Any additional
contributions to the retirement system required because compensation
earnable under (b)(ii)(A) of this subsection is greater than
compensation earnable under (b)(ii)(B) of this subsection shall be paid
by the member for both member and employer contributions.
(c) In calculating earnable compensation under (a) or (b) of this
subsection, the department of retirement systems shall include any
compensation forgone by a member employed by a state agency or
institution during the 2009-2011 fiscal biennium or the 2011-2013
fiscal biennium as a result of reduced work hours, mandatory or
voluntary leave without pay, temporary reduction in pay implemented
prior to December 11, 2010, or temporary layoffs if the reduced
compensation is an integral part of the employer's expenditure
reduction efforts, as certified by the employer.
(15)(a) "Eligible position" for plan 2 members from June 7, 1990,
through September 1, 1991, means a position which normally requires two
or more uninterrupted months of creditable service during September
through August of the following year.
(b) "Eligible position" for plan 2 and plan 3 on and after
September 1, 1991, means a position that, as defined by the employer,
normally requires five or more months of at least seventy hours of
earnable compensation during September through August of the following
year.
(c) For purposes of this chapter an employer shall not define
"position" in such a manner that an employee's monthly work for that
employer is divided into more than one position.
(d) The elected position of the superintendent of public
instruction is an eligible position.
(16) "Employed" or "employee" means a person who is providing
services for compensation to an employer, unless the person is free
from the employer's direction and control over the performance of work.
The department shall adopt rules and interpret this subsection
consistent with common law.
(17) "Employer" means the state of Washington, the school district,
or any agency of the state of Washington by which the member is paid.
(18) "Fiscal year" means a year which begins July 1st and ends June
30th of the following year.
(19) "Former state fund" means the state retirement fund in
operation for teachers under chapter 187, Laws of 1923, as amended.
(20) "Index" means, for any calendar year, that year's annual
average consumer price index, Seattle, Washington area, for urban wage
earners and clerical workers, all items compiled by the bureau of labor
statistics, United States department of labor.
(21) "Index A" means the index for the year prior to the
determination of a postretirement adjustment.
(22) "Index B" means the index for the year prior to index A.
(23) "Index year" means the earliest calendar year in which the
index is more than sixty percent of index A.
(24) "Local fund" means any of the local retirement funds for
teachers operated in any school district in accordance with the
provisions of chapter 163, Laws of 1917 as amended.
(25) "Member" means any teacher included in the membership of the
retirement system who has not been removed from membership under RCW
41.32.878 or 41.32.768. Also, any other employee of the public schools
who, on July 1, 1947, had not elected to be exempt from membership and
who, prior to that date, had by an authorized payroll deduction,
contributed to the member reserve.
(26) "Member account" or "member's account" for purposes of plan 3
means the sum of the contributions and earnings on behalf of the member
in the defined contribution portion of plan 3.
(27) "Member reserve" means the fund in which all of the
accumulated contributions of members are held.
(28) "Membership service" means service rendered subsequent to the
first day of eligibility of a person to membership in the retirement
system: PROVIDED, That where a member is employed by two or more
employers the individual shall receive no more than one service credit
month during any calendar month in which multiple service is rendered.
The provisions of this subsection shall apply only to plan 1 members.
(29) "Pension" means the moneys payable per year during life from
the pension reserve.
(30) "Pension reserve" is a fund in which shall be accumulated an
actuarial reserve adequate to meet present and future pension
liabilities of the system and from which all pension obligations are to
be paid.
(31) "Plan 1" means the teachers' retirement system, plan 1
providing the benefits and funding provisions covering persons who
first became members of the system prior to October 1, 1977.
(32) "Plan 2" means the teachers' retirement system, plan 2
providing the benefits and funding provisions covering persons who
first became members of the system on and after October 1, 1977, and
prior to July 1, 1996.
(33) "Plan 3" means the teachers' retirement system, plan 3
providing the benefits and funding provisions covering persons who
first become members of the system on and after July 1, 1996, or who
transfer under RCW 41.32.817.
(34) "Prior service" means service rendered prior to the first date
of eligibility to membership in the retirement system for which credit
is allowable. The provisions of this subsection shall apply only to
plan 1 members.
(35) "Prior service contributions" means contributions made by a
member to secure credit for prior service. The provisions of this
subsection shall apply only to plan 1 members.
(36) "Public school" means any institution or activity operated by
the state of Washington or any instrumentality or political subdivision
thereof employing teachers, except the University of Washington and
Washington State University.
(37) "Regular contributions" means the amounts required to be
deducted from the compensation of a member and credited to the member's
individual account in the member reserve. This subsection shall apply
only to plan 1 members.
