A new bill would give public employees full credit for their expected work hours during the COVID-19 crisis and make sure that employees’ retirements are not impacted by the temporary reduction of hours made in response to the pandemic. The bill also eliminates any retirement contribution reductions for public employees participating in a shared work compensation program.

SB 5021, by Sen. Sam Hunt (D–Olympia), shores up the retirements of public employees that were impacted by the pandemic and its associated work reductions. The bill makes sure that the average final salary for state and local government employee retirement systems includes compensation forgone by employees because of reduced hours, mandatory unpaid leave, temporary layoffs, furloughs, pay reductions, or similar measures from the COVID-19 crisis during the 2019-20 and 2021-22 biennia. It makes similar accommodations for service credits by granting full-service credits for time that was scheduled to be worked prior to any pandemic-related reduction in hours.

In short, the bill ensures that public employees’ retirements will not be affected by COVID-19 work reductions. The changes apply to:

• LEOFF plans 1 and 2
• PSERS
• PERS plans 1, 2, and 3
• State Patrol Retirement System
• Teachers’ plans 1, 2, and 3 retirement systems
• School Employees Retirement System

The bill also eliminates any penalty for current and former public employees (Plan 3) whose hours were reduced because they participated in an approved shared work compensation program. Contributions and benefits are to continue as though a reduction in hours did not occur.

This proposal is similar to steps taken during the great recession to protect public employee retirements when there were similar furloughs and layoffs.

Dates to remember

SB 5021 is scheduled for public hearing in the Senate Ways & Means Committee at 4 pm on Monday, January 18.