FINAL BILL REPORT

HB 1560

                                   C 59 L 88

BYRepresentatives Sayan and Grimm; by request of Department of Retirement Systems

Modifying public retirement benefits for persons who have attained age seventy and one-half and are still employed.

House Committe on Ways & Means/Appropriations

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

The Federal Tax Reform Act of 1986 includes a provision requiring a person to begin receiving all pension and retirement benefits no later than April 1 of the year following the year in which individual reaches age 70 1/2.  The requirement applies even if the individual is still employed.  Individuals who do not begin receiving their pension benefits by the required age are subject to a 50 percent tax on the amount that would have been paid if the person had retired.

SUMMARY:

Members of the Judicial, Judges, Law Enforcement Officers and Firefighters, Teachers, Public Employees and State Patrol Retirement Systems with five or more years of service and age 70 1/2 may apply for their retirement benefit.  The benefit is calculated in accordance with the rules of the system to which the member belongs, except that the member may continue to be employed.  During employment the member will make contributions to the system and receive service credit.  When the member separates from service his or her benefit will be recalculated taking into consideration the additional service credit and compensation.  The act applies only to persons who attain age 70 1/2 on or after January 1, 1988.

VOTES ON FINAL PASSAGE:

      House 96   0     

      Senate    46     0

EFFECTIVE:January 1, 1989