(38) "Regular interest" means such rate as the director may
determine.
(39) "Retiree" means any person who has begun accruing a retirement
allowance or other benefit provided by this chapter resulting from
service rendered to an employer while a member.
(40)(a) "Retirement allowance" for plan 1 members, means monthly
payments based on the sum of annuity and pension, or any optional
benefits payable in lieu thereof.
(b) "Retirement allowance" for plan 2 and plan 3 members, means
monthly payments to a retiree or beneficiary as provided in this
chapter.
(41) "Retirement system" means the Washington state teachers'
retirement system.
(42) "Separation from service or employment" occurs when a person
has terminated all employment with an employer. Separation from
service or employment does not occur, and if claimed by an employer or
employee may be a violation of RCW 41.32.055, when an employee and
employer have a written or oral agreement to resume employment with the
same employer following termination. Mere expressions or inquiries
about postretirement employment by an employer or employee that do not
constitute a commitment to reemploy the employee after retirement are
not an agreement under this section.
(43)(a) "Service" for plan 1 members means the time during which a
member has been employed by an employer for compensation.
(i) If a member is employed by two or more employers the individual
shall receive no more than one service credit month during any calendar
month in which multiple service is rendered.
(ii) As authorized by RCW 28A.400.300, up to forty-five days of
sick leave may be creditable as service solely for the purpose of
determining eligibility to retire under RCW 41.32.470.
(iii) As authorized in RCW 41.32.065, service earned in an out-of-state retirement system that covers teachers in public schools may be
applied solely for the purpose of determining eligibility to retire
under RCW 41.32.470.
(b) "Service" for plan 2 and plan 3 members, means periods of
employment by a member for one or more employers for which earnable
compensation is earned subject to the following conditions:
(i) A member employed in an eligible position or as a substitute
shall receive one service credit month for each month of September
through August of the following year if he or she earns earnable
compensation for eight hundred ten or more hours during that period and
is employed during nine of those months, except that a member may not
receive credit for any period prior to the member's employment in an
eligible position except as provided in RCW 41.32.812 and 41.50.132.
(ii) Any other member employed in an eligible position or as a
substitute who earns earnable compensation during the period from
September through August shall receive service credit according to one
of the following methods, whichever provides the most service credit to
the member:
(A) If a member is employed either in an eligible position or as a
substitute teacher for nine months of the twelve month period between
September through August of the following year but earns earnable
compensation for less than eight hundred ten hours but for at least six
hundred thirty hours, he or she will receive one-half of a service
credit month for each month of the twelve month period;
(B) If a member is employed in an eligible position or as a
substitute teacher for at least five months of a six-month period
between September through August of the following year and earns
earnable compensation for six hundred thirty or more hours within the
six-month period, he or she will receive a maximum of six service
credit months for the school year, which shall be recorded as one
service credit month for each month of the six-month period;
(C) All other members employed in an eligible position or as a
substitute teacher shall receive service credit as follows:
(I) A service credit month is earned in those calendar months where
earnable compensation is earned for ninety or more hours;
(II) A half-service credit month is earned in those calendar months
where earnable compensation is earned for at least seventy hours but
less than ninety hours; and
(III) A quarter-service credit month is earned in those calendar
months where earnable compensation is earned for less than seventy
hours.
(iii) Any person who is a member of the teachers' retirement system
and who is elected or appointed to a state elective position may
continue to be a member of the retirement system and continue to
receive a service credit month for each of the months in a state
elective position by making the required member contributions.
(iv) When an individual is employed by two or more employers the
individual shall only receive one month's service credit during any
calendar month in which multiple service for ninety or more hours is
rendered.
(v) As authorized by RCW 28A.400.300, up to forty-five days of sick
leave may be creditable as service solely for the purpose of
determining eligibility to retire under RCW 41.32.470. For purposes of
plan 2 and plan 3 "forty-five days" as used in RCW 28A.400.300 is equal
to two service credit months. Use of less than forty-five days of sick
leave is creditable as allowed under this subsection as follows:
(A) Less than eleven days equals one-quarter service credit month;
(B) Eleven or more days but less than twenty-two days equals one-half service credit month;
(C) Twenty-two days equals one service credit month;
(D) More than twenty-two days but less than thirty-three days
equals one and one-quarter service credit month;
(E) Thirty-three or more days but less than forty-five days equals
one and one-half service credit month.
(vi) As authorized in RCW 41.32.065, service earned in an out-of-state retirement system that covers teachers in public schools may be
applied solely for the purpose of determining eligibility to retire
under RCW 41.32.470.
