SENATE BILL REPORT

SJR 8214

BYSenators Metcalf, Amondson and Benitz

Requiring funding of pension systems on an actuarially sound basis.

Senate Committee on Ways & Means

Senate Hearing Date(s):

Senate Staff:Charles Langen (786-7715)

AS OF FEBRUARY 13, 1989

BACKGROUND:

The statutes governing the state's retirement systems each contain provisions for funding.  These provisions, however, do not require that the full funding inherent in these funding provisions be absolutely followed by the Legislature or the governing body.

SUMMARY:

Article VIII of the Constitution of the state of Washington is amended to require that the state's public employee retirement systems, including the future provision of additional benefits, shall be funded on an actuarially sound basis.

An actuarial valuation is to be performed annually for each retirement system.  The valuation shall include a description of any unfunded liability of the system and a plan for amortizing this liability over 30 years, beginning July 1, 1991.  Subsequent valuations shall revise the plan over this period.  The legislative body responsible for the respective retirement plan shall appropriate the funds necessary to retire the unfunded liability under the current plan.

The provisions of section 1 (state debt) and section 6 (limitations upon municipal indebtedness) of Article VIII shall not apply to the obligation to fund all or any portion of a public employee retirement system, including any unfunded liability.

Appropriation:  none

Revenue:   none

Fiscal Note:    requested February 13, 1989