The Public Employees’ Retirement System (PERS) is the largest state retirement system and generally covers employees of the state and its political subdivisions. As of the June 30, 2024 Actuarial Valuation Report, approximately 181,000 active state and local government employees participate in PERS Plans 2 and 3.
State agencies and counties are required to enroll all eligible employees in PERS. Cities, special districts, and other municipal and public corporate entities may participate by applying to the Department of Retirement Systems (DRS) with authorization from the entity’s governing body.
Generally, employers that opt into PERS coverage must enroll all regularly compensated employees in eligible positions not covered by another state retirement system. DRS conducts periodic audits of employers to ensure compliance with enrollment requirements, administering retirement system rules, and collecting and remitting contributions.
The Federal Railroad Retirement Plan (FRRP) is a two-tier retirement system administered by the U.S. Railroad Retirement Board that provides retirement, disability, and survivor benefits to qualified railroad employees. Tier I benefits function as a replacement for Social Security, while Tier II provides an additional pension benefit. The Tier II monthly benefit equals 0.7 percent of pay for each year of service, based on a five-year average salary.
Under Washington State rule, port districts are prohibited from enrolling employees in both a private retirement plan and the state retirement system. A port district may allow employee-only contributions to private pension plans without loss of eligibility in-state pension plan.
The following port district employees are excluded from membership in PERS:
Legislative findings and intent are declared.
Removes the underlying exemption for port employees covered by a federal railroad pension plan or a union sponsored plan and replaces it with two separate exemptions. The first for port district employees who are covered by a federal railroad retirement for any period during which the port district paid payroll taxes toward the person's federal railroad retirement plan benefit. The second, pursuant to current law, port district employees who are covered by a Taft-Hartley defined benefit retirement plan that the port district is required to make employer contributions to under a collective bargaining agreement, for any period in which the port district made employer contributions to such a plan. A legislative finding and intent section is added.
The committee recommended a different version of the bill than what was heard. PRO: SB 5905 addresses a narrow, technical issue affecting a small number of port and railroad employees who have long participated in federally required or collectively bargained pension plans outside of PERS. These pension arrangements—such as Taft-Hartley multiemployer plans and the federal Railroad Retirement System—have been relied upon for decades by both workers and employers to provide secure, portable retirement benefits. The bill provides statutory clarity for DRS, protects employees from being forced out of existing pension plans, and prevents duplicative pension costs for ports and workers. Requiring participation in DRS plans in addition to federal railroad retirement would impose significant new payroll taxes and retroactive costs on employees and non-taxing ports.
OTHER: Ports historically have had discretion to join PERS, and some port employees were previously exempt under older statutes. The Port of Pend Oreille joined PERS in 2023 to cover non-railroad employees, without realizing its railroad workers—already covered by a federal pension—might also be required to participate. SB 5905 is intended to clarify the law and avoid unintended dual pension participation for those railroad employees.