HOUSE BILL REPORT

HB 440

BYRepresentatives Unsoeld, Belcher, Jacobsen, Sayan, Lux and Holm

Revising provisions relating to retirement of elected officials of cities and towns.

House Committe on Ways & Means/Appropriations

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (22)

     Signed by Representatives Locke, Chair; Allen, Belcher, Braddock, Brekke, Bristow, Fuhrman, Grant, Grimm, Hine, Holland, McLean, McMullen, Nealey, Niemi, Peery, Sayan, Silver, L. Smith, H. Sommers, Sprenkle and B. Williams.

House Staff:Randy Acker (786-7153)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS

FEBRUARY 20, 1987

BACKGROUND:

A person holding elective office in a city or town is not required to become a member of the Public Employees' Retirement System (PERS) but is given the option to join in RCW 41.40.120 (3).  A person who is a PERS member by virtue of his or her full- time employment, and who later is also elected to office in a city or a town, may exercise the option to be a member of PERS under both positions. This would allow the member to use the compensation from both positions to calculate his or her retirement allowance.  However, once such an elected official decides to become a member of PERS, he or she does not have the option of terminating that membership during the term of office.

A PERS member who is employed by two or more PERS employers generally cannot receive retirement benefits until he or she retires from service with all the PERS employers.  Therefore a PERS member who retires from the member's regular employment but who continues to be a PERS member due to holding elective office in a city or town may not receive a retirement allowance.

Approximately twenty cities in Washington state pay their mayors in excess of $10,000 per year; approximately four cities also pay their council members in excess of that amount.

SUMMARY:

SUBSTITUTE BILL:  A Public Employees' Retirement System (PERS) member who is an elected official of a town or city and who receives no more than $10,000 per year for such service may end his or her membership in PERS without resigning from the elective office. A member who wishes to exercise this option must retire from all other PERS employment and must agree to irrevocably abandon any claim for service for future periods served as an elective official of a city or town.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Technical changes to clarify intent.  Deletes provision which would have prevented elected officials of cities with their own retirement systems from using the option provided by the bill.  That application of the bill is instead limited to elected officials of cities or towns who receive no more than $10,000 per year in such elective position.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Representative Jolene Unsoeld.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     A person who is an elected official of a city or town should not have to give up the elective position in order to receive a retirement allowance under PERS.

House Committee - Testimony Against: None Presented.