BILL REQ. #:  S-0264.1 

Read first time 01/28/2003.   Referred to Committee on Ways & Means.

     AN ACT Relating to extraordinary investment gain sharing for plans 1 and 3; and amending RCW 41.31.010, 41.31.030, and 41.31A.020; and providing an effective date.

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

Sec. 1   RCW 41.31.010 and 1998 c 340 s 1 are each amended to read as follows:
     (1) Beginning January 1, 2005, and on January 1st of odd-numbered years thereafter, the amount of extraordinary investment gains, if any, shall be used to provide a lump sum payment to each plan 1 retiree under chapters 41.32 and 41.40 RCW. The department shall calculate the amount of each payment as follows:
     (a) Each plan 1 retiree is awarded one point for each year of service credit and two points for each year of retirement;
     (b) The total amount of extraordinary investment gains under RCW 41.31.020 is divided by the total number of points awarded under (a) of this subsection;
     (c) Each retiree's individual point total is then multiplied by the single point value determined under (b) of this subsection and that amount is the odd year additional payment.
     (2) Beginning July 1, 1998, and on January 1st of even-numbered years thereafter, the annual increase amount as defined in RCW 41.32.010 and 41.40.010 shall be increased by the gain-sharing increase amount, if any. The monthly retirement allowance of a person in receipt of the benefit provided in RCW 41.32.489 or 41.40.197 shall immediately be adjusted to reflect any increase.

Sec. 2   RCW 41.31.030 and 1998 c 340 s 3 are each amended to read as follows:
     The legislature reserves the right to amend or repeal this chapter in the future and no member or beneficiary has a contractual right to receive ((this)) a postretirement adjustment or lump sum payment not granted prior to that amendment or repeal.

Sec. 3   RCW 41.31A.020 and 2000 c 247 s 408 are each amended to read as follows:
     (1) On January 1, 2004, and on January 1st of even-numbered years thereafter, the member account of a person meeting the requirements of this section shall be credited by the extraordinary investment gain amount.
     (2) The following persons shall be eligible for the benefit provided in subsection (1) of this section:
     (a) Any member of the teachers' retirement system plan 3, the Washington school employees' retirement system plan 3, or the public employees' retirement system plan 3 who earned service credit during the twelve-month period from September 1st to August 31st immediately preceding the distribution and had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution; or
     (b) Any person in receipt of a benefit pursuant to RCW 41.32.875, 41.35.680, or 41.40.820; or
     (c) Any person who is a retiree pursuant to RCW 41.34.020(8) and who:
     (i) Completed ten service credit years; or
     (ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or
     (d) Any teacher who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by July 1, 1996, under plan 2 and who transferred to plan 3 under RCW 41.32.817; or
     (e) Any classified employee who is a retiree pursuant to RCW 41.34.020(8) and who has completed five service credit years by September 1, 2000, and who transferred to plan 3 under RCW 41.35.510; or
     (f) Any public employee who is a retiree pursuant to RCW 41.40.010(29) and who has completed five service credit years by March 1, 2002, and who transferred to plan 3 under RCW 41.40.795; or
     (g) Any person who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who:
     (i) Completed ten service credit years; or
     (ii) Completed five service credit years, including twelve service months after attaining age fifty-four; or
     (h) Any teacher who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by July 1, 1996, under plan 2 and who transferred to plan 3 under RCW 41.32.817; or
     (i) Any classified employee who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by September 1, 2000, and who transferred to plan 3 under RCW 41.35.510; or
     (j) Any public employee who had a balance of at least one thousand dollars in their member account on August 31st of the year immediately preceding the distribution and who has completed five service credit years by March 1, 2002, and who transferred to plan 3 under RCW 41.40.795.
     (3) The extraordinary investment gain amount shall be calculated as follows:
     (a) One-half of the sum of the value of the net assets held in trust for pension benefits in the teachers' retirement system combined plan 2 and 3 fund, the Washington school employees' retirement system combined plan 2 and 3 fund, and the public employees' retirement system combined plan 2 and 3 fund at the close of the previous state fiscal year not including the amount attributable to member accounts;
     (b) Multiplied by the amount which the compound average of investment returns on those assets over the previous four state fiscal years exceeds ten percent;
     (c) Multiplied by the proportion of:
     (i) The sum of the service credit on August 31st of the previous year of all persons eligible for the benefit provided in subsection (1) of this section; to
     (ii) The sum of the service credit on August 31st of the previous year of:
     (A) All persons eligible for the benefit provided in subsection (1) of this section;
     (B) Any person who earned service credit in the teachers' retirement system plan 2, the Washington school employees' retirement system plan 2, or the public employees' retirement system plan 2 during the twelve-month period from September 1st to August 31st immediately preceding the distribution;
     (C) Any person in receipt of a benefit pursuant to RCW 41.32.765, 41.35.420, or 41.40.630; and
     (D) Any person with five or more years of service in the teachers' retirement system plan 2, the Washington school employees' retirement system plan 2, or the public employees' retirement system plan 2;
     (d) Divided proportionally among persons eligible for the benefit provided in subsection (1) of this section on the basis of their service credit total on August 31st of the previous year.
     (4) Beginning January 1, 2005, and on January 1st of odd-numbered years thereafter, the amount of extraordinary investment gains, if any, shall be used to provide a lump sum payment to each plan 3 retiree under chapters 41.32, 41.35, and 41.40 RCW. The department shall calculate the amount of each payment as follows:
     (a) Each plan 3 retiree is awarded one point for each year of service credit and two points for each year of retirement;
     (b) The total amount of extraordinary investment gains under subsection (3) of this section is divided by the total number of points awarded under (a) of this subsection;
     (c) Each retiree's individual point total is then multiplied by the single point value determined under (b) of this subsection and that amount is the odd year additional payment.
     (5) The legislature reserves the right to amend or repeal this section in the future and no member or beneficiary has a contractual right to receive ((this)) a distribution not granted prior to that ((time)) amendment or repeal.

NEW SECTION.  Sec. 4   Section 3 of this act takes effect January 1, 2004.