(vii) The department shall adopt rules implementing this
subsection.
(44) "Service credit month" means a full service credit month or an
accumulation of partial service credit months that are equal to one.
(45) "Service credit year" means an accumulation of months of
service credit which is equal to one when divided by twelve.
(46) "State actuary" or "actuary" means the person appointed
pursuant to RCW 44.44.010(2).
(47) "State elective position" means any position held by any
person elected or appointed to statewide office or elected or appointed
as a member of the legislature.
(48) "Substitute teacher" means:
(a) A teacher who is hired by an employer to work as a temporary
teacher, except for teachers who are annual contract employees of an
employer and are guaranteed a minimum number of hours; or
(b) Teachers who either (i) work in ineligible positions for more
than one employer or (ii) work in an ineligible position or positions
together with an eligible position.
(49) "Teacher" means any person qualified to teach who is engaged
by a public school in an instructional, administrative, or supervisory
capacity. The term includes state, educational service district, and
school district superintendents and their assistants and all employees
certificated by the superintendent of public instruction; and in
addition thereto any full time school doctor who is employed by a
public school and renders service of an instructional or educational
nature.
Sec. 6 RCW 41.35.010 and 2003 c 157 s 1 are each amended to read
as follows:
The definitions in this section apply throughout this chapter,
unless the context clearly requires otherwise.
(1) "Retirement system" means the Washington school employees'
retirement system provided for in this chapter.
(2) "Department" means the department of retirement systems created
in chapter 41.50 RCW.
(3) "State treasurer" means the treasurer of the state of
Washington.
(4) "Employer," for plan 2 and plan 3 members, means a school
district or an educational service district.
(5) "Member" means any employee included in the membership of the
retirement system, as provided for in RCW 41.35.030.
(6)(a) "Compensation earnable" for plan 2 and plan 3 members, means
salaries or wages earned by a member during a payroll period for
personal services, including overtime payments, and shall include wages
and salaries deferred under provisions established pursuant to sections
403(b), 414(h), and 457 of the United States internal revenue code, but
shall exclude nonmoney maintenance compensation and lump sum or other
payments for deferred annual sick leave, unused accumulated vacation,
unused accumulated annual leave, or any form of severance pay.
(b) "Compensation earnable" for plan 2 and plan 3 members also
includes the following actual or imputed payments, which are not paid
for personal services:
(i) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position, or payments by an employer
to an individual in lieu of reinstatement, which are awarded or granted
as the equivalent of the salary or wage which the individual would have
earned during a payroll period shall be considered compensation
earnable to the extent provided in this subsection, and the individual
shall receive the equivalent service credit;
(ii) In any year in which a member serves in the legislature, the
member shall have the option of having such member's compensation
earnable be the greater of:
(A) The compensation earnable the member would have received had
such member not served in the legislature; or
(B) Such member's actual compensation earnable received for
nonlegislative public employment and legislative service combined. Any
additional contributions to the retirement system required because
compensation earnable under (b)(ii)(A) of this subsection is greater
than compensation earnable under this (b)(ii)(B) of this subsection
shall be paid by the member for both member and employer contributions;
(iii) Assault pay only as authorized by RCW 27.04.100, 72.01.045,
and 72.09.240;
(iv) Compensation that a member would have received but for a
disability occurring in the line of duty only as authorized by RCW
41.40.038;
(v) Compensation that a member receives due to participation in the
leave sharing program only as authorized by RCW 41.04.650 through
41.04.670; and
(vi) Compensation that a member receives for being in standby
status. For the purposes of this section, a member is in standby
status when not being paid for time actually worked and the employer
requires the member to be prepared to report immediately for work, if
the need arises, although the need may not arise.
(7) "Service" for plan 2 and plan 3 members means periods of
employment by a member in an eligible position or positions for one or
more employers for which compensation earnable is paid. Compensation
earnable earned for ninety or more hours in any calendar month shall
constitute one service credit month except as provided in RCW
41.35.180. Compensation earnable earned for at least seventy hours but
less than ninety hours in any calendar month shall constitute one-half
service credit month of service. Compensation earnable earned for less
than seventy hours in any calendar month shall constitute one-quarter
service credit month of service. Time spent in standby status, whether
compensated or not, is not service.
Any fraction of a year of service shall be taken into account in
the computation of such retirement allowance or benefits.
(a) Service in any state elective position shall be deemed to be
full-time service.
(b) A member shall receive a total of not more than twelve service
credit months of service for such calendar year. If an individual is
employed in an eligible position by one or more employers the
individual shall receive no more than one service credit month during
any calendar month in which multiple service for ninety or more hours
is rendered.
