BILL REQ. #: Z-0179.1
State of Washington | 59th Legislature | 2005 Regular Session |
Read first time 01/20/2005. Referred to Committee on Ways & Means.
AN ACT Relating to allowing members of the teachers' retirement system plan 1 who are employed less than full time as psychologists, social workers, nurses, physical therapists, occupational therapists, or speech language pathologists or audiologists to annualize their salaries when calculating their average final compensation; and amending RCW 41.32.010.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 41.32.010 and 2003 c 31 s 1 are each amended to read
as follows:
As used in this chapter, unless a different meaning is plainly
required by the context:
(1)(a) "Accumulated contributions" for plan 1 members, means the
sum of all regular annuity contributions and, except for the purpose of
withdrawal at the time of retirement, any amount paid under RCW
41.50.165(2) with regular interest thereon.
(b) "Accumulated contributions" for plan 2 members, means the sum
of all contributions standing to the credit of a member in the member's
individual account, including any amount paid under RCW 41.50.165(2),
together with the regular interest thereon.
(2) "Actuarial equivalent" means a benefit of equal value when
computed upon the basis of such mortality tables and regulations as
shall be adopted by the director and regular interest.
(3) "Annuity" means the moneys payable per year during life by
reason of accumulated contributions of a member.
(4) "Member reserve" means the fund in which all of the accumulated
contributions of members are held.
(5)(a) "Beneficiary" for plan 1 members, means any person in
receipt of a retirement allowance or other benefit provided by this
chapter.
(b) "Beneficiary" for plan 2 and plan 3 members, means any person
in receipt of a retirement allowance or other benefit provided by this
chapter resulting from service rendered to an employer by another
person.
(6) "Contract" means any agreement for service and compensation
between a member and an employer.
(7) "Creditable service" means membership service plus prior
service for which credit is allowable. This subsection shall apply
only to plan 1 members.
(8) "Dependent" means receiving one-half or more of support from a
member.
(9) "Disability allowance" means monthly payments during
disability. This subsection shall apply only to plan 1 members.
(10)(a) "Earnable compensation" for plan 1 members, means:
(i) All salaries and wages paid by an employer to an employee
member of the retirement system for personal services rendered during
a fiscal year. In all cases where compensation includes maintenance
the employer shall fix the value of that part of the compensation not
paid in money.
(ii) For an employee member of the retirement system teaching in an
extended school year program, two consecutive extended school years, as
defined by the employer school district, may be used as the annual
period for determining earnable compensation in lieu of the two fiscal
years.
(iii) "Earnable compensation" for plan 1 members also includes the
following actual or imputed payments, which are not paid for personal
services:
(A) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position, or payments by an employer
to an individual in lieu of reinstatement in a position which are
awarded or granted as the equivalent of the salary or wages which the
individual would have earned during a payroll period shall be
considered earnable compensation and the individual shall receive the
equivalent service credit.
(B) If a leave of absence, without pay, is taken by a member for
the purpose of serving as a member of the state legislature, and such
member has served in the legislature five or more years, the salary
which would have been received for the position from which the leave of
absence was taken shall be considered as compensation earnable if the
employee's contribution thereon is paid by the employee. In addition,
where a member has been a member of the state legislature for five or
more years, earnable compensation for the member's two highest
compensated consecutive years of service shall include a sum not to
exceed thirty-six hundred dollars for each of such two consecutive
years, regardless of whether or not legislative service was rendered
during those two years.
(iv) For members employed less than full time under written
contract with a school district, or community college district, in an
instructional position, for which the member receives service credit of
less than one year in all of the years used to determine the earnable
compensation used for computing benefits due under RCW 41.32.497,
41.32.498, and 41.32.520, the member may elect to have earnable
compensation defined as provided in RCW 41.32.345. For the purposes of
this subsection, the term "instructional position" means a position in
which more than seventy-five percent of the member's time is spent as
a classroom instructor (including office hours), a librarian, a
psychologist, a social worker, a nurse, a physical therapist, an
occupational therapist, a speech language pathologist or audiologist,
or a counselor. Earnable compensation shall be so defined only for the
purpose of the calculation of retirement benefits and only as necessary
to insure that members who receive fractional service credit under RCW
41.32.270 receive benefits proportional to those received by members
who have received full-time service credit.
(v) "Earnable compensation" does not include:
(A) Remuneration for unused sick leave authorized under RCW
41.04.340, 28A.400.210, or 28A.310.490;
(B) Remuneration for unused annual leave in excess of thirty days
as authorized by RCW 43.01.044 and 43.01.041.
(b) "Earnable compensation" for plan 2 and plan 3 members, means
salaries or wages earned by a member during a payroll period for
personal services, including overtime payments, and shall include wages
and salaries deferred under provisions established pursuant to sections
403(b), 414(h), and 457 of the United States Internal Revenue Code, but
shall exclude lump sum payments for deferred annual sick leave, unused
accumulated vacation, unused accumulated annual leave, or any form of
severance pay.
