BILL REQ. #:  S-1178.3 

Read first time 02/14/13.   Referred to Committee on Ways & Means.

     AN ACT Relating to membership in the Washington public safety employees' retirement system for employees at city and county corrections departments, public corrections entities, the department of corrections, and the department of social and health services who provide direct care to, or ensure the custody and safety of, offender and patient populations; amending RCW 41.37.010; and adding a new section to chapter 41.37 RCW.

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

Sec. 1   RCW 41.37.010 and 2012 c 236 s 5 are each amended to read as follows:
     The definitions in this section apply throughout this chapter, unless the context clearly requires otherwise.
     (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) "Annuity" means payments for life derived from accumulated contributions of a member. All annuities shall be paid in monthly installments.
     (5)(a) "Average final compensation" 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 41.37.290.
     (b) In calculating average final compensation under (a) of this subsection, the department of retirement systems shall include:
     (i) Any compensation forgone by a member employed by a state agency or institution during the 2009-2011 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; and
     (ii) Any compensation forgone by a member employed by the state or a local government employer during the 2011-2013 fiscal biennium as a result of reduced work hours, mandatory leave without pay, temporary layoffs, or reductions to current pay if the reduced compensation is an integral part of the employer's expenditure reduction efforts, as certified by the employer. Reductions to current pay shall not include elimination of previously agreed upon future salary increases.
     (6) "Beneficiary" 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.
     (7)(a) "Compensation earnable" for 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 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 (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 41.37.060;
     (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.
     (8) "Department" means the department of retirement systems created in chapter 41.50 RCW.
     (9) "Director" means the director of the department.
     (10) "Eligible position" means any permanent, full-time position included in subsection (19) of this section.
     (11) "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.
     (12) "Employer" means the Washington state department of corrections, the Washington state parks and recreation commission, the Washington state gambling commission, the Washington state patrol, the Washington state department of natural resources, ((and)) the Washington state liquor control board, and the Washington state department of social and health services; any county corrections department; any city corrections department not covered under chapter 41.28 RCW; and any public corrections entity created under RCW 39.34.030 by counties, cities not covered under chapter 41.28 RCW, or both. Except as otherwise specifically provided in this chapter, "employer" does not include a government contractor. For purposes of this subsection, a "government contractor" is any entity, including a partnership, limited liability company, for-profit or nonprofit corporation, or person, that provides services pursuant to a contract with an employer. The determination whether an employer-employee relationship has been established is not based on the relationship between a government contractor and an employer, but is based solely on the relationship between a government contractor's employee and an employer under this chapter.
     (13) "Final compensation" means the annual rate of compensation earnable by a member at the time of termination of employment.
     (14) "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.
     (15) "Index A" means the index for the year prior to the determination of a postretirement adjustment.
     (16) "Index B" means the index for the year prior to index A.
     (17) "Ineligible position" means any position which does not conform with the requirements set forth in subsection (10) of this section.
     (18) "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.
     (19) "Member" means any employee employed by an employer on a full-time basis:
     (a) Who is in a position that requires completion of a certified criminal justice training course and is authorized by their employer to arrest, conduct criminal investigations, enforce the criminal laws of the state of Washington, and carry a firearm as part of the job;
     (b) Whose primary responsibility is to ensure the custody and security of incarcerated or probationary individuals as a corrections officer, probation officer, or jailer;
     (c) Who is a limited authority Washington peace officer, as defined in RCW 10.93.020, for an employer; ((or))
     (d) Whose primary responsibility is to provide direct care to, or ensure the custody and safety of, offender and patient populations, and who is in a position that requires completion of defensive tactics training or de-escalation training, and who is employed by one of the following state institutions or centers:
     (i) Juvenile rehabilitation administration;
     (ii) Mental health hospitals;
     (iii) Child study and treatment center;
     (iv) Special commitment center;
     (v) Institutions or residential sites that serve developmentally disabled patients or offenders;
     (e) Whose primary responsibility is to provide direct care to, or ensure the custody and safety of, offender and patient populations, and who is employed by a city or county corrections department as set forth in subsection (12) of this section, a public corrections entity as set forth in subsection (12) of this section, or the Washington state department of corrections; or
     (f) Whose primary responsibility is to supervise members eligible under this subsection.
     (20) "Membership service" means all service rendered as a member.
     (21) "Pension" means payments for life derived from contributions made by the employer. All pensions shall be paid in monthly installments.
     (22) "Plan" means the Washington public safety employees' retirement system plan 2.
     (23) "Regular interest" means such rate as the director may determine.
     (24) "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.
     (25) "Retirement" means withdrawal from active service with a retirement allowance as provided by this chapter.
     (26) "Retirement allowance" means monthly payments to a retiree or beneficiary as provided in this chapter.
     (27) "Retirement system" means the Washington public safety employees' retirement system provided for in this chapter.
     (28) "Separation from service" occurs when a person has terminated all employment with an employer.
     (29) "Service" means periods of employment by a member on or after July 1, 2006, 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. 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.
     (30) "Service credit month" means a month or an accumulation of months of service credit which is equal to one.
     (31) "Service credit year" means an accumulation of months of service credit which is equal to one when divided by twelve.
     (32) "State actuary" or "actuary" means the person appointed pursuant to RCW 44.44.010(2).
     (33) "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.
     (34) "State treasurer" means the treasurer of the state of Washington.

NEW SECTION.  Sec. 2   A new section is added to chapter 41.37 RCW to read as follows:
     (1) An employee of an employer as defined in RCW 41.37.010(12) who was a member of the public employees' retirement system plan 2 or plan 3 before January 1, 2014, and on January 1, 2014, meets the eligibility requirements as set forth in RCW 41.37.010(19), has the following options during the election period defined in subsection (2) of this section:
     (a) Remain in the public employees' retirement system; or
     (b) Become a member of the public safety employees' retirement system plan 2 and, be a dual member as provided in chapter 41.54 RCW, and public employees' retirement system service credit may not be transferred to the public safety employees' retirement system.
     (2) The "election period" is the period between January 1, 2014, and March 1, 2014.
     (3) A member of the public employees' retirement system plan 2 or plan 3 who has previously had the opportunity to transfer to the public safety employees' retirement system is not eligible to become a member of the public safety employees' retirement system during the election period.
     (4) During the election period, employees who are employed by an employer as defined in RCW 41.37.010(12) remain members of the public employees' retirement system plan 2 or plan 3, until they elect to join the public safety employees' retirement system. Members who elect to join the public safety employees' retirement system as described in this section will have their membership begin prospectively from the date of their election.
     (5) If after March 1, 2014, the member has not made an election to join the public safety employees' retirement system he or she will remain in the public employees' retirement system plan 2 or plan 3.
     (6) An employee who was a member of the public employees' retirement system plan 1 on or before January 1, 2014, and on or after January 1, 2014, is employed by an employer as defined in RCW 41.37.010(12) as an employee who meets the eligibility requirements included in RCW 41.37.010(19), shall remain a member of the public employees' retirement system plan 1.
     (7) All new employees hired on or after January 1, 2014, who become employed by an employer as defined in RCW 41.37.010(12) as an employee who meets the eligibility requirements included in RCW 41.37.010(19) will become members of the public safety employees' retirement system.