HOUSE BILL REPORT

HB 472

BYRepresentatives Belcher, R. King, Dellwo, Rayburn, Leonard, Unsoeld, Bristow, Allen and Jacobsen; by request of Department of Retirement Systems

Establishing a mechanism for mandatory assignment of divided retirement benefit payments.

House Committe on Ways & Means/Appropriations

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (20)

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

House Staff:Randy Acker (786-7153)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS

FEBRUARY 26, 1987

BACKGROUND:

State law provides that pension benefits paid to retirees of the state's retirement systems shall not be subject to garnishment attachment of other legal process.  In 1979 an exception to this general rule was enacted which provides that a court order in a dissolution (divorce) or legal separation action may require payments to be made to a spouse or former spouse.  In other words, the retirement allowance earned by a member may be divided and paid to both the member and the member's former spouse.

The 1979 law did not provide any guidelines to attorneys, the courts, or the Department of Retirement Systems (DRS) regarding how benefits should be divided nor how the department should deal with requests which were inconsistent with other state or federal laws.  In addition, the 1979 law applies only to persons who are retired and therefore does not prevent a member from avoiding a judicial order by withdrawing his or her contributions.  The department has incurred considerable administrative and legal expense in responding to inconsistent and ambiguous court orders.

SUMMARY:

SUBSTITUTE BILL:  The bill establishes a mechanism called a "mandatory benefits assignment order" which enables recipients if a spousal maintenance or property division payment under a decree of separate maintenance or dissolution to obtain a court order requiring such payment be made by the Department of Retirement Systems (DRS) from benefits due the obligor.

The mandatory benefits assignment order may either be included in a decree when entered or added after the fact.  The order does not trigger unless a payment is more than 15 days overdue and the total past due payment is equal to or greater than $100.

DRS may divide the payment of a withdrawal of contributions when such divisions ordered by the court and the order is received by DRS at least 30 days in advance of the payment.

The bill does not impact on a mandatory wage assignment order for child support (Chapter 26.18 RCW) or an order to withhold or deliver in connection with child support enforcement proceedings (Chapter 74.20A).

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Makes technical changes to clarify intent.  Allows, but does not require, a court to award attorney fees to a former spouse who obtains a mandatory benefits assignment order.  Clarifies the treatment of orders dealing with the withdrawal of a member's accumulated contributions.

Fiscal Note:    Attached.

Effective Date:The bill contains an emergency clause and takes effect July 1, 1987.

House Committee ‑ Testified For:     None Presented.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     None Presented.

House Committee - Testimony Against: None Presented.