(c) For purposes of plan 2 and 3 "forty-five days" as used in RCW
28A.400.300 is equal to two service credit months. Use of less than
forty-five days of sick leave is creditable as allowed under this
subsection as follows:
(i) Less than eleven days equals one-quarter service credit month;
(ii) Eleven or more days but less than twenty-two days equals one-half service credit month;
(iii) Twenty-two days equals one service credit month;
(iv) More than twenty-two days but less than thirty-three days
equals one and one-quarter service credit month; and
(v) Thirty-three or more days but less than forty-five days equals
one and one-half service credit month.
(8) "Service credit year" means an accumulation of months of
service credit which is equal to one when divided by twelve.
(9) "Service credit month" means a month or an accumulation of
months of service credit which is equal to one.
(10) "Membership service" means all service rendered as a member.
(11) "Beneficiary" for plan 2 and plan 3 members means any person
in receipt of a retirement allowance or other benefit provided by this
chapter resulting from service rendered to an employer by another
person.
(12) "Regular interest" means such rate as the director may
determine.
(13) "Accumulated contributions" means the sum of all contributions
standing to the credit of a member in the member's individual account,
including any amount paid under RCW 41.50.165(2), together with the
regular interest thereon.
(14)(a) "Average final compensation" for plan 2 and plan 3 members
means the member's average compensation earnable of the highest
consecutive sixty months of service credit months prior to such
member's retirement, termination, or death. Periods constituting
authorized leaves of absence may not be used in the calculation of
average final compensation except under RCW 41.40.710(2).
(b) In calculating earnable compensation under (a) or (b) of this
subsection, the department of retirement systems shall include any
compensation forgone by a member employed by a state agency or
institution during the 2011-2013 fiscal biennium as a result of reduced
work hours, mandatory or voluntary leave without pay, temporary
reduction in pay implemented before December 11, 2010, or temporary
layoffs if the reduced compensation is an integral part of the
employer's expenditure reduction efforts, as certified by the employer.
(15) "Final compensation" means the annual rate of compensation
earnable by a member at the time of termination of employment.
(16) "Annuity" means payments for life derived from accumulated
contributions of a member. All annuities shall be paid in monthly
installments.
(17) "Pension" means payments for life derived from contributions
made by the employer. All pensions shall be paid in monthly
installments.
(18) "Retirement allowance" for plan 2 and plan 3 members means
monthly payments to a retiree or beneficiary as provided in this
chapter.
(19) "Employee" or "employed" means a person who is providing
services for compensation to an employer, unless the person is free
from the employer's direction and control over the performance of work.
The department shall adopt rules and interpret this subsection
consistent with common law.
(20) "Actuarial equivalent" means a benefit of equal value when
computed upon the basis of such mortality and other tables as may be
adopted by the director.
(21) "Retirement" means withdrawal from active service with a
retirement allowance as provided by this chapter.
(22) "Eligible position" means any position that, as defined by the
employer, normally requires five or more months of service a year for
which regular compensation for at least seventy hours is earned by the
occupant thereof. For purposes of this chapter an employer shall not
define "position" in such a manner that an employee's monthly work for
that employer is divided into more than one position.
(23) "Ineligible position" means any position which does not
conform with the requirements set forth in subsection (22) of this
section.
(24) "Leave of absence" means the period of time a member is
authorized by the employer to be absent from service without being
separated from membership.
(25) "Retiree" means any person who has begun accruing a retirement
allowance or other benefit provided by this chapter resulting from
service rendered to an employer while a member.
(26) "Director" means the director of the department.
(27) "State elective position" means any position held by any
person elected or appointed to statewide office or elected or appointed
as a member of the legislature.
(28) "State actuary" or "actuary" means the person appointed
pursuant to RCW 44.44.010(2).
(29) "Plan 2" means the Washington school employees' retirement
system plan 2 providing the benefits and funding provisions covering
persons who first became members of the public employees' retirement
system on and after October 1, 1977, and transferred to the Washington
school employees' retirement system under RCW 41.40.750.
(30) "Plan 3" means the Washington school employees' retirement
system plan 3 providing the benefits and funding provisions covering
persons who first became members of the system on and after September
1, 2000, or who transfer from plan 2 under RCW 41.35.510.
(31) "Index" means, for any calendar year, that year's annual
average consumer price index, Seattle, Washington area, for urban wage
earners and clerical workers, all items, compiled by the bureau of
labor statistics, United States department of labor.
(32) "Index A" means the index for the year prior to the
determination of a postretirement adjustment.
(33) "Index B" means the index for the year prior to index A.