"Earnable compensation" for plan 2 and plan 3 members also includes
the following actual or imputed payments which, except in the case of
(b)(ii)(B) of this subsection, are not paid for personal services:
(i) Retroactive payments to an individual by an employer on
reinstatement of the employee in a position or payments by an employer
to an individual in lieu of reinstatement in a position which are
awarded or granted as the equivalent of the salary or wages which the
individual would have earned during a payroll period shall be
considered earnable compensation, to the extent provided above, and the
individual shall receive the equivalent service credit.
(ii) In any year in which a member serves in the legislature the
member shall have the option of having such member's earnable
compensation be the greater of:
(A) The earnable compensation the member would have received had
such member not served in the legislature; or
(B) Such member's actual earnable compensation received for
teaching and legislative service combined. Any additional
contributions to the retirement system required because compensation
earnable under (b)(ii)(A) of this subsection is greater than
compensation earnable under (b)(ii)(B) of this subsection shall be paid
by the member for both member and employer contributions.
(11) "Employer" means the state of Washington, the school district,
or any agency of the state of Washington by which the member is paid.
(12) "Fiscal year" means a year which begins July 1st and ends June
30th of the following year.
(13) "Former state fund" means the state retirement fund in
operation for teachers under chapter 187, Laws of 1923, as amended.
(14) "Local fund" means any of the local retirement funds for
teachers operated in any school district in accordance with the
provisions of chapter 163, Laws of 1917 as amended.
(15) "Member" means any teacher included in the membership of the
retirement system. Also, any other employee of the public schools who,
on July 1, 1947, had not elected to be exempt from membership and who,
prior to that date, had by an authorized payroll deduction, contributed
to the member reserve.
(16) "Membership service" means service rendered subsequent to the
first day of eligibility of a person to membership in the retirement
system: PROVIDED, That where a member is employed by two or more
employers the individual shall receive no more than one service credit
month during any calendar month in which multiple service is rendered.
The provisions of this subsection shall apply only to plan 1 members.
(17) "Pension" means the moneys payable per year during life from
the pension reserve.
(18) "Pension reserve" is a fund in which shall be accumulated an
actuarial reserve adequate to meet present and future pension
liabilities of the system and from which all pension obligations are to
be paid.
(19) "Prior service" means service rendered prior to the first date
of eligibility to membership in the retirement system for which credit
is allowable. The provisions of this subsection shall apply only to
plan 1 members.
(20) "Prior service contributions" means contributions made by a
member to secure credit for prior service. The provisions of this
subsection shall apply only to plan 1 members.
(21) "Public school" means any institution or activity operated by
the state of Washington or any instrumentality or political subdivision
thereof employing teachers, except the University of Washington and
Washington State University.
(22) "Regular contributions" means the amounts required to be
deducted from the compensation of a member and credited to the member's
individual account in the member reserve. This subsection shall apply
only to plan 1 members.
(23) "Regular interest" means such rate as the director may
determine.
(24)(a) "Retirement allowance" for plan 1 members, means monthly
payments based on the sum of annuity and pension, or any optional
benefits payable in lieu thereof.
(b) "Retirement allowance" for plan 2 and plan 3 members, means
monthly payments to a retiree or beneficiary as provided in this
chapter.
(25) "Retirement system" means the Washington state teachers'
retirement system.
(26)(a) "Service" for plan 1 members means the time during which a
member has been employed by an employer for compensation.
(i) If a member is employed by two or more employers the individual
shall receive no more than one service credit month during any calendar
month in which multiple service is rendered.
(ii) As authorized by RCW 28A.400.300, up to forty-five days of
sick leave may be creditable as service solely for the purpose of
determining eligibility to retire under RCW 41.32.470.
(iii) As authorized in RCW 41.32.065, service earned in an out-of-state retirement system that covers teachers in public schools may be
applied solely for the purpose of determining eligibility to retire
under RCW 41.32.470.
(b) "Service" for plan 2 and plan 3 members, means periods of
employment by a member for one or more employers for which earnable
compensation is earned subject to the following conditions:
(i) A member employed in an eligible position or as a substitute
shall receive one service credit month for each month of September
through August of the following year if he or she earns earnable
compensation for eight hundred ten or more hours during that period and
is employed during nine of those months, except that a member may not
receive credit for any period prior to the member's employment in an
eligible position except as provided in RCW 41.32.812 and 41.50.132;
(ii) If a member is employed either in an eligible position or as
a substitute teacher for nine months of the twelve month period between
September through August of the following year but earns earnable
compensation for less than eight hundred ten hours but for at least six
hundred thirty hours, he or she will receive one-half of a service
credit month for each month of the twelve month period;
(iii) All other members in an eligible position or as a substitute
teacher shall receive service credit as follows:
(A) A service credit month is earned in those calendar months where
earnable compensation is earned for ninety or more hours;
(B) A half-service credit month is earned in those calendar months
where earnable compensation is earned for at least seventy hours but
less than ninety hours; and
(C) A quarter-service credit month is earned in those calendar
months where earnable compensation is earned for less than seventy
hours.
