2391 AMH CHAS PRIN 065

HB 2391 - H AMD 870

By Representative Chase

WITHDRAWN 4/21/2007

   On page 4, after line 3, insert the following:

   “NEW SECTION. Sec. 2. A new section is added to Chapter 41.31A RCW to read as follows:

   (1) On January 1, 2010, and on January 1st of even-numbered years thereafter, the member account of a member who retired prior to January 1, 2007 pursuant to RCW 41.32.875, 41.35.680, or 41.40.820, shall be credited by the extraordinary investment gain amount.

   (2) 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 or 3, the Washington school employees' retirement system plan 2 or 3, or the public employees' retirement system plan 2 or 3 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;

   (D) Any person in receipt of a benefit pursuant to RCW 41.32.875, 41.35.680, or 41.40.820 on or after January 1, 2007;

   (E) 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; and

   (F) Any plan 3 member who: completed ten service credit years; or completed five service credit years, including twelve service credit months after attaining age forty-four;

   (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.

   (3) 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 distribution not granted prior to that time.

   (4) This section is intended to take effect upon the repeal of RCW 41.31A.020. If the repeal of RCW 41.31A.020 is held to be invalid in a final determination of a court of law and the court orders reinstatement of gain-sharing or other alternate benefits as a remedy, then this section is shall be null and void as of the date of such reinstatement, and any benefits paid to members under this section prior to such reinstatement shall remain the property of the members.”

Renumber the remaining sections consecutively and correct the title

   On page 18, beginning on line 19, strike all of subsection (4) and renumber the remaining subsections consecutively, correct any cross references accordingly, and correct the title

   On page 19, after line 5, insert the following:

   "Sec. 14. RCW 41.45.061 and 2004 c 242 s 40 are each amended to read as follows:

   (1) The required contribution rate for members of the plan 2 teachers' retirement system shall be fixed at the rates in effect on July 1, 1996, subject to the following:

   (a) Beginning September 1, 1997, except as provided in (b) of this subsection, the employee contribution rate shall not exceed the employer plan 2 and 3 rates adopted under RCW 41.45.060((, *41.45.054,)) and 41.45.070 for the teachers' retirement system;

   (b) In addition, the employee contribution rate for plan 2 shall be increased by fifty percent of the contribution rate increase caused by any plan 2 benefit increase passed after July 1, 1996;

   (c) In addition, the employee contribution rate for plan 2 shall not be increased as a result of either:

   (i) Any distributions pursuant to section 309, chapter 341, Laws of 1998 and RCW 41.31A.020; or

   (ii) Any benefit increases pursuant to section 2, chapter ___ (this act), Laws of 2007.

   (2) The required contribution rate for members of the school employees' retirement system plan 2 shall equal the school employees' retirement system employer plan 2 and 3 contribution rate adopted under RCW 41.45.060((, *41.45.054,)) and 41.45.070, except as provided in subsection (3) of this section.

   (3) The member contribution rate for the school employees' retirement system plan 2 shall be increased by fifty percent of the contribution rate increase caused by any plan 2 benefit increase passed after September 1, 2000.

   (4) The required contribution rate for members of the public employees' retirement system plan 2 shall be set at the same rate as the employer combined plan 2 and plan 3 rate.

   (5) The required contribution rate for members of the law enforcement officers' and fire fighters' retirement system plan 2 shall be set at fifty percent of the cost of the retirement system.

   (6) The employee contribution rates for plan 2 under subsections (3) and (4) of this section shall not include any increase as a result of either:

   (a) Any distributions pursuant to RCW 41.31A.020 and 41.31A.030; or

   (b) Any benefit increases pursuant to section 2 of chapter _____ (this act), Laws of 2007.

   (7) The required plan 2 and 3 contribution rates for employers shall be adopted in the manner described in RCW 41.45.060((, *41.45.054,)) and 41.45.070.

   (8) The required contribution rate for members of the public safety employees' retirement system plan 2 shall be set at fifty percent of the cost of the retirement system."

Renumber the remaining sections consecutively, correct any cross-references accordingly, and correct the title.

   On page 19, line 15, after "2007." insert "Section 2 of this act takes effect January 2, 2008."

EFFECT: Provides that gain-sharing will continue after January 1, 2008 for members of Plan 3 of the Public Employees' Retirement System, the School Employees' Retirement System, and the Teachers Retirement System who retired prior to January 1, 2007 after earning at least five service credit years.