The Nexus Group: Retirement & Benefits for Feb. 20

Feb 20, 2015

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Posted by Jerry Bender


The Nexus Group: Retirement & Benefits for Feb. 20

Two important legislative cut-off dates are February 20 and February 27. The first date is when all policy bills have to have been heard by a committee(s) and the latter date is the similar deadline for all bills from fiscal committees.

However, any bill deemed necessary to implement the budget (NTIB) remains alive past these deadlines, and the fact that the Legislature can deem any bill alive, the status of many of the following bills is still unclear. Furthermore, the agendas next week for both Senate and House fiscal committees are “To Be Announced,"so uncertainty reigns.

Here is a list and brief description of bills of importance:

HB 1737 Addressing the availability of retired teachers as substitutes.

A teacher in plan 2 or plan 3 that has retired under the ERF factors may be employed with an employer for up to two hundred sixteen hours per school year (27 days) without suspension of his/her benefits.

Representatives Orcutt, Santos, Magendanz, Bergquist, Ortiz-Self, Kilduff, Kagi, Zeiger, Tarleton, Muri, Condotta, Pollet

This bill had its first public hearing February 11 before the House Appropriations Committee. No further action has been scheduled. This bill could be ruled NTIB.

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.

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

This bill directly addresses the need for substitutes with a limit of 867 hours. Should a district and students need a long-term sub, a district could hire one, instead of a series of short-term subs as would be the case in HB 1737. The bill had a public hearing February 16. A panel including the WEA and the superintendent of Soap Lake testified in favor of the bill. It is awaiting action before the Senate Ways and Means Committee but could be deemed NTIB.

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

Sponsors: Senators Rivers, Rolfes, Litzow, Dammeier, Angel

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. This bill was voted on by the Early Learning and K–12 Senate Education Committee and is currently in limbo. It is likely dead.

SB 6017/HB 2138 Establishing PERS/TRS Plan 1 COLAs.

SB 6017 Sponsors: Senators Liias, Conway, Fraser, McAuliffe, Chase, Kohl-Welles, Darneille

HB 2138 Sponsors: Representatives Reykdal, S. Hunt, Sells, Muri, Pollet, Pettigrew, Johnson, Haler, Ormsby, Dunshee, Lytton, Walkinshaw, Ortiz-Self

If enacted, this bill would provide PERS and TRS Plan 1 retirees with the same cost-of-living adjustment (COLA) that is provided to Plan 2 and Plan 3 members. The first COLA applied would be in July of 2015.

Both bills have been referred to their respective fiscal committees (Senate Ways and Means, House Appropriations) and have yet to be scheduled for hearings. This certainly qualifies as NTIB, but the bills are highly unlikely to pass given current fiscal constraints and other demands on the 2015–2017 budget.

Meanwhile, regarding pensions, Sen. Braun (Centralia/Chehalis), the Vice-Chair of the Senate Ways and Means Committee, has introduced a number of bills related to changing the present pension system for future hires. He clearly favors moving the public employee compensation and benefit models into models based upon the private sector (and the lowest end of the private sector compensation and benefit models).

None of these bills to date have been scheduled for hearings, but could easily be deemed NTIB.

SB 5980 Creating the Elected Officials Retirement Savings Plan.

Sponsors: Senator Braun

If enacted, this bill would create a retirement savings plan option for public officials elected or appointed to elective office after July 1, 2017. After this date, newly elected officials would only have the choice of participating in this savings plan option, and could not participate in one of the state administered defined benefit retirement plans, such as PERS. This bill would not apply to elected Judges or Justices and would also allow PERS members the option to remain in PERS if they are at least age 50 upon their date of reelection.

This bill is awaiting a hearing before the Senate Ways and Means Committee.

SB 5982 Increasing the normal retirement age for new employees.

Sponsors: Senator Braun

If enacted, this bill would increase the normal retirement age of new employees first hired on or after July 1, 2015. New employees first hired into eligible positions in PERS Plan 2 and 3, TRS Plan 2 and 3, or SERS Plan 2 and 3, will have a normal retirement age of 67 instead of 65. New employees first hired into PSERS Plan 2 eligible positions would have a normal retirement age of 62 instead of 60. New employees first hired into LEOFF Plan 2 eligible positions would have a normal retirement age of 55 instead of 53. New employees first hired into WSPRS Plan 2 eligible positions would have a normal retirement age of 57 instead of 55.

This bill is awaiting a hearing before the Senate Ways and Means Committee.

SB 6005: Limiting maximum compensation for retirement benefits.

Sponsors: Senator Braun

If enacted, this bill would impact new employees first hired after December 31, 2015, by limiting the maximum compensation for calculating retirement benefits to the State Average Annual Wage as determined under RCW 50.04.355. (The “average annual wage” is the quotient derived by dividing the total remuneration reported by all ‘private’ employers for the preceding calendar year by the average number of workers reported for all months of the preceding calendar year and if the result is not a multiple of one dollar, rounding the result to the next lower multiple of one dollar.)

It would also limit the compensation upon which employee and employer contributions are paid to the same State Average Annual Wage. This bill would apply to members in PERS, TRS, SERS and PSERS, but does not apply to LEOFF Plan 2 or WSPRS Plan 2 members. For higher education employees first hired after December 31, 2015, annual contributions by the employer may not exceed ten percent of the state average annual wage.

This bill is awaiting a hearing before the Senate Ways and Means Committee.

Feel free to contact me if you have any questions.

Fred Yancey
The Nexus Group

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