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Appropriations Committee
approves Rep. Bailey’s retire-rehire bill
The House Appropriations
Committee has given its nod of approval for a bill prime sponsored by
Rep. Barbara Bailey
that would close an unintended loophole in the
state’s 2001 retire-rehire law. The loophole allows teachers in the
TRS-1 (Teachers’ Retirement System) pension plan to retire in name only
and immediately return to their old jobs while collecting retirement
checks.
"The retire-rehire bill was passed in 2001 to allow retired teachers in
the TRS-1 pension plan to return to work and be employed up to 1,500
hours per year without reducing their retirement benefits. The measure
was intended to address a problem with teacher shortages in the
schools," said Bailey, R-Oak Harbor. "Unfortunately, that law has been
abused. Many people were retiring in name only without really retiring.
They were returning to the same job, the same desk, at the same salary
while receiving their retirement checks, and not giving an opportunity
for others to be considered for that job."
In 2003, the Legislature approved Bailey’s bill, which increased the
time of separation, required agencies to document shortages before they
could rehire a retiree, and banned verbal agreements that a worker could
come back. The changes were to apply to teachers and state workers.
However, Gov. Gary Locke vetoed the section applying to teachers.
"That set up a disparity between the PERS and TRS retirement systems
which I’ve been trying to correct ever since," said Bailey. "In the
meantime, the Joint Select Committee on Pension Policy conducted a study
and found that this loophole could potentially cost taxpayers more than
$7.5 million in the next fiscal biennium alone. We have finally come
together on an equitable agreement that will close this disparity while
upholding the spirit of the original law."
House Bill 2689 defines separation from service in TRS as excluding
circumstances where an employee and his/her employer have an oral or
written agreement to return to work following termination. It requires
that PERS and TRS Plan 1 retirees only be rehired after a justifiable
need has been documented to hire a retiree into the position being
filled. The hiring must be approved by the school board or other highest
decision-making authority.
"TRS retirees would be required to have at least 45 days of separation
from their old job. There can be no previous agreements and it includes
penalties for false claims relating to a member’s separation of service
and qualification for a retirement allowance," noted Bailey, a member of
the Joint Select Committee on Pension Policy. "This also limits the
amount of time they can be employed before their pension is affected.
"It’s my hope that this bill will finally make the law work as it was
intended. Retired teachers who return to work would still be allowed to
receive their retirement checks. However, this legislation would
implement tighter restrictions around the rehire process," added Bailey.
"We want to make sure if there’s a real need for a teacher and there are
no qualified applicants to fill that void, that a retiree can come out
of retirement without being penalized and fill that position. However,
we don’t want pre-existing agreements, or a ‘wink and a nod,’ and then
people to come back to work without really retiring."
The measure has been sent to the House Rules Committee for further
consideration.
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For more information, contact:
John
Handy, Assistant Director: (360) 786-5758
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