FINAL BILL REPORT

SB 5380

                                  C 455 L 87

BYSenators Gaspard, Saling, Warnke, von Reichbauer, Vognild, Johnson, Bottiger, Conner, Bauer, Stratton, Nelson, Newhouse and Rasmussen

Providing cost-of-living adjustment of retirement benefits.

Senate Committee on Ways & Means

House Committe on Ways & Means/Appropriations

SYNOPSIS AS ENACTED

BACKGROUND:

The Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS) do not have an operative post-retirement adjustment provision.  Both systems, however, have a retirement allowance floor to assure the retiree of a minimum level for subsistence.  This minimum benefit was revised in 1986 when it was increased to $13 per month per year of service.

Prior to 1957 teachers were not covered by Social Security.  Approximately 210 members of the Teacher's Retirement System (TRS) retired prior to becoming eligible for Social Security.  Of these, approximately 170 members have obtained some type of Social Security benefits, primarily in the form of survivor benefits.  Approximately 40 retired teachers receive no social security benefits.  These retirees receive a special TRS pension of $7 per month per year of service.

SUMMARY:

The minimum benefit of PERS and TRS is increased from $13 to $13.50 per month per year of service.  Beginning July 1, 1988, this minimum benefit will be automatically adjusted annually by the value of the ratio of:  (a) the Consumer Price Index (urban wage earners, clerical workers, all items--Seattle) for the calendar year prior to date of determination to (b) the CPI for calendar year 1986.  The initial adjustment is limited to 3.0 percent, it may not exceed 3.0 percent of the previous year's adjustment, and any adjustment may not lower the minimum benefit below $13.50 per month per year of service.

The special benefit received by those teachers not receiving Social Security is increased from $7 to $10 per month per year of service.

Appropriation:    $7.1 million from the general fund-state.

VOTES ON FINAL PASSAGE:

      Senate    48     0

      House 98   0 (House amended)

      Senate             (Senate refused to concur)

Free Conference Committee

      House 96   0

      Senate    45     1

EFFECTIVE:July 1, 1987