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The Nexus Group: Retirement & Benefits for April 3


First, a caveat - numerous bills still remain alive and are included in either the Senate or the House budget proposals. Because of this, these bills are deemed “necessary to implement the budget” (NTIB) so remain ‘alive’ until the eventual end of session (whenever that will occur). In addition, any bills still in House Appropriations or Senate Ways and Means have until the April 7 deadline to advance.

Here’s a recap/ review:

Senate Proposed Budget/House Proposed Budget
Below is a comparison between the proposed Senate and House Budgets


Senate House
Insurance Health Benefit
Present Rate ($768)
$768 (2015–16) $869 (2015–16)
$768 (2016–17) $937 (2015–16)
Medicare Insurance Subsidy for Retirees
Present Subsidy ($150)
$110 $150
Retirement Contributions Per Pension Funding Council Per Pension Funding Council
TRS 13.13% 13.13%
PERS 11.18% 11.18%
SERS 11.58% 11.58%
Substitute Rate (4 subs/classroom teacher unit) $151.86 $151.86
Healthcare Carve-out $59.19 (Sept. 1, 2015) $67.94 (Sept. 1, 2015)
$57.61 (Sept. 1, 2016) $72.81 (Sept. 1, 2016)

Interesting side-note; the carve-out remittance requirements shall not apply to employees who purchase insurance benefits through contracts with the Health Care Authority.

Minimum Wage/ Sick/Safe Leave
These next two bills/issues are very dear to the House Democrats and represent potential bargaining chips as the House and the Senate barter bills in order to reach sine die.

Both bills had a public hearing before the Senate Commerce and Labor Committee on March 30. It was clear by his remarks that Senator Baumgartner, the Chair, was opposed. Testimony was overwhelming in support with just a few opponents from the business groups in opposition. Senator Baumgartner cancelled any further meetings of the Committee so they were never brought to a vote to advance. Both bills are ‘dead’ at this point.

HB 1355: Increasing the minimum hourly wage to twelve dollars over four years passed the House on March 3rd (51 to 46 with 1 excused). This bill is ‘dead’. The thinking may well be to let a statewide initiative be run to raise the minimum wage.

HB 1356: Establishing minimum standards for sick and safe leave from employment passed the House on March 3rd (51 to 46 with 1 excused). Implementation for this bill is funded in the House budget proposal ($1.5 million) so it is NTIB.

Substitute Teachers
Even though districts and most legislators know of the critical need for substitute teachers, major bills to increase the pool of those available have not been advanced.

SHB 1737: Addressing the availability of retired teachers as substitutes passed the House on a 97–1 vote. It was sent to the Senate Ways and Means Committee where it continues to sit on some shelf. Until Senators Schoesler or Bailey relent and permit Chair Hill to advance the bill, it will remain dormant. The House budget bill, however, does fund implementation of this bill, so it is NTIB, and will remain ‘alive’ till sine die.

SB 5941: Concerning certification of adjunct faculty as common school substitute teachers.

This bill requires the Professional Educator Standards Board to amend or adopt rules that provide for issuance of the certification necessary to serve as substitute teachers, other than emergency substitute certification, to adjunct faculty currently employed in institutions of higher education who meet certain criteria.

The bill was approved by the Senate on a vote of 48–1. It passed out of the House Education Committee on March 26. It is in House Rules awaiting a pull to the House floor calendar.

Pensions
Four negative bills were introduced in the Senate regarding pensions. They all had hearings before the Senate Ways and Means Committee but have not yet been voted on by the Committee.

SB 5982: Addressing retirement age provisions for new members of the state retirement systems administered by the Department Of Retirement Systems.

Summary of Bill: The normal retirement ages for PERS 2 & 3, TRS 2 & 3, SERS 2 & 3, PSERS 2, LEOFF 2 and WSPRS members are each increased by two years. The proposed changes the present full retirement age 65 to age 67.

SB 6005: Establishing the state average annual wage as the maximum compensation to be used for calculating state retirement benefits.

Summary of Bill: The average final compensation used to calculate a retirement benefit, and the reported compensation upon which member and employer contribution rates are applied, many not exceed the state average annual wage for the prior calendar year. (The Washington state average annual wage for 2013 was $52,635).

SB 6076: Garnishing public pensions to pay for the costs of incarceration of a public employee convicted of a felony for misconduct associated with such person’s service as a public employee.

This bill would allow the garnishment up to 50% of the gross monthly benefit for costs of incarceration, probation, parole, or restitution imposed on a member, former member, or retiree as a result of a conviction of or a plea of guilty to the commission of a felony for misconduct associated with the person’s service as a public employee.

SB 6077: Authorizing the forfeiture of the pension of a public employee convicted of a felony for misconduct associated with such person’s service as a public employee.

This requires a court, if a member of a state retirement system or plan is convicted of or pleads guilty to a felony that was committed in the course of, or was related to, the member’s employment as a public official or public employee, to order that person’s membership terminated and the person shall forfeit all rights and benefits earned under the state retirement system or plan.

Health Insurance
SSB 5976: Establishing a consolidated purchasing system for public employees.

This bill creates the School Employees’ Benefits Board (SEBB), within the state Health Care Authority (HCA), to design and approve statewide insurance benefit plans for school employees and to establish eligibility criteria for participation in insurance benefit plans. It would remove health benefits from collective bargaining at a district level.

This bill is on the Senate floor calendar awaiting a vote. Implementation for this bill is funded in the Senate budget proposal. ($18 million)

Senate Budget Notes
On another note, and non-related, the Senate budget assumes over $48 million in unspecified efficiency savings (LEAN) by state agencies. In addition, it books $250,000 in savings from reducing non-essential plug loads such as mini-refrigerators and heaters. No detail was overlooked by the Senate budget writers. Thought you’d want to know.

Fred Yancey
fyancey@comcast.net
The Nexus Group