(34) "Adjustment ratio" means the value of index A divided by index
B.
(35) "Separation from service" occurs when a person has terminated
all employment with an employer.
(36) "Member account" or "member's account" for purposes of plan 3
means the sum of the contributions and earnings on behalf of the member
in the defined contribution portion of plan 3.
(37) "Classified employee" means an employee of a school district
or an educational service district who is not eligible for membership
in the teachers' retirement system established under chapter 41.32 RCW.
(38) "Substitute employee" means a classified employee who is
employed by an employer exclusively as a substitute for an absent
employee.
Sec. 7 RCW 41.40.010 and 2010 2nd sp.s. c 1 s 906 are each
reenacted and amended to read as follows:
As used in this chapter, unless a different meaning is plainly
required by the context:
(1) "Accumulated contributions" means the sum of all contributions
standing to the credit of a member in the member's individual account,
including any amount paid under RCW 41.50.165(2), together with the
regular interest thereon.
(2) "Actuarial equivalent" means a benefit of equal value when
computed upon the basis of such mortality and other tables as may be
adopted by the director.
(3) "Adjustment ratio" means the value of index A divided by index
B.
(4) "Annual increase" means, initially, fifty-nine cents per month
per year of service which amount shall be increased each July 1st by
three percent, rounded to the nearest cent.
(5) "Annuity" means payments for life derived from accumulated
contributions of a member. All annuities shall be paid in monthly
installments.
(6)(a) "Average final compensation" for plan 1 members, means the
annual average of the greatest compensation earnable by a member during
any consecutive two year period of service credit months for which
service credit is allowed; or if the member has less than two years of
service credit months then the annual average compensation earnable
during the total years of service for which service credit is allowed.
(b) "Average final compensation" for plan 2 and plan 3 members,
means the member's average compensation earnable of the highest
consecutive sixty months of service credit months prior to such
member's retirement, termination, or death. Periods constituting
authorized leaves of absence may not be used in the calculation of
average final compensation except under RCW 41.40.710(2) or (c) of this
subsection.
(c) In calculating average final compensation under this subsection
for a member of plan 1, 2, or 3, the department of retirement systems
shall include any compensation forgone by the member during the 2009-2011 fiscal biennium or the 2011-2013 fiscal biennium as a result of
reduced work hours, voluntary leave without pay, temporary reduction in
pay implemented prior to December 11, 2010, or temporary furloughs if
the reduced compensation is an integral part of the employer's
expenditure reduction efforts, as certified by the employer.
(7)(a) "Beneficiary" for plan 1 members, means any person in
receipt of a retirement allowance, pension or other benefit provided by
this chapter.
(b) "Beneficiary" for plan 2 and plan 3 members, means any person
in receipt of a retirement allowance or other benefit provided by this
chapter resulting from service rendered to an employer by another
person.
(8)(a) "Compensation earnable" for plan 1 members, means salaries
or wages earned during a payroll period for personal services and where
the compensation is not all paid in money, maintenance compensation
shall be included upon the basis of the schedules established by the
member's employer.
(i) "Compensation earnable" for plan 1 members also includes the
following actual or imputed payments, which are not paid for personal
services:
(A) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position, or payments by an employer
to an individual in lieu of reinstatement in a position which are
awarded or granted as the equivalent of the salary or wage which the
individual would have earned during a payroll period shall be
considered compensation earnable and the individual shall receive the
equivalent service credit;
(B) If a leave of absence is taken by an individual for the purpose
of serving in the state legislature, the salary which would have been
received for the position from which the leave of absence was taken,
shall be considered as compensation earnable if the employee's
contribution is paid by the employee and the employer's contribution is
paid by the employer or employee;
(C) Assault pay only as authorized by RCW 27.04.100, 72.01.045, and
72.09.240;
(D) Compensation that a member would have received but for a
disability occurring in the line of duty only as authorized by RCW
41.40.038;
(E) Compensation that a member receives due to participation in the
leave sharing program only as authorized by RCW 41.04.650 through
41.04.670; and
(F) Compensation that a member receives for being in standby
status. For the purposes of this section, a member is in standby
status when not being paid for time actually worked and the employer
requires the member to be prepared to report immediately for work, if
the need arises, although the need may not arise.
(ii) "Compensation earnable" does not include:
(A) Remuneration for unused sick leave authorized under RCW
41.04.340, 28A.400.210, or 28A.310.490;
(B) Remuneration for unused annual leave in excess of thirty days
as authorized by RCW 43.01.044 and 43.01.041.
