HOUSE BILL REPORT

SSB 6600

BYSenate Committee on Ways & Means (originally sponsored by Senators Gaspard and McDonald; by request of Economic and Revenue Forecast Council)

Modifying contribution rates to the state retirement systems.

House Committe on Appropriations

Majority Report:  Do pass.  (25)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Belcher, Bowman, Brekke, Brough, Dorn, Ebersole, Ferguson, Hine, Inslee, May, McLean, Nealey, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

House Staff:Randy Acker (786-7153)

AS PASSED HOUSE FEBRUARY 27, 1990

BACKGROUND:

The basic state contribution rate for the Law Enforcement Officers' and Fire Fighters Retirement System (LEOFF), and the basic employer contribution rate for the Public Employees' Retirement System (PERS), the Teachers Retirement System (TRS), and the Washington State Patrol Retirement System (WSPRS) were established by law in 1989 and required to be utilized in the governor's proposed budget and the final appropriations act. The rates set in statute are 7.10 percent for PERS, 12.60 percent for TRS, 16.88 percent for LEOFF, and 21.47 percent for WSPRS. These rates take effect September 1, 1990 and apply to both Plan I and Plan II membership.

Supplemental rates are added for additional benefits provided through legislation, and supplemental rates have been added to accommodate COLA provisions adopted in 1989.

The Economic and Revenue Forecast Council adopts the economic assumptions (i.e., interest rates and inflation) used by the State Actuary in conducting valuation studies of the state retirement systems.  Beginning September 1, 1989, and every six years thereafter, the State Actuary submits to the council information regarding the experience and financial condition of each of the state retirement systems.  After review of this information, the council has recommended to the Legislature revisions to amortize the unfunded liabilities of LEOFF, PERS, TRS, and WSPRS by the year 2024 and to continue fully funding the Plan II portions of LEOFF, PERS, and TRS.

SUMMARY:

The basic contribution rates for the state retirement systems are adjusted to reflect the recommendations of the Economic Forecast Council.  The rates are 7.47 percent for Public Employees' Retirement System, 12.60 percent for Teachers Retirement System, 16.44 percent for Law Enforcement Officers' and Fire Fighters Retirement System, and 15.53 percent for Washington State Patrol Retirement System.

The current supplemental rate adjustments, which were added to amortize the cost of the 1989 session COLAs, are included in the proposed rates.

Fiscal Note:      Available.

Effective Date:The bill takes effect September 1, 1991.

House Committee ‑ Testified For:    No one.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    None.

House Committee - Testimony Against:      None.