SINCE THE BEGINNING of the PERS, TRS and SERS 3 plans, our union’s position has been consistent and clear. We opposed the 3 plans as an erosion of good pension policy and the abandonment of the concept of a “defined benefit program” for a “defined contribution program” that essentially leaves the worker at the whims of the investment market.

We were successful at that time in maintaining an option of joining either Plan 2 or 3 for new PERS hires, something the other plan members gave up. We also opposed the concept of gain-sharing, wherein the legislature could choose to give some of the benefits of a good investment year back to the plan participants, as not being a real guaranteed benefit.

Although some state and local government agents portrayed gain-sharing as a pension right, the statute creating gain-sharing made it clear that the legislature could refuse to fund gain-sharing at any time. Now that the first gain-sharing “event” is coming up in 2008, the legislature and the governor are balking at undertaking its very real, and very large, costs of around $2 billion, over the next 20 years.

The attorney general has written an official opinion that the legislature is not legally required to fund the gain-sharing allotments, while admitting that Washington State may be sued (in all reality make that WILL be sued,) by disgruntled workers who believed that the offer of gain-sharing was a pension right that could not be taken away without compensation.

Having offered gain-sharing as an inducement to workers to switch from the 2 plans to the 3 plans, we feel that the state should now maintain gain-sharing and live with the mess they created regardless of cost. However, being realists, we also know that the legislature will attempt to take away gain-sharing because of its long-term high costs, and that it will be difficult for the public employee labor organizations to stop the take away.

That is why for the past five years we have been working toward a package of public employment pension benefit enhancements that could be put in place of gain-sharing at a lesser cost, but still to our members’ benefit. We pushed for an early retirement program called “Rule of 90” which means you can retire with full benefits at any time your age and years of service totaled 90. (for example: 60 years old plus 30 years of service credit = 90.) The teachers have pushed for a Rule of 85 (which has an actual cost greater than gain-sharing according to the state actuary,) but, as with the Rule of 90, got nowhere.

This leads us to the current situation. Representatives Bill Fromhold, Steve Conway and Jim Moeller have advanced a package of enhancements that would accomplish the following:

HB 2391:

Pay the 2008 gain-sharing allotment to all 3 and 1 plan members and retirees, and then terminate all future gain-sharing payouts for all current and future employees;

Allow all future employees a choice of 2 or 3 plans in all the programs (current 3 members cannot change back to 2 plans because of IRS rules).

Increase current Plan 1 retirees’ COLA to an estimated 75% of what they would have received.

Allow the Early Retirement Factor (ERF) to be reduced in all 2 and 3 plans from 3% to 1% for people with 30 years of service (or more) down to age 60, and 3% down to age 55. That would mean that someone who was age 60 with 30 years on the job could retire with 95% of their normal retirement instead of today’s 85%. Those who are 55 (and had 30 years in) could retire with 80% instead of today’s 70% of their retirement amount.

This package of benefit changes would go into effect only if the lawsuit to maintain gain-sharing failed and gain-sharing was removed. This is the safety net that we have negotiated on your behalf and we believe has a chance of being passed by the legislature and agreed to by the Governor. The cost of these benefits is shared equally between employer and employee (.047 each).

The chart below indicates what percentage of your benefit you receive after 30 years of service if you retire prior to age 65.