(b) "Compensation earnable" for plan 2 and plan 3 members, means
salaries or wages earned by a member during a payroll period for
personal services, including overtime payments, and shall include wages
and salaries deferred under provisions established pursuant to sections
403(b), 414(h), and 457 of the United States Internal Revenue Code, but
shall exclude nonmoney maintenance compensation and lump sum or other
payments for deferred annual sick leave, unused accumulated vacation,
unused accumulated annual leave, or any form of severance pay.
"Compensation earnable" for plan 2 and plan 3 members also includes
the following actual or imputed payments, which are not paid for
personal services:
(i) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position, or payments by an employer
to an individual in lieu of reinstatement in a position which are
awarded or granted as the equivalent of the salary or wage which the
individual would have earned during a payroll period shall be
considered compensation earnable to the extent provided above, and the
individual shall receive the equivalent service credit;
(ii) In any year in which a member serves in the legislature, the
member shall have the option of having such member's compensation
earnable be the greater of:
(A) The compensation earnable the member would have received had
such member not served in the legislature; or
(B) Such member's actual compensation earnable received for
nonlegislative public employment and legislative service combined. Any
additional contributions to the retirement system required because
compensation earnable under (b)(ii)(A) of this subsection is greater
than compensation earnable under (b)(ii)(B) of this subsection shall be
paid by the member for both member and employer contributions;
(iii) Assault pay only as authorized by RCW 27.04.100, 72.01.045,
and 72.09.240;
(iv) Compensation that a member would have received but for a
disability occurring in the line of duty only as authorized by RCW
41.40.038;
(v) Compensation that a member receives due to participation in the
leave sharing program only as authorized by RCW 41.04.650 through
41.04.670; and
(vi) Compensation that a member receives for being in standby
status. For the purposes of this section, a member is in standby
status when not being paid for time actually worked and the employer
requires the member to be prepared to report immediately for work, if
the need arises, although the need may not arise.
(9) "Department" means the department of retirement systems created
in chapter 41.50 RCW.
(10) "Director" means the director of the department.
(11) "Eligible position" means:
(a) Any position that, as defined by the employer, normally
requires five or more months of service a year for which regular
compensation for at least seventy hours is earned by the occupant
thereof. For purposes of this chapter an employer shall not define
"position" in such a manner that an employee's monthly work for that
employer is divided into more than one position;
(b) Any position occupied by an elected official or person
appointed directly by the governor, or appointed by the chief justice
of the supreme court under RCW 2.04.240(2) or 2.06.150(2), for which
compensation is paid.
(12) "Employee" or "employed" means a person who is providing
services for compensation to an employer, unless the person is free
from the employer's direction and control over the performance of work.
The department shall adopt rules and interpret this subsection
consistent with common law.
(13)(a) "Employer" for plan 1 members, means every branch,
department, agency, commission, board, and office of the state, any
political subdivision or association of political subdivisions of the
state admitted into the retirement system, and legal entities
authorized by RCW 35.63.070 and 36.70.060 or chapter 39.34 RCW; and the
term shall also include any labor guild, association, or organization
the membership of a local lodge or division of which is comprised of at
least forty percent employees of an employer (other than such labor
guild, association, or organization) within this chapter. The term may
also include any city of the first class that has its own retirement
system.
(b) "Employer" for plan 2 and plan 3 members, means every branch,
department, agency, commission, board, and office of the state, and any
political subdivision and municipal corporation of the state admitted
into the retirement system, including public agencies created pursuant
to RCW 35.63.070, 36.70.060, and 39.34.030; except that after August
31, 2000, school districts and educational service districts will no
longer be employers for the public employees' retirement system plan 2.
(14) "Final compensation" means the annual rate of compensation
earnable by a member at the time of termination of employment.
(15) "Index" means, for any calendar year, that year's annual
average consumer price index, Seattle, Washington area, for urban wage
earners and clerical workers, all items, compiled by the bureau of
labor statistics, United States department of labor.
(16) "Index A" means the index for the year prior to the
determination of a postretirement adjustment.
(17) "Index B" means the index for the year prior to index A.
(18) "Index year" means the earliest calendar year in which the
index is more than sixty percent of index A.
(19) "Ineligible position" means any position which does not
conform with the requirements set forth in subsection (11) of this
section.
(20) "Leave of absence" means the period of time a member is
authorized by the employer to be absent from service without being
separated from membership.
(21) "Member" means any employee included in the membership of the
retirement system, as provided for in RCW 41.40.023. RCW 41.26.045
does not prohibit a person otherwise eligible for membership in the
retirement system from establishing such membership effective when he
or she first entered an eligible position.