(iv) Any person who is a member of the teachers' retirement system
and who is elected or appointed to a state elective position may
continue to be a member of the retirement system and continue to
receive a service credit month for each of the months in a state
elective position by making the required member contributions.
(v) When an individual is employed by two or more employers the
individual shall only receive one month's service credit during any
calendar month in which multiple service for ninety or more hours is
rendered.
(vi) As authorized by RCW 28A.400.300, up to forty-five days of
sick leave may be creditable as service solely for the purpose of
determining eligibility to retire under RCW 41.32.470. For purposes of
plan 2 and plan 3 "forty-five days" as used in RCW 28A.400.300 is equal
to two service credit months. Use of less than forty-five days of sick
leave is creditable as allowed under this subsection as follows:
(A) Less than eleven days equals one-quarter service credit month;
(B) Eleven or more days but less than twenty-two days equals one-half service credit month;
(C) Twenty-two days equals one service credit month;
(D) More than twenty-two days but less than thirty-three days
equals one and one-quarter service credit month;
(E) Thirty-three or more days but less than forty-five days equals
one and one-half service credit month.
(vii) As authorized in RCW 41.32.065, service earned in an out-of-state retirement system that covers teachers in public schools may be
applied solely for the purpose of determining eligibility to retire
under RCW 41.32.470.
(viii) The department shall adopt rules implementing this
subsection.
(27) "Service credit year" means an accumulation of months of
service credit which is equal to one when divided by twelve.
(28) "Service credit month" means a full service credit month or an
accumulation of partial service credit months that are equal to one.
(29) "Teacher" means any person qualified to teach who is engaged
by a public school in an instructional, administrative, or supervisory
capacity. The term includes state, educational service district, and
school district superintendents and their assistants and all employees
certificated by the superintendent of public instruction; and in
addition thereto any full time school doctor who is employed by a
public school and renders service of an instructional or educational
nature.
(30) "Average final compensation" for plan 2 and plan 3 members,
means the member's average earnable compensation of the highest
consecutive sixty service credit months prior to such member's
retirement, termination, or death. Periods constituting authorized
leaves of absence may not be used in the calculation of average final
compensation except under RCW 41.32.810(2).
(31) "Retiree" means any person who has begun accruing a retirement
allowance or other benefit provided by this chapter resulting from
service rendered to an employer while a member.
(32) "Department" means the department of retirement systems
created in chapter 41.50 RCW.
(33) "Director" means the director of the department.
(34) "State elective position" means any position held by any
person elected or appointed to statewide office or elected or appointed
as a member of the legislature.
(35) "State actuary" or "actuary" means the person appointed
pursuant to RCW 44.44.010(2).
(36) "Substitute teacher" means:
(a) A teacher who is hired by an employer to work as a temporary
teacher, except for teachers who are annual contract employees of an
employer and are guaranteed a minimum number of hours; or
(b) Teachers who either (i) work in ineligible positions for more
than one employer or (ii) work in an ineligible position or positions
together with an eligible position.
(37)(a) "Eligible position" for plan 2 members from June 7, 1990,
through September 1, 1991, means a position which normally requires two
or more uninterrupted months of creditable service during September
through August of the following year.
(b) "Eligible position" for plan 2 and plan 3 on and after
September 1, 1991, means a position that, as defined by the employer,
normally requires five or more months of at least seventy hours of
earnable compensation during September through August of the following
year.
(c) For purposes of this chapter an employer shall not define
"position" in such a manner that an employee's monthly work for that
employer is divided into more than one position.
(d) The elected position of the superintendent of public
instruction is an eligible position.
(38) "Plan 1" means the teachers' retirement system, plan 1
providing the benefits and funding provisions covering persons who
first became members of the system prior to October 1, 1977.
(39) "Plan 2" means the teachers' retirement system, plan 2
providing the benefits and funding provisions covering persons who
first became members of the system on and after October 1, 1977, and
prior to July 1, 1996.
(40) "Plan 3" means the teachers' retirement system, plan 3
providing the benefits and funding provisions covering persons who
first become members of the system on and after July 1, 1996, or who
transfer under RCW 41.32.817.
(41) "Index" means, for any calendar year, that year's annual
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.
(42) "Index A" means the index for the year prior to the
determination of a postretirement adjustment.
(43) "Index B" means the index for the year prior to index A.
(44) "Index year" means the earliest calendar year in which the
index is more than sixty percent of index A.
(45) "Adjustment ratio" means the value of index A divided by index
B.
(46) "Annual increase" means, initially, fifty-nine cents per month
per year of service which amount shall be increased each July 1st by
three percent, rounded to the nearest cent.
(47) "Member account" or "member's account" for purposes of plan 3
means the sum of the contributions and earnings on behalf of the member
in the defined contribution portion of plan 3.
(48) "Separation from service or employment" occurs when a person
has terminated all employment with an employer.
(49) "Employed" or "employee" means a person who is providing
services for compensation to an employer, unless the person is free
from the employer's direction and control over the performance of work.
The department shall adopt rules and interpret this subsection
consistent with common law.