BILL REQ. #:  H-3415.1 

Read first time 01/13/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to limiting the impact of excess compensation on state retirement system contribution rates; and amending RCW 41.50.150.

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

Sec. 1   RCW 41.50.150 and 2004 c 242 s 47 are each amended to read as follows:
     (1) The employer of any employee whose retirement benefits are based in part on excess compensation, as defined in this section, shall, upon receipt of a billing from the department, pay into the appropriate retirement system the present value at the time of the employee's retirement of the total estimated cost of all present and future benefits from the retirement system attributable to the excess compensation. The state actuary shall determine the estimated cost using the same method and procedure as is used in preparing fiscal note costs for the legislature. However, the director may in the director's discretion decline to bill the employer if the amount due is less than fifty dollars. Accounts unsettled within thirty days of the receipt of the billing shall be assessed an interest penalty of one percent of the amount due for each month or fraction thereof beyond the original thirty-day period.
     (2) "Excess compensation," as used in this section, includes the following payments, if used in the calculation of the employee's retirement allowance:
     (a) A cash out of unused annual leave in excess of two hundred forty hours of such leave. "Cash out" for purposes of this subsection means:
     (i) Any payment in lieu of an accrual of annual leave; or
     (ii) Any payment added to salary or wages, concurrent with a reduction of annual leave;
     (b) A cash out of any other form of leave;
     (c) A payment for, or in lieu of, any personal expense or transportation allowance to the extent that payment qualifies as reportable compensation in the member's retirement system;
     (d) The portion of any payment, including overtime payments, that exceeds twice the regular daily or hourly rate of pay; ((and))
     (e) The portion of total reportable compensation used in the calculation of the employee's retirement allowance that exceeds one and one-half times the employee's reportable compensation over the calculation period, excluding reportable compensation from overtime, bonuses, cash outs of any form of leave, or lump-sum payments; and
     (f) Any termination or severance payment.
     (3) This section applies to the retirement systems listed in RCW 41.50.030 and to retirements occurring on or after March 15, 1984. Nothing in this section is intended to amend or determine the meaning of any definition in chapter 2.10, 2.12, 41.26, 41.32, 41.40, 41.35, 41.37, or 43.43 RCW or to determine in any manner what payments are includable in the calculation of a retirement allowance under such chapters.
     (4) An employer is not relieved of liability under this section because of the death of any person either before or after the billing from the department.