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The Nexus Group: Retirement & Benefits for Jan. 30


First, an update regarding health benefit study:

In 2012, ESSB 5940 regarding school employee benefits passed. It directed the Office of the Insurance Commissioner (OIC) to collect data on the health plans and costs from all school districts. This phase has been done with 100% of districts and carriers submitting the data. The legislation also mandated that school districts must offer a high deductible health plan option with a health savings account similar to that required for state employees.

The Health Care Authority (HCA) is now analyzing the OIC data and has to: 1. determine if districts are making progress toward employee premiums for full family coverage that are not more than three times the premiums for employees purchasing single coverage, and 2. review the advantages and disadvantages to the state, school districts, and school employees of various approaches to consolidated purchasing of school employee health benefits. The HCA has just begun this analysis and a preliminary report is due June 1, 2015.

They will be looking at the advantages and disadvantages in various consolidation models. For example, what would happen to costs if all K–12 employees (classified/certificated) are put into the current Public Employment Benefit Plans (PEBB) offerings? What if it’s only classified employees? What if all K–12 have a separate combined pool?

At this point, there have been no specific data answering these questions. OIC is still gathering information about the various projected models. Meanwhile, the list below may look familiar. It is a repeat from last week with the exception of updates on certain bills.

This week the most active committee hearings were before the House Labor Committee concerning various proposals for establishing minimum requirements for employers to meet on providing sick, safe, family, medical and vacation leaves. Updates on the committee’s action are given below. No hearings have yet been scheduled on any of the proposed changes in pensions or return to work provisions that affect future and present retirees.

Selected bills of note:

HB 1109 Authorizing membership in the teachers’ retirement system for certificated employees of the superintendent of public instruction.

Self-explanatory. Scheduled for Executive Session by the House Appropriations Committee on February 5th.

Representatives Reykdal, Wilcox, Bergquist

HB 1163 Concerning paid vacation leave.

This bill would compel an employer to grant two hours of vacation leave for every 40 hours an employee worked. As written, it explicitly exempts school districts. This bill was heard before the House Committee on Labor on January 29 at 8 AM.

Sponsors: Representatives Tarleton, Walkinshaw, Moeller, Ortiz-Self, Gregerson, Pollet, S. Hunt, Appleton, Ormsby, Goodman

HB 1273 Implementing family and medical leave insurance.

This bill, as written, establishes a family and medical insurance program in partnership with the Employment Security Department. Employees could take up to 12 weeks of paid leave. It would be funded by charging an employer 2/10th of 1% of an employee’s wage. This charge would rise to 4/10th of 1% in 2018. Those collected dollars would fund the program. Of course, this overlooks the additional cost to a district of a substitute if needed. This bill had a public hearing before the House Committee on Labor on 1/29 at 8 AM. WASA testified in opposition to the bill. It is an unfunded mandate and not sensitive to the fact that current collective bargaining agreements already provide for this type of leave. It is scheduled for Executive Session on February 3rd.

Sponsors: Representatives Robinson, Sells, Farrell, Hudgins, Kagi, Wylie, Sawyer, Walkinshaw, Moscoso, Ryu, Ormsby, Riccelli, Jinkins, Senn, McBride, Gregerson, Fitzgibbon, Moeller, Reykdal, S. Hunt, Stanford, Bergquist, Santos, Pollet, Fey, Tarleton

HB 1356 (SB 5306) Establishing minimum standards for sick and safe leave from employment.

This bill was heard before the House Committee on Labor and passed out of Executive Session on 1/29 on a vote of 4/3. WASA signed in “Pro with concerns” on this bill.

Sponsors: Representatives Jinkins, Riccelli, S. Hunt, Farrell, Stanford, McBride, Cody, Tharinger, Goodman, Ortiz-Self, Sullivan, Bergquist, Pettigrew, Dunshee, Fitzgibbon, Peterson, Moscoso, Ryu, Appleton, Sells, Pollet, Robinson, Reykdal, Walkinshaw, Senn, Wylie, Ormsby, Lytton, Moeller, Kagi, Hansen, Hudgins, Tarleton, Sawyer, Fey, Gregerson, Gregory, Van De Wege, Kilduff, Blake, Kirby, Orwall, Clibborn

HB 1542 (SB 5473) Providing retirement benefits at earlier ages in the plans 2 and 3 of the public employees’ retirement system, the teachers’ retirement system, and the school employees’ retirement system.

“Rule of 85”: When your minimum age of 55 and years of experience total 85, you could retire with full benefits.

Representatives S. Hunt, Moscoso, Reykdal, Sells, Pollet, Dunshee

HB 1615 (SB 5545) Concerning postretirement employment.

Allows all certificated and classified retirees who used 2008 ERF’s (Age 62 and 30 years of experience) to retire early with full benefits to return to work as substitutes, contract and/or project employees.

Representatives Appleton, Santos, Pollet, Moscoso, Reykdal, Sells, S. Hunt, Dunshee, Ormsby, Bergquist, Ortiz-Self, Fitzgibbon

SB 5473 (HB 1542) Providing retirement benefits at earlier ages in the plans 2 and 3 of the public employees’ retirement system, the teachers’ retirement system, and the school employees’ retirement system.

Rule of 85. Companion bill to HB 1542 cited above.

Senators Chase, Hasegawa, McAuliffe, Rolfes, Conway

SB 5148 Allowing members who retire early under alternate early retirement provisions as set forth in RCW 41.32.765(3) and 41.32.875(3) to work as substitute teachers and continue receiving retirement benefits at the same time.

The title says it all.”Beginning July 1, 2015, employment with an employer for the purposes of this subsection shall not include employment as a substitute teacher as defined in RCW 41.32.010.”

The definition of ‘teacher’ as cited in the bill is: “Substitute teacher” means: (a) A teacher who is hired by an employer to work as a temporary teacher, except for teachers who are annual contract employees of an employer and are guaranteed a minimum number of hours; or (b) Teachers who either (i) work in ineligible positions for more than one employer or (ii) work in an ineligible position or positions together with an eligible position.

Senators Parlette, Dammeier, Chase, Conway, McAuliffe, O’Ban

SB 5435 Expanding participation in the Washington state deferred compensation program.
Senators Bailey, Schoesler

Let me apologize for an earlier error in reporting on this bill. If passed, school districts must offer deferred compensation to employees, but there is no requirement for an employee to participate. The opt-out language in the bill only relates to state employees, not school employees.

“Beginning no later than January 1, 2017, all subdivisions of the state that participate in one or more the state retirement systems listed in RCS 41.50.030 must offer the state deferred compensation program as an option to all employees….

Beginning no later than January 1, 2016, all persons newly employed by the state who are eligible to participate in a deferred compensation plan shall be enrolled in the state deferred compensation plan unless the employee affirmatively elects to waive participation in the plan. Persons who participate in the plan without having selected a deferral amount or investment option shall contribute three percent of taxable compensation to their plan account which shall be invested in a default option selected by the state investment board in consultation with the director….”

SB 5545 (HB 1615)

ERF certificated and classified employees may return to part-time work. Companion bill to HB 1615 cited above.

Senators McAuliffe, Chase, Liias, Conway

Fred Yancey
fyancey@comcast.net
The Nexus Group