ByRepresentatives Bronoske, Griffey, Couture, Reeves, Bernbaum, Shavers, Rule, Salahuddin, Nance, Reed, Goodman, Parshley, Zahn, Simmons, and Leavitt

AN ACT Relating to providing additional plan choice to members of the teachers' retirement system plans 2 and 3, the school employees' retirement system plans 2 and 3, and the public employees' retirement systems plans 2 and 3; amending RCW 41.32.835, 41.35.610, and 41.40.785; adding a new section to chapter 41.32 RCW; adding a new section to chapter 41.35 RCW; and creating a new section.

NEW SECTION. Sec. 1. A new section is added to chapter 41.32 RCW under the subchapter heading "plan 3" to read as follows:

(1) Any plan 3 member who joined plan 3 between July 1, 1996, and June 30, 2007, and as a result was never offered the opportunity to choose between plan 2 and plan 3, may make an irrevocable choice to transfer to plan 2 during any January after the effective date of this section for purposes of future service, provided that the member earns service credit for that month.

(1) All teachers who ((first)) become employed by an employer in an eligible position ((on or after July 1, 2007,)) shall have a period of ninety days to make an irrevocable choice for the duration of the employment relationship to become a member of plan 2 or plan 3. At the end of ninety days, if the member has not made a choice to become a member of plan 2, he or she becomes a member of plan 3 or plan 2 as follows:

(a) ((Becomes a member of plan 3 if first employed by an employer in an eligible position on or after July 1, 2007, but prior to July 1, 2020;

(b))) Becomes a member of plan 2 ((if first employed by an employer in an eligible position on or after July 1, 2020)); or

(2) For administrative efficiency, until a member elects to become a member of plan 3, or becomes a member of plan 3 by default under subsection (1) of this section, the member shall be reported to the department in plan 2, with member and employer contributions. Upon becoming a member of plan 3 by election or by default, all service credit shall be transferred to the member's plan 3 defined benefit, and all employee accumulated contributions shall be transferred to the member's plan 3 defined contribution account.

(3) If a teacher is concurrently employed by two or more employers and has chosen membership in a plan, a teacher remains an active member of plan 2 or plan 3.

NEW SECTION. Sec. 3. A new section is added to chapter 41.35 RCW under the subchapter heading "plan 3" to read as follows:

(1) Any plan 3 member who joined plan 3 between September 1, 2000, and June 30, 2007, and as a result was never offered the opportunity to choose between plan 2 and plan 3, may make an irrevocable choice during any January after the effective date of this section to transfer to plan 3 for purposes of future service.

(1) All classified employees who ((first)) become employed by an employer in an eligible position ((on or after July 1, 2007,)) shall have a period of ninety days to make an irrevocable choice for the duration of the employment relationship to become a member of plan 2 or plan 3. At the end of ninety days, if the member has not made a choice to become a member of plan 2, he or she becomes a member of plan 3 or plan 2 as follows:

(a) ((Becomes a member of plan 3 if first employed by an employer in an eligible position on or after July 1, 2007, but prior to July 1, 2020;

(b))) Becomes a member of plan 2 ((if first employed by an employer in an eligible position on or after July 1, 2020)); or

(3) If a classified employee is concurrently employed by two or more employers and has chosen membership in a plan, an employee remains an active member of plan 2 or plan 3.

(1) All employees who ((first)) become employed by an employer in an eligible position on or after ((March 1, 2002))January 1, 2026, ((for state agencies or institutes of higher education, or September 1, 2002, for other employers,)) shall have a period of ninety days to make an irrevocable choice for the duration of the employment relationship to become a member of plan 2 or plan 3. At the end of ninety days, if the member has not made a choice ((to become a member of plan 2,)) he or she becomes a member of plan 3 or plan 2 as follows:

(a) ((Becomes a member of plan 3 if first employed by an employer in an eligible position on or after March 1, 2002, but prior to July 1, 2020, for state agencies or institutions of higher education, or on or after September 1, 2002, but prior to July 1, 2020, for other employers;

(b))) Becomes a member of plan 2 ((if first employed by an employer in an eligible position on or after July 1, 2020)); or

(2) For administrative efficiency, until a member elects to become a member of plan 3, or becomes a member of plan 3 by default pursuant to subsection (1) of this section, the member shall be reported to the department in plan 2, with member and employer contributions. Upon becoming a member of plan 3 by election or by default, all service credit shall be transferred to the member's plan 3 defined benefit, and all employee accumulated contributions shall be transferred to the member's plan 3 defined contribution account.

(3) If an employee is concurrently employed by two or more employers and has chosen membership in a plan, the employee remains an active member of plan 2 or plan 3.

NEW SECTION. Sec. 6. In the event that the state receives a determination letter or other formal guidance from the federal internal revenue service that the provisions of this act conflict with federal law, those provisions are suspended until subsequent federal internal revenue service guidance is received that any conflict with federal law has been resolved.