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Governor signs
Bailey's retire-rehire bill
Measure closes loophole that has allowed teachers
to retire in name only
A bill by
Rep.
Barbara Bailey that would close an unintended loophole in the
state's 2001 retire-rehire law was signed into law Tuesday by Gov.
Christine Gregoire.
"The original law was
meant to ease retirement restrictions for some teachers and state and
local government workers. It was approved at a time when there were
labor shortages during a booming economy. It intended to allow retired
workers to be rehired on a limited basis without losing a large portion
of their retirement pay," said Bailey, a member of the
Select
Committee on Pension Policy.
"Unfortunately, a loophole
allowed this law to be abused. Many people were retiring in name only
without really retiring at all," added Bailey, R-Oak Harbor. "With a
wink and a nod, a person was returning to the same job, the same desk,
at the same salary while receiving retirement checks, and not allowing
others to be considered for that job."
The 2001 law allowed
retired state employees in the Public Employees' Retirement System Plan
1 (PERS-1) and retired teachers in the Teachers' Retirement System Plan
1 (TRS-1) to return to work full-time, losing only three months of
retirement checks instead of seven months. Within 15 months after the
law took effect, nearly 1,900 public employees had retired and been
rehired. Nearly 700 went back to work at half-time or more. Some even
received salary increases after returning to work.
In 2003, Bailey attempted
to close the loophole. The Legislature approved Bailey's legislation,
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, then-Gov. Gary Locke vetoed the
section applying to teachers.
"This set up a disparity
between the Public Employees' Retirement System and the Teachers'
Retirement System that I've been trying to correct ever since," said
Bailey.
House Bill 1262 defines separation
from service in the TRS as excluding circumstances where an employee and
his or 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 the TRS from
one to one-and-a-half months for eligibility for 1,500 hour years
without suspension of retirement benefits. In addition, it imposes a
prospective cumulative lifetime cap in the TRS of 1,900 hours worked beyond
an annual 867 hour threshold.
"This will finally bring
us back to what the Legislature originally intended when it approved the
2001 retire-rehire law. Retirees will be able to come back to service on
a limited basis when labor shortages exist. However, the law will now be
fair and equal to everyone," said Bailey. "It's taken five years, but
we've finally provided some equity between the two retirement systems
while preserving the spirit of the retire-rehire law."
The bill will take effect
90 days after adjournment of the 2007 legislative session.
# # #
Rep. Barbara Bailey,
R-Oak Harbor, stands beside Gov. Christine Gregoire during the signing
of House Bill 1262, which closes an unintended loophole in the state's
retire-rehire law. Bailey is the prime sponsor of the bill.
For more information, contact:
John
Sattgast, Public Information Officer: (360) 786-7257
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