(22) "Member account" or "member's account" for purposes of plan 3
means the sum of the contributions and earnings on behalf of the member
in the defined contribution portion of plan 3.
(23) "Membership service" means:
(a) All service rendered, as a member, after October 1, 1947;
(b) All service after October 1, 1947, to any employer prior to the
time of its admission into the retirement system for which member and
employer contributions, plus interest as required by RCW 41.50.125,
have been paid under RCW 41.40.056 or 41.40.057;
(c) Service not to exceed six consecutive months of probationary
service rendered after April 1, 1949, and prior to becoming a member,
in the case of any member, upon payment in full by such member of the
total amount of the employer's contribution to the retirement fund
which would have been required under the law in effect when such
probationary service was rendered if the member had been a member
during such period, except that the amount of the employer's
contribution shall be calculated by the director based on the first
month's compensation earnable as a member;
(d) Service not to exceed six consecutive months of probationary
service, rendered after October 1, 1947, and before April 1, 1949, and
prior to becoming a member, in the case of any member, upon payment in
full by such member of five percent of such member's salary during said
period of probationary service, except that the amount of the
employer's contribution shall be calculated by the director based on
the first month's compensation earnable as a member.
(24) "New member" means a person who becomes a member on or after
April 1, 1949, except as otherwise provided in this section.
(25) "Original member" of this retirement system means:
(a) Any person who became a member of the system prior to April 1,
1949;
(b) Any person who becomes a member through the admission of an
employer into the retirement system on and after April 1, 1949, and
prior to April 1, 1951;
(c) Any person who first becomes a member by securing employment
with an employer prior to April 1, 1951, provided the member has
rendered at least one or more years of service to any employer prior to
October 1, 1947;
(d) Any person who first becomes a member through the admission of
an employer into the retirement system on or after April 1, 1951,
provided, such person has been in the regular employ of the employer
for at least six months of the twelve-month period preceding the said
admission date;
(e) Any member who has restored all contributions that may have
been withdrawn as provided by RCW 41.40.150 and who on the effective
date of the individual's retirement becomes entitled to be credited
with ten years or more of membership service except that the provisions
relating to the minimum amount of retirement allowance for the member
upon retirement at age seventy as found in RCW 41.40.190(4) shall not
apply to the member;
(f) Any member who has been a contributor under the system for two
or more years and who has restored all contributions that may have been
withdrawn as provided by RCW 41.40.150 and who on the effective date of
the individual's retirement has rendered five or more years of service
for the state or any political subdivision prior to the time of the
admission of the employer into the system; except that the provisions
relating to the minimum amount of retirement allowance for the member
upon retirement at age seventy as found in RCW 41.40.190(4) shall not
apply to the member.
(26) "Pension" means payments for life derived from contributions
made by the employer. All pensions shall be paid in monthly
installments.
(27) "Plan 1" means the public employees' retirement system, plan
1 providing the benefits and funding provisions covering persons who
first became members of the system prior to October 1, 1977.
(28) "Plan 2" means the public employees' retirement system, plan
2 providing the benefits and funding provisions covering persons who
first became members of the system on and after October 1, 1977, and
are not included in plan 3.
(29) "Plan 3" means the public employees' retirement system, plan
3 providing the benefits and funding provisions covering persons who:
(a) First become a member on or after:
(i) March 1, 2002, and are employed by a state agency or institute
of higher education and who did not choose to enter plan 2; or
(ii) September 1, 2002, and are employed by other than a state
agency or institute of higher education and who did not choose to enter
plan 2; or
(b) Transferred to plan 3 under RCW 41.40.795.
(30) "Prior service" means all service of an original member
rendered to any employer prior to October 1, 1947.
(31) "Regular interest" means such rate as the director may
determine.
(32) "Retiree" means any person who has begun accruing a retirement
allowance or other benefit provided by this chapter resulting from
service rendered to an employer while a member.
(33) "Retirement" means withdrawal from active service with a
retirement allowance as provided by this chapter.
(34) "Retirement allowance" means the sum of the annuity and the
pension.
(35) "Retirement system" means the public employees' retirement
system provided for in this chapter.
(36) "Separation from service" occurs when a person has terminated
all employment with an employer. Separation from service or employment
does not occur, and if claimed by an employer or employee may be a
violation of RCW 41.40.055, when an employee and employer have a
written or oral agreement to resume employment with the same employer
following termination. Mere expressions or inquiries about
postretirement employment by an employer or employee that do not
constitute a commitment to reemploy the employee after retirement are
not an agreement under this subsection.
