H-3035.3

HOUSE BILL 2333


State of Washington	64th Legislature	2016 Regular Session

By Representatives Reykdal, S. Hunt, and Bergquist

Prefiled 01/05/16. Read first time 01/11/16. Referred to Committee on Appropriations.

AN ACT Relating to providing a choice between membership in the public employees' retirement system plans 2 and 3 for employees age twenty-five or less in subsequent terms of employment; and amending RCW 41.40.785 and 41.54.010.

(1) All employees who first become employed by an employer in an eligible position on or after March 1, 2002, for state agencies or institutes of higher education, or September 1, 2002, for other employers, shall have a period of ninety days to make an irrevocable choice to become a member of plan 2 or plan 3. At the end of ninety days, if the member has not made a choice to become a member of plan 2, he or she becomes a member of plan 3.

(2) For administrative efficiency, until a member elects to become a member of plan 3, or becomes a member of plan 3 by default pursuant to subsection (1) of this section, the member shall be reported to the department in plan 2, with member and employer contributions. Upon becoming a member of plan 3 by election or by default, all service credit shall be transferred to the member's plan 3 defined benefit, and all employee accumulated contributions shall be transferred to the member's plan 3 defined contribution account.

(3) Employees may choose to earn future service credit as a member of plan 2 or plan 3 if they are (a) age twenty-five or less, (b) validly separated from employment from an employer, and (c) subsequently employed by a different employer in an eligible position. The member must make the choice of plan 2 or plan 3 during the same ninety-day period for which contribution rate choice is available under RCW 41.34.040(3)(d). If the member does not choose to change membership from the plan in which he or she earned service prior to the change of employers within this ninety-day period, he or she shall remain in the plan he or she participated in prior to changing employers. If the member chooses to change plans, they are considered a dual member pursuant to chapter 41.54 RCW.

(4) For administrative efficiency, until a member elects to remain in their prior plan, defaults into their prior plan, or elects a new plan pursuant to subsection (3) of this section, the member shall be reported to the department in their prior plan, with member and employer contributions.

(1) "Base salary" means salaries or wages earned by a member of a system during a payroll period for personal services and includes wages and salaries deferred under provisions of the United States internal revenue code, but shall exclude overtime payments, nonmoney maintenance compensation, and lump sum payments for deferred annual sick leave, unused accumulated vacation, unused accumulated annual leave, any form of severance pay, any bonus for voluntary retirement, any other form of leave, or any similar lump sum payment; except that forms of payment which are excluded under this subsection shall be included in base salary when reportable to the department in all of a dual member's retirement systems, and when none of the dual member's retirement systems are the Washington state patrol retirement system.

(4) "Dual member" means a person who (a) is or becomes a member of a system on or after July 1, 1988, (b) has been a member of one or more other systems or plans, and (c) has never been retired for service from a retirement system and is not receiving a disability retirement or disability leave benefit from any retirement system listed in RCW 41.50.030 or subsection (6) of this section.

(5) "Service" means the same as it may be defined in each respective system. For the purposes of RCW 41.54.030, military service granted under RCW 41.40.170(3) or 43.43.260 may only be based on service accrued under chapter 41.40 or 43.43 RCW, respectively.

(6) "System" means the retirement systems or plans established under chapters 41.32, 41.40, 41.44, 41.35, 41.37, and 43.43 RCW; plan 2 of the system established under chapter 41.26 RCW; and the city employee retirement systems for Seattle, Tacoma, and Spokane.