S-4009               _______________________________________________

                                                   SENATE BILL NO. 6380

                        _______________________________________________

State of Washington                               51st Legislature                              1990 Regular Session

By Senators Saling, Williams, Bender, Rasmussen, Nelson, Patrick, Talmadge, Bauer, Moore, Warnke and Conner

Read first time 1/12/90 and referred to Committee on  Ways & Means.

AN ACT Relating to retirement allowances for members of the teachers' and public employees' retirement systems; and amending RCW 41.32.575 and 41.40.325.

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

        Sec. 1.  Section 3, chapter 272, Laws of 1989 and RCW 41.32.575 are each amended to read as follows:

          (1) Beginning July 1, 1989, and every year thereafter, the department shall determine the following information for each retired member or beneficiary who is over the age of sixty-five:

          (a) The dollar amount of the retirement allowance received by the retiree at ((age sixty-five)) the time of retirement, to be known for the purposes of this section as the "((age sixty-five)) initial retirement allowance";

          (b) The index for the calendar year prior to the year that the retiree reached age sixty-five or retired, whichever occurred first, to be known for purposes of this section as "index A";

          (c) The index for the calendar year prior to the date of determination, to be known for purposes of this section as "index B";

          (d) The ratio obtained when index B is divided by index A, to be known for the purposes of this section as the "full purchasing power ratio"; and

          (e) The value obtained when the retiree's ((age sixty-five)) initial retirement allowance is multiplied by ((sixty)) seventy percent of the retiree's full purchasing power ratio, to be known for the purposes of this section as the "target benefit."

          (2) Beginning with the July payment, the retiree's ((age sixty-five)) initial retirement allowance shall be adjusted to be equal to the retiree's target benefit.  In no event, however, shall the adjusted allowance:

          (a) Be smaller than the retirement allowance received without the adjustment; nor

          (b) Differ from the previous year's allowance by more than three percent.

          (3) ((For members who retire after age sixty-five, the age sixty-five allowance shall be the initial retirement allowance received by the member.

          (4) For beneficiaries of members who die prior to age sixty-five:  (a) The age sixty-five allowance shall be the allowance received by the beneficiary on the date the member would have turned age sixty-five; and (b) index A shall be the index for the calendar year prior to the year the member would have turned age sixty-five.

          (5))) Where the pension payable to a beneficiary was adjusted at the time the benefit commenced, the benefit provided by this section shall be adjusted in a manner consistent with the adjustment made to the beneficiary's pension.

          (((6))) (4) For the purposes of this section:

          (a) "Index" means, for any calendar year, that year's average consumer price index‑-Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor;

          (b) "Retired member" or "retiree" means any member who has retired for service or because of duty or nonduty disability, or the surviving beneficiary of such a member.

        Sec. 2.  Section 2, chapter 272, Laws of 1989 and RCW 41.40.325 are each amended to read as follows:

          (1) Beginning July 1, 1989, and every year thereafter, the department shall determine the following information for each retired member or beneficiary who is over the age of sixty-five:

          (a) The dollar amount of the retirement allowance received by the retiree at ((age sixty-five)) the time of retirement, to be known for the purposes of this section as the "((age sixty-five)) initial retirement allowance";

          (b) The index for the calendar year prior to the year that the retiree reached age sixty-five or retired, whichever occurred first, to be known for purposes of this section as "index A";

          (c) The index for the calendar year prior to the date of determination, to be known for purposes of this section as "index B";

          (d) The ratio obtained when index B is divided by index A, to be known for the purposes of this section as the "full purchasing power ratio"; and

          (e) The value obtained when the retiree's ((age sixty-five)) initial retirement allowance is multiplied by ((sixty)) seventy percent of the retiree's full purchasing power ratio, to be known for the purposes of this section as the "target benefit."

          (2) Beginning with the July payment, the retiree's ((age sixty-five)) initial retirement allowance shall be adjusted to be equal to the retiree's target benefit.  In no event, however, shall the adjusted allowance:

          (a) Be smaller than the retirement allowance received without the adjustment; nor

          (b) Differ from the previous year's allowance by more than three percent.

          (3) ((For members who retire after age sixty-five, the age sixty-five allowance shall be the initial retirement allowance received by the member.

          (4) For beneficiaries of members who die prior to age sixty-five:  (a) The age sixty-five allowance shall be the allowance received by the beneficiary on the date the member would have turned age sixty-five; and (b) index A shall be the index for the calendar year prior to the year the member would have turned age sixty-five.

          (5))) Where the pension payable to a beneficiary was adjusted at the time the benefit commenced, the benefit provided by this section shall be adjusted in a manner consistent with the adjustment made to the beneficiary's pension.

          (((6))) (4) For the purposes of this section:

          (a) "Index" means, for any calendar year, that year's average consumer price index‑-Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor;

          (b) "Retired member" or "retiree" means any member who has retired for service or because of duty or nonduty disability, or the surviving beneficiary of such a member.