(37)(a) "Service" for plan 1 members, except as provided in RCW
41.40.088, means periods of employment in an eligible position or
positions for one or more employers rendered to any employer for which
compensation is paid, and includes time spent in office as an elected
or appointed official of an employer. Compensation earnable earned in
full time work for seventy hours or more in any given calendar month
shall constitute one service credit month except as provided in RCW
41.40.088. Compensation earnable earned for less than seventy hours in
any calendar month shall constitute one-quarter service credit month of
service except as provided in RCW 41.40.088. Only service credit
months and one-quarter service credit months shall be counted in the
computation of any retirement allowance or other benefit provided for
in this chapter. Any fraction of a year of service shall be taken into
account in the computation of such retirement allowance or benefits.
Time spent in standby status, whether compensated or not, is not
service.
(i) Service by a state employee officially assigned by the state on
a temporary basis to assist another public agency, shall be considered
as service as a state employee: PROVIDED, That service to any other
public agency shall not be considered service as a state employee if
such service has been used to establish benefits in any other public
retirement system.
(ii) An individual shall receive no more than a total of twelve
service credit months of service during any calendar year. If an
individual is employed in an eligible position by one or more employers
the individual shall receive no more than one service credit month
during any calendar month in which multiple service for seventy or more
hours is rendered.
(iii) A school district employee may count up to forty-five days of
sick leave as creditable service solely for the purpose of determining
eligibility to retire under RCW 41.40.180 as authorized by RCW
28A.400.300. For purposes of plan 1 "forty-five days" as used in RCW
28A.400.300 is equal to two service credit months. Use of less than
forty-five days of sick leave is creditable as allowed under this
subsection as follows:
(A) Less than twenty-two days equals one-quarter service credit
month;
(B) Twenty-two days equals one service credit month;
(C) More than twenty-two days but less than forty-five days equals
one and one-quarter service credit month.
(b) "Service" for plan 2 and plan 3 members, means periods of
employment by a member in an eligible position or positions for one or
more employers for which compensation earnable is paid. Compensation
earnable earned for ninety or more hours in any calendar month shall
constitute one service credit month except as provided in RCW
41.40.088. Compensation earnable earned for at least seventy hours but
less than ninety hours in any calendar month shall constitute one-half
service credit month of service. Compensation earnable earned for less
than seventy hours in any calendar month shall constitute one-quarter
service credit month of service. Time spent in standby status, whether
compensated or not, is not service.
Any fraction of a year of service shall be taken into account in
the computation of such retirement allowance or benefits.
(i) Service in any state elective position shall be deemed to be
full time service, except that persons serving in state elective
positions who are members of the Washington school employees'
retirement system, teachers' retirement system, public safety
employees' retirement system, or law enforcement officers' and
firefighters' retirement system at the time of election or appointment
to such position may elect to continue membership in the Washington
school employees' retirement system, teachers' retirement system,
public safety employees' retirement system, or law enforcement
officers' and firefighters' retirement system.
(ii) A member shall receive a total of not more than twelve service
credit months of service for such calendar year. If an individual is
employed in an eligible position by one or more employers the
individual shall receive no more than one service credit month during
any calendar month in which multiple service for ninety or more hours
is rendered.
(iii) Up to forty-five days of sick leave may be creditable as
service solely for the purpose of determining eligibility to retire
under RCW 41.40.180 as authorized by RCW 28A.400.300. For purposes of
plan 2 and plan 3 "forty-five days" as used in RCW 28A.400.300 is equal
to two service credit months. Use of less than forty-five days of sick
leave is creditable as allowed under this subsection as follows:
(A) Less than eleven days equals one-quarter service credit month;
(B) Eleven or more days but less than twenty-two days equals one-half service credit month;
(C) Twenty-two days equals one service credit month;
(D) More than twenty-two days but less than thirty-three days
equals one and one-quarter service credit month;
(E) Thirty-three or more days but less than forty-five days equals
one and one-half service credit month.
(38) "Service credit month" means a month or an accumulation of
months of service credit which is equal to one.
(39) "Service credit year" means an accumulation of months of
service credit which is equal to one when divided by twelve.
(40) "State actuary" or "actuary" means the person appointed
pursuant to RCW 44.44.010(2).
(41) "State elective position" means any position held by any
person elected or appointed to statewide office or elected or appointed
as a member of the legislature.
(42) "State treasurer" means the treasurer of the state of
Washington.
(43) "Totally incapacitated for duty" means total inability to
perform the duties of a member's employment or office or any other work
for which the member is qualified by training or experience.
NEW SECTION. Sec. 8 Sections 3 and 4 of this act expire
September 1, 2013.
NEW SECTION. Sec. 9 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.