FINAL BILL REPORT

SHB 2643

                                  C 249 L 90

BYHouse Committee on Appropriations (originally sponsored by Representatives Hine, D. Sommers, Sayan, McLean, H. Sommers, Silver, R. King, Anderson, Winsley and Spanel; by request of Joint Committee on Pension Policy)

Changing survivorship options for members of state retirement systems.

House Committe on Appropriations

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

When a member retires from one of the state retirement systems other than the Law Enforcement Officers' and Fire Fighters' plan I (LEOFF I) or the Washington State Patrol Retirement System (WSPRS), he or she can opt for a reduced benefit in exchange for survivor benefits.  However, the member is limited to selecting between a benefit in which the survivor receives an amount equal to the member's full monthly benefit and a benefit in which the survivor receives one-half the member's benefit.

If a member of one of the state retirement systems, other than LEOFF I or WSPRS, takes a disability retirement, he or she cannot opt for a reduced monthly benefit with a survivor benefit.  This provides an incentive for members to remain in their jobs even though their physical condition indicates that disability retirement is appropriate.

There are no provisions requiring a member to obtain his or her spouse's consent prior to selecting a retirement option.  Failure to obtain spousal consent conflicts with community property policy because, to the extent that the benefit was earned during the marriage, the nonmember spouse has a property interest in the benefit.

SUMMARY:

The statutory state retirement system survivor benefit options are repealed.  The Department of Retirement Systems is given authority to adopt the survivor benefit options that the department deems reasonable.  The department must adopt at least the two survivor options contained in the repealed statute.  All options offered must be actuarially equivalent to the standard allowance (the benefit payment stream that does not include a survivor benefit).

Disability retirees under the Judicial Retirement System, Law Enforcement Officers and Firefighters Retirement System Plan I, Teachers Retirement System, and Public Employees Retirement System are given the same survivor options as service retirees.

Members are required to obtain spousal consent to the retirement benefit payment option chosen.  If the member and his or her spouse cannot agree on a benefit payment option, a joint and 50 percent survivor option will be paid to the member with the nonmember spouse being named as the beneficiary.

VOTES ON FINAL PASSAGE:

      House 81   0

      Senate    48     0 (Senate amended)

      Senate    47     0 (Senate receded)

EFFECTIVE:June 7, 1990