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House approves Bailey’s
retire-rehire bill,
minimum pension benefit measure
The House of
Representatives today unanimously approved two major retirement bills
prime-sponsored by
Rep. Barbara Bailey, R-Oak Harbor.
House Bill 2689 would close the other half of an unintended loophole in
the state’s 2001 retire-rehire law. The original loophole allowed state
employees in Plan 1 of both the PERS (Public Employee Retirement System)
and the TRS (Teachers’ Retirement System) pension plan to retire in name
only and immediately return to their old jobs while collecting
retirement checks.
"The 2001 law was set up to address a problem with teacher and employee
shortages. It was supposed to allow retirees to return on a limited
basis, only if there was no one else to fill the position," said Bailey.
"Unfortunately, the law was abused. Many people were retiring in name
only without really retiring. They kept the same job, the same salary,
and began receiving their retirement checks."
In 2003, Bailey introduced legislation to close the loophole for
teachers and state employees. The Legislature approved her measure.
However, Gov. Gary Locke vetoed half of the bill.
"The half of the bill that was vetoed was in reference to TRS-1. It’s
taken a while to eliminate the disparity between TRS-1 and PERS-1. This
bill corrects that problem," said Bailey, a member of the Joint Select
Committee on Pension Policy. "We now are bringing those two systems in
line with one provision which sets conditions to allow someone to retire
from the system and be rehired in the system."
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 pursuant to a written
employer policy on hiring retirees. It also increases the length of
break in service in TRS to one-and-a-half months for eligibility for
1,500 hour years without suspension of retirement benefits, and imposes
a cumulative lifetime cap of 1,900 hours worked beyond an annual 867
hour threshold.
"One important part of this bill is that it is prospective – it is going
forward. It does not apply retrospectively, but it will make our PERS-1
and TRS-1 pension systems uniform," noted Bailey.
The measure was approved 97-0 and sent to the Senate.
Lawmakers in the House also passed Bailey’s measure that would establish
a $1,000 minimum monthly benefit for long-time retired teachers and
public employees. House Bill 2687 would expand eligibility for the
benefit to PERS-1 and TRS-1 members who have had at least 20 years of
service and have been retired for at least 25 years.
"Betty Johnson is a former teacher, long-time retired, who testified in
committee that she is drawing less than $1,000 a month in teacher
retirement. She is one of a small number of state employees who retired
long ago and are receiving benefits of less than $1,000 a month," said
Bailey.
"Their base salaries of more than 25 years ago were very low in
comparison with salaries paid in recent years. Retirement benefits are
calculated on those salaries. Unfortunately, there weren’t any factors
tied to these pensions that would allow their minimum monthly benefits
to be adjusted for inflation or cost of living. So Betty and many of
these other elderly retired people are just barely getting by," added
Bailey. "I think it is only right that the minimum retirement benefit
out of the PERS and TRS plan 1 systems be extended to help these
people."
The measure also allows for a 3 percent annual increase. House Bill 2687
was also approved by the House, 97-0, and sent to the Senate for further
consideration.
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For more information, contact:
John
Handy, Assistant Director: (360) 786-5758
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