SENATE BILL REPORT
SB 6264
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 of February 5, 2016
Title: An act relating to allowing certain law enforcement officers' and firefighters' plan 2 retirees to purchase annuities.
Brief Description: Allowing certain law enforcement officers' and firefighters' plan 2 retirees to purchase annuities.
Sponsors: Senators Dammeier, Conway, Bailey, Rivers, Hasegawa, O'Ban, Frockt, Schoesler, Darneille, Liias and Rolfes; by request of LEOFF Plan 2 Retirement Board.
Brief History:
Committee Activity: Ways & Means: 2/04/16.
SENATE COMMITTEE ON WAYS & MEANS |
Staff: Steve Jones (786-7440)
Background: Members of Plan 2 of the Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF 2) are eligible for a retirement allowance at age 53 that is equal to 2 percent times the member's years of service times the member's average final compensation. Members of LEOFF 2 may add up to five years of service credit for the calculation of their retirement allowance by paying the actuarial equivalent value of the increase in the member's benefit. Subject to rules adopted by the Department of Retirement Systems (DRS), the payment can be made with a lump sum payment, an eligible or direct rollover, or a trustee-to-trustee transfer from an eligible retirement plan.
Many members of LEOFF 2 also participate in employer-sponsored tax-deferred savings plans established under sections 401(a), 403(b), and 457 of the federal Internal Revenue Code.
Under legislation enacted in 2014, at the time of retirement, members of LEOFF 2 may purchase an optional actuarially equivalent life annuity from the LEOFF 2 fund with a minimum payment of $25,000. The payment may be made through an eligible or direct rollover, or trustee-to-trustee transfer from a tax-qualified plan offered by a governmental employer.
Summary of Bill: Members of LEOFF 2 who retired prior to June 1, 2014, may purchase an optional actuarially equivalent life annuity from the LEOFF 2 fund with a minimum payment of $25,000. The payment may be made through an eligible or direct rollover, or trustee-to-trustee transfer from a tax-qualified plan offered by a governmental employer.
DRS must adopt rules regarding eligible rollovers and transfers to ensure they comply with federal requirements and that the rollovers and transfers are conditioned on the receipt of information needed by DRS to determine their eligibility for tax-free treatment under federal tax law.
Appropriation: None.
Fiscal Note: Available.
Committee/Commission/Task Force Created: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony: PRO: The bill provides a one-time window for annuity purchases. This legislation has been endorsed by the LEOFF Plan 2 Retirement Board and is authorized by federal law. Supporters of the bill also support inclusion of LEOFF Plan 1 members and members of the Washington State Patrol Retirement System.
Persons Testifying: PRO: Steve Nelson, LEOFF Plan 2 Retirement Board; Bob Thurston, WSP retiree; Richard Warbouck, Retired Firefighters of WA.
Persons Signed In To Testify But Not Testifying: No one.