THE MOST significant improvement in local government employees’ pensions in at least 20 years has been signed into law by Gov. Christine Gregoire.
The new law will benefit all PERS retirement participants. But the benefit that will affect Council 2 members the most is the lowering of the retirement age for career employees from 65 to 62.
“Council 2 was a lead on the legislation and has been working on it for years,” says Council 2 President/Executive Director Chris Dugovich. “Change doesn’t always happen as quickly as you hope it will, but our efforts were certainly rewarded this year. These are really significant changes.”
The new law puts an end to gain sharing, the term for a provision that stipulated that when the state pension investments gained more than 10 percent for four consecutive years, Plan 1 and Plan 3 participants shared in those gains. But it replaces that with the most significant pension improvement in decades.
Since 1977, most Council 2 members have been required to work until age 65 regardless of their years of service. When they retired earlier than that, they faced a penalty of 3 percent for every year they left before 65. The provision applied even after employees had put in 30 years of service.
The new law provides no penalty for retiring at 62 or later with 30 years of service. (See final bill summary.)
“These new provisions are a significant improvement for career employees and will provide a realistic option for our members who find themselves working in jobs that are not conducive to working to age 65,” says Council 2 Deputy Director Pat Thompson.
He says a great deal of thanks should go to the bill’s prime sponsor Rep. Bill Fromhold (D-Vancouver). Joining him in the bill were Representatives Steve Conway (D-Tacoma) and Jim Moeller (D-Vancouver).
Also deserving a great deal of credit, Thompson says, are Senate Majority Leader Lisa Brown (D-Spokane) and Speaker of the House Frank Chopp (D-Seattle). “Your calls and e-mails to these legislators to thank them would go a long way in showing your appreciation for their efforts,” Thompson adds.
Other retirement bills passed by the State Legislature in the 2007 session:
Dual membership (HB 1264)
This bill affects all state retirement systems and plans, excepting LEOFF Plan 1 and the first-class city employee retirement systems for Seattle, Tacoma and Spokane. The bill changes portability of public retirement benefits in these ways:
- Reportable compensation — Allows compensation that is reportable in dual member systems to be included in the calculation of all dual members’ benefits, except in the Washington State Patrol Retirement System.
- Indexing — Adds leofff Plan 2 to the plans able to combine service under portability to receive indexing of the term-vested benefit for members with at least 20 years’ service.
- Service Cap — Removes the “maximum benefit rule” for dual members having fewer than 15 years of service in one capped plan and service in one uncapped plan.
Expanding/Indexing $150,000 death benefits (HB 1266)
This measure standardizes the $150,000 benefit for all systems by extending eligibility to include death from occupational disease or duty-related illness. It also addresses the refund of contributions a pers Plan 2 member’s survivor may receive.
If the member leaves eligible employment after earning 10 years of service credit and is subsequently killed while in uniformed service to the United States and while participating in Operatiom Enduring Freedom Persian Gulf, or Operation Iraqi Freedom, the refund is increased from 100 percent to 200 percent of the accumulated contributions in the member’s account.
Purchase of temporary duty disability service credit (HB 1261)
This bill standardizes the temporary duty disability provisions for members of PERS, SERS, TRS, PSERS and LEOFF Plan 2 to allow the purchase of up to 24 consecutive months of service credit for each period of temporary duty disability.
Other measures affecting Council 2 members
