SENATE BILL REPORT
SB 5140
BYSenators Talmadge, Newhouse, McDermott, Moore and Hayner
Revising provisions on judicial retirement.
Senate Committee on Ways & Means
Senate Hearing Date(s):February 19, 1987; March 9, 1987
Majority Report: Do pass.
Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bluechel, Hayner, Lee, McDonald, Moore, Rinehart, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.
Minority Report: Do not pass.
Signed by Senator Rasmussen.
Senate Staff:Charles Langen (786-7715)
March 9, 1987
AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 9, 1987
BACKGROUND:
In February 1937 the Judges' Retirement System (Judges) was established for the judges of the Superior Court, Court of Appeals and Supreme Court. In August 1971, Judges was capped and the new members of the Superior Court, Court of Appeals and Supreme Court became members of the Judicial Retirement System (JRS). Among the provisions of the Judges System are the following:
1. Service retirement eligibility - (a) 18 years of credited service; or (b) attainment of age 70 and 10 years of credited service.
2. Final average salary (FAS) - the salary at time of retirement or at the end of the term immediately prior to retirement.
3. Retirement benefit - (a) 50.0 percent of FAS; (b) if service is in excess of 18 years, an added benefit based on 1/18th of FAS for each year with a maximum of 75.0 percent of FAS; (c) if service is at least 12 years but less than 18 years, a percentage of 50.0 percent of FAS equal to the proportion of years of service and 18; (d) a minimum benefit of $10 per month per year of service.
4. Death in service - the surviving spouse is to receive 50.0 percent of the retirement allowance the member would have been eligible to receive, provided the spouse was married to the member for at least three years at the time of death.
5. Contributions - both the judge and the employer contribute 6.5 percent of compensation (with 50.0 percent of the Superior Court employer contribution paid by the county) and the state pays the current benefits to retirees (i.e., pay-as-you- go).
6. Withdrawal of contributions - not allowed.
Within JRS, among the provisions are:
1. Service retirement - (a) must have attained age 60 and completed 15 years of service; or (b) mandatory at age 70.
2. Final average salary (FAS) - the salary attached to the position held immediately prior to retirement if serving in the same court for the 12 months preceding retirement; or the average 24 months compensation in the last 10 years of service.
3. Retirement Benefit - (a) 3.0 percent of FAS for each year of service of at least 10 years but less than 15 years; or (b) 3.5 percent of FAS if 15 or more years of service, except that the benefit may not exceed 75.0 percent of FAS.
4. Death in service - if the member had at least 10 years of service, a benefit is provided to the surviving spouse of 50.0 percent of the retirement allowance the member would have been eligible to receive, or 25.0 percent of FAS, whichever is the greater, if the spouse was married to the member for at least two years. The benefit is reduced if the surviving spouse has additional income exceeding 50.0 percent of the allowance so that the combination of income equals the retirement benefit; and the benefit terminates upon remarriage of the surviving spouse.
5. Contributions - both the judge and the state contribute 7.5 percent of compensation and the state pays the current benefits to retirees (i.e., pay-as-you-go).
6. Withdrawal of contributions - not allowed.
7. Membership - after February 23, 1984, a newly elected or appointed judge has 30 days to choose retirement coverage under JRS. If this choice is not made, the judge becomes a member of the Public Employees' Retirement System, Tier II (PERS II).
SUMMARY:
In both Judges and JRS, the following revisions are made:
1. For those not remarried as of the effective date of the act, the spousal death benefit is not terminated upon subsequent remarriage.
2. Upon death in service and when there is not a surviving spouse or an ineligible surviving spouse on account of the length of the marriage, the member's contributions are to distributed according to the following order: (a) a person or person having an insurable interest nominated by the judge, except this nomination may be revised prior to death upon a change in marital status or reentry into membership; (b) if no one nominated, to the ineligible surviving spouse; and (c) if no such spouse, to the judge's legal representatives.
3. Withdrawal of contribution upon termination of service is allowed, except the Director, Department of Retirement Systems, may withhold payment of such contributions for six months after cessation of membership. Withdrawal is not allowed if the member goes to another court in which JRS membership is required, or if the person becomes reemployed as a judge either before 30 days after termination of employment or before receiving the contributions.
4. Upon reentering judicial service, the withdrawn contributions may be restored either within five years after resumption of service or prior to retirement, whichever occurs first.
5. If a retired judge dies prior to the pay-out of the judge's member contributions through the retirement benefit and the judge has no surviving spouse or an ineligible surviving spouse, the remaining balance of member contributions will be distributed as provided in the death in service benefit.
6. The benefit of a retired judge will cease the first day of an appointment or election to the Superior Court, Court of Appeals or Supreme Court. Pro tempore service, however, is not to be considered as an appointment. Upon subsequent retirement, the judge's benefit is to be recomputed or restored, except the resulting benefit cannot be lower than the original benefit.
Within Judges, the marriage requirement for a spouse to be eligible for survivor benefits is revised to two years.
Within JRS, the system is capped as of the effective date of the bill and all new members will become members of PERS II. The service requirement is revised to completing 15 years of service with the benefit not available until attaining age 60.
Within PERS, "judges" are defined as judges of the District Court, Superior Court, Court of Appeals or Supreme Court. The retirement benefit for judges is to be computed using a 3.0 percent factor in the benefit formula. Judge members and their employers in either PERS I or PERS II will be required to contribute 150.0 percent of the contribution amount required for non-judge PERS II members and employers. If a judge member became a member of PERS I or PERS II prior to the effective date of this bill such a member has the option of making up the difference in contributions required in order to obtain the 3.0 percent formula factor in the computation of their retirement benefit.
The limitation on other income earned by the retired member or the surviving spouse as well as the limitation on pro tempore service is repealed. The provisions for determining benefits for retired members in Judges and the spousal benefits are also repealed.
Fiscal Note: available
Senate Committee - Testified: Don Brazier; John Fattorini, Washington State Bar Association