Two bills that may impact retirement systems and public employee pensions are scheduled for public hearing this week.
Public employee retirement opt-outs
SB 5352, sponsored by Sen. John Braun (R–Centralia), permits certain public employees to opt out of participation in a public
employee retirement plan. The option is available to public employees otherwise eligible for Public Employees’ Retirement System (PERS), School Employees’ Retirement System, and Teachers’ Retirement System. Employees eligible
for opt-out must:
- Have no prior service in a RCW 41.50.030 listed retirement plan (including PERS, LEOFF, Judicial Retirement System, and PSERS), and
- Be age 60 or older when newly hired.
A public employee who meets the criteria and wishes to opt out must affirmatively decide to do so prior to reporting to the Department of Retirement Services (DRS) as a plan member. The decision is irrevocable and a successful opt-out will result
in no contributions to a public employee retirement system and no ability to take benefits from that system. The bill does not specify how a public employee should notify DRS of a decision to opt out.
Public employers will still be required to contribute to the retirement system for normal costs and unfunded actuarial liability as if the employee had decided to participate in the retirement system.
Retirement contribution refunds
SB 5367, sponsored by Sen. Steve Conway (D–Tacoma), is a short bill that requires DRS to establish rules to identify inactive retirement
accounts on non-vested members of RCW 41.50.030 retirement systems (see link above) with accounts less than $1,000, and provide for closing and refunding of account balances. The bill also specifies that a refund terminates the member’s right
to future benefits unless otherwise restored according to the relevant retirement system’s rules.
Dates to remember
SB 5352 and SB 5367 are scheduled for public hearing in the Senate Ways & Means Committee on Monday, February 8 at 4 pm.