AN ACT Relating to cost-of-living adjustments of retirement benefits; amending RCW 41.32.485, 41.32.4931, and 41.40.198; making an appropriation; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 2, chapter 96, Laws of 1979 ex. sess. as amended by section 2, chapter 306, Laws of 1986 and RCW 41.32.485 are each amended to read as follows:

(1) Notwithstanding any provision of law to the contrary, effective July 1, ((~~1986~~)) 1987, as a cost-of-living adjustment, no beneficiary receiving a retirement allowance pursuant to this chapter shall receive, as the pension portion of that retirement allowance, less than ((~~thirteen~~)) fourteen dollars per month for each year of service creditable to the person whose service is the basis of the pension. Portions of a year shall be treated as fractions of a year and the decimal equivalent shall be multiplied by ((~~thirteen~~)) fourteen dollars. Where the pension payable was adjusted at the time benefit payments to the beneficiary commenced, the minimum pension provided in this section shall be adjusted in a manner consistent with that adjustment.

(2) Notwithstanding any provision of law to the contrary, effective July 1, 1979, the retirement allowance of each beneficiary who either is receiving benefits pursuant to RCW 41.32.520 or 41.32.550 as of December 31, 1978, or commenced receiving a monthly retirement allowance under this chapter as of a date no later than July 1, 1974, shall be permanently increased by a post-retirement adjustment. This adjustment shall be in lieu of any adjustments provided under RCW 41.32.499(6) as of July 1, 1979, or July 1, 1980, for the affected beneficiaries. Such adjustment shall be calculated as follows:

(a) Retirement allowances to which this subsection and subsection (1) of this section are both applicable shall be determined by first applying subsection (1) and then applying this subsection. The department shall determine the total years of creditable service and the total dollar benefit base accrued as of December 31, 1978, except that this determination shall take into account only those beneficiaries to whom this subsection applies;

(b) The department shall multiply the total benefits determined in (a) of this subsection by six percent and divide the dollar value thus determined by the total service determined in (a) of this subsection. The resultant figure shall then be a post-retirement increase factor which shall be applied as specified in (c) of this subsection;

(c) Each beneficiary to whom this subsection applies shall receive an increase which is the product of the factor determined in (b) of this subsection multiplied by the years of creditable service.

(3) The provisions of subsections (1) and (2) of this section shall not be applicable to those receiving benefits pursuant to RCW 41.32.540 or 41.32.760 through 41.32.825.

Sec. 2. Section 6, chapter 151, Laws of 1967 as amended by section 3, chapter 32, Laws of 1973 2nd ex. sess. and RCW 41.32.4931 are each amended to read as follows:

(1) ((Any former member of the teachers' retirement system or a former fund who is receiving a retirement allowance for service or disability on July 1, 1967, shall upon application approved by the board of trustees of the retirement system receive a pension of five dollars and fifty cents per month for each year of creditable service established with the retirement system: PROVIDED, That such former members who were retired pursuant to option 2 or option 3 of RCW 41.32.530 shall upon like application receive a pension which is actuarially equivalent under said option to the benefits provided in this section: PROVIDED FURTHER, That)) The benefits provided under subsection (2) of this section shall be available only to former members who have reached age sixty-five or are disabled for further public school service and are not receiving federal old age, survivors or disability benefit payments (social security) and are not able to qualify for such benefits((~~: PROVIDED FURTHER, That anyone qualifying for benefits pursuant to this section shall not receive a smaller pension than he was receiving prior to July 1, 1967~~)).

(2) Effective ((~~the first day of the month following the effective date of this 1973 amendatory act~~)) July 1, 1987, former members who ((~~have qualified for and have been granted benefits under~~)) receive the minimum retirement allowance provided by RCW 41.32.485(1) and who meet the requirements of subsection (1) of this section shall receive an additional special pension of ((~~three~~)) ten dollars per month per year of service credit. ((Such special pension shall be in addition to the minimum pension provided by RCW 41.32.497 and the cost-of-living increases provided under section 9, chapter 189, Laws of 1973 1st ex. sess., RCW 41.32.499.))

Sec. 3. Section 1, chapter 96, Laws of 1979 ex. sess. as amended by section 3, chapter 306, Laws of 1986 and RCW 41.40.198 are each amended to read as follows:

(2) The provisions of subsection (1) of this section shall not be applicable to those receiving benefits pursuant to RCW 41.40.220(1), 41.44.170(5), or 41.40.610 through 41.40.740. For persons who served as elected officials and whose accumulated employee contributions and credited interest was less than seven hundred fifty dollars at the time of retirement, the minimum benefit under subsection (1) of this section shall be ten dollars per month for each year of creditable service.

NEW SECTION. Sec. 4. There is appropriated eight million two hundred thousand dollars, or so much thereof as may be necessary, from the general fund for the biennium ending June 30, 1989, for the purposes of paying the cost-of-living adjustments provided in sections 1 and 3 of this act. Of this amount, three million eight hundred thousand dollars shall be deposited in the teachers' retirement fund and four million four hundred thousand dollars shall be deposited in the public employees' retirement fund.

NEW SECTION. Sec. 5. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1987.