SENATE BILL REPORT

HB 802

BYRepresentatives Unsoeld, Nutley, Brough, May and Schoon

Revising provisions governing tax deferred annuities for educational employees.

House Committe on Financial Institutions & Insurance

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):February 18, 1988

Majority Report:     Do pass.

     Signed by Senators von Reichbauer, Chairman; West, Vice Chairman; Johnson, Kreidler, McCaslin, Rasmussen, Sellar.

Senate Staff:Benson Porter (786-7470)

                February 19, 1988

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE, FEBRUARY 18, 1988

BACKGROUND:

The board of directors of any school district, the Washington State Teachers' Retirement System, the Superintendent of Public Instruction, educational service district superintendents, and regents or trustees of any of the state's institutions of higher education may provide tax deferred annuities for their employees in lieu of a portion of the employees' salary or wages. However, the statute authorizing tax deferred annuities for employees of institutions of higher education does not contain provisions that permit employees to choose the company that will provide the annuity. In addition, the statutes governing annuities for employees of public schools and institutions of higher education do not define "tax deferred annuities" and do not authorize the purchase of annuities from securities salespersons.

SUMMARY:

Tax deferred annuities authorized for public school employees and employees of institutions of higher education are defined as any investment permitted under the federal statute governing tax deferred annuities. These investment products may be purchased from either insurance agents or securities salespersons.

Employees of institutions of higher education are permitted to choose the company that will provide tax deferred annuity contracts. The procedures for choosing the company and for solicitation by agents and salespersons are the same procedures as are provided for public school employees.

Appropriation:  none

Revenue:   none

Fiscal Note:    none requested

Senate Committee - Testified:   Alan Corwin (for)