SENATE BILL REPORT

ESHB 1128

BYHouse Committee on Ways & Means/Appropriations (originally sponsored by Representatives H. Sommers, Niemi, Allen, Miller, Rust, Basich, Sayan, Bristow, Rayburn and Winsley)

Revising the calculation of retirement benefits of part-time teachers.

House Committe on Ways & Means/Appropriations

Senate Committee on Ways & Means

Senate Hearing Date(s):April 3, 1987

Majority Report:  Do pass.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Craswell, Fleming, Moore, Rinehart, Saling, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:Charles Langen (786-7715)

                  April 3, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, APRIL 3, 1987

BACKGROUND:

1) The Teacher's Retirement System (TRS) covers teachers and other certificated school employees.  TRS, Plan I (TRS I) allows part time employees to earn proportional service credit; it is the only state retirement system which does so. Part-time employees in TRS II and the other plan II systems receive no service credit unless they work more than ninety (90) hours a month.

2) Prior to 1984 the TRS benefit formula had an unintended negative impact on all TRS I members who worked on a part-time basis during the years which were used to calculate their retirement allowance.  Generally, those members received retirement allowances which were less than proportionate to the allowances they would receive had they worked full-time.  For example, a teacher who retired after a career of working half-time at half the regular salary received one-quarter of the retirement allowance that he or she would have received for full-time work over the same period.

3) In 1984 TRS I was amended so that part time school district (K-12) teachers could have their benefit calculated using an artificial full-time salary rather than the part-time salary actually received.  The intent of the 1984 change was to provide those K-12 teachers who regularly worked on a part-time basis with a retirement allowance that was proportional to their part- time service.  Part-time counselors, librarians, and community college faculty were not covered by the 1984 change.

SUMMARY:

The Teacher's Retirement System, Plan I (TRS I) is changed so that TRS I members who are school district librarians and counselors, and community college faculty (including librarians and counselors) who have worked on a part- time basis may receive retirement allowances proportionate to the allowances they would have received had they worked full-time.  Thus, a member who retires after working half- time at half the regular salary should be able to receive one- half of the retirement allowance that he or she would have received for full-time work over the same period.  To be eligible to receive this increased allowance, the retiree must have served in an instructional position where more than 75 percent of his or her work was spent in classroom instruction (which may include formally scheduled office hours) or as a counselor or librarian.

In order to ensure that no member is allowed to use the hypothetical "full-time salary" to unfairly inflate the member's retirement allowance, eligibility criteria are provided and the department of retirement systems is granted the broadest possible rule-making authority. (As recognized in Sanchez v. Labor and Industries, 39 Wn.App. 80, (1984).)

The Legislature may amend or revoke the new benefit provided by the act as to members who have not yet retired.

Fiscal Note:      none requested

Senate Committee - Testified: No one