The 2007 session wrapped up on April 22. Seventeen pension-related bills were passed by legislators and signed into law by Governor Gregoire. Below are the highlights, structured so you can easily see which bill impacts you and your plan. For more detailed information, please visit the legislative section of our Web site.
House Bill 1261– Purchase of Temporary Duty Disability Service Credit: If you are a member of SERS, TRS, PSERS or LEOFF Plan 2, you can now purchase up to 24 consecutive months of service credit for each period of temporary duty disability. Before this legislation only PERS members could purchase up to 24 consecutive months of service. TRS members were unable to purchase service credit for periods of temporary duty disability.
Senate Bill 5175 – Age 66 COLA: If you turn 66 at any time within the calendar year, and you have been retired for at least a year, you will receive the annual Uniform Cost of Living Adjustment (COLA) in July. Before this bill passed, retirees had to wait until the following July to receive the COLA if their sixty-sixth birthday occurred August - December.
House Bill 1264 – Dual Membership: This bill affects all state retirement systems and plans, as well as the first class city employee retirement systems for Seattle, Tacoma and Spokane. If you belong to more than one of these retirement plans, you are a dual member and this bill changes how your dual membership affects your retirement.
House Bill 1266 – Expanding $150,000 Death Benefit: If you die from an occupational disease or duty-related illness, your survivors are now eligible for the $150,000 death benefit. Before this bill, only survivors of public employees who died as a result of injuries sustained in the course of employment were eligible to receive a lump sum death benefit of $150,000. This benefit is provided for all members of PERS, TRS, SERS, LEOFF, WSPRS, PSERS, JRS, and for state, school district, and higher education employees who are not members of a state retirement system.
Also, if you are a PERS Plan 2 member in uniformed service to the United States, your survivor will now be eligible to receive a 200 percent refund (up from 100 percent) of your accumulated contributions if all of the following applies:
House Bill 2391 – Gain Sharing Replacement: see Gain sharing ends and new benefits begin article
House Bill 1262 – Post Retirement Employment: For TRS Plan 1 retirees, this bill increases the waiting period from 30 days to one and a half months before retirees can return to employment and work more than 867 hours. TRS Plan 1 retirees who wait one and a half months can work up to 1,500 hours before their retirement benefit is suspended. In addition, your employer must meet specific requirements (see below). TRS Plan 1 retirees are also subject to a new lifetime limit of 1,900 hours. The hours you work between 867 and 1,500 will apply to your lifetime limit.
If you are a member of PERS or TRS Plan 1, your employer must have a written policy for hiring retirees, and document the need for hiring a particular retiree as well as the hiring process used. This bill also prohibits prior re-employment agreements.
House Bill 1649 – Benefit Multiplier for Past Judicial Service: This bill changes the formula used to calculate the amount you pay for past judicial service. The new formula for each service credit month is: 5 percent (2.5 percent for Plan 3) of salary earned plus 8 percent interest, compounded monthly. If you purchased past service before this became law on July 20, 2007, you can have the cost recalculated. If the new cost is less than the amount originally paid, the balance will be returned to you.
There are limits as to how much past service can be purchased using this new method, but judges may still use the actuarial equivalent method. The ability to purchase past judicial service using this new calculation expires on December 31, 2007.
Senate Bill 5918 – Retirement Benefits for Judges: If you participate in the Judicial Retirement Account, valid domestic relations orders and IRS levies will be applied to your funds. This bill also applies the provisions of Washington’s community property laws to certain distributions.
Senate Bill 5313 – WSPRS Retirement Age: Your mandatory retirement age changed from 60 to 65, effective July 1, 2007. (The Chief of the Washington State Patrol has no mandatory retirement age.)
House Bill 1260 – WSPRS Contribution Rates: Effective July 1, 2007, the formula used to establish your contribution rate (as well as your employer’s) changed. First, you either pay one-half of the adjusted total contribution rate or seven percent, whichever is smaller. Then, in addition to that amount, you pay one-half the cost of any benefit improvements effective on or after July 1, 2007. This bill also establishes a formula to develop minimum member contribution rates beginning July 1, 2009.
House Bill 1417 – WSPRS Survivor Benefits: Your spouse and dependent children will be reimbursed for any medical premium payments to the Washington State Health Care Authority if your employment results in your death.
House Bill 1124 – Adds DNR to PSERS Employers: Department of Natural Resources (DNR) was added to the list of employers eligible for PSERS. If you are a current DNR employee and are eligible for PSERS, you have 90 days to choose PSERS or remain in PERS. Newly hired DNR employees who meet PSERS eligibility will be mandated into PSERS.
House Bill 1679 – LEOFF 2 Board Membership: This bill staggers the terms of employer representatives on the board so that no more than one position will expire in the same year. Additionally, after January 1, 2008, one of the board members must be a retiree from LEOFF Plan 2.
House Bill 1680 – Exception to Service Credit Transfer Waiting Period for EMTs: Legislation passed in 2003 and 2005 allowed Emergency Medical Technicians (EMTs) to join LEOFF Plan 2. EMTs were also given the choice to transfer past PERS service credit into LEOFF Plan 2. The transfer of service credit could only occur five years after you elected to transfer. This bill creates an exception to the five-year waiting period if you retire due to disability, or you die.
July 2007/Legislative Edition