Retirement & Health Benefits for January 20, 2023

“A party without a cake is just a meeting (hearing)” ~ Julia Child

Bills continue to be introduced but the real action happens as committees hold public hearings and executive sessions on various bills. Executive sessions often follow. Changes in planned agendas also often happen at the last moment. 

Listed below are bills that show some movement. Others were reported last week but are not repeated this week if no activity has occurred to date.   

Retirement Related Proposals

General Comment: Suddenly, there are a wealth of pension related bills that go in various directions. (See ** bills below) As a reminder, the last adopted budget allocated $800 Million dollars to accelerate/retire the unfunded pension liability (UAAL) in the TRS Plan 1.  That plan remains in some of the proposals and is repealed in others. The Governor, in this latest budget, accelerates the UAAL in PERS 1 through an assumption that investment returns will exceed the 7% assumed rate of return by the actuary.  The assumption and change results in a $300+ million-dollar savings to the state. School districts are currently paying pension surcharges in addition to the regular pension contributions. These surcharges will go away under a timeline proposed by OFM and proposed legislation, saving the districts dollars they must allocate, particularly for excess staff not funded by the state. (See HB 1201/SB 5294 below)

HB 1007/SB 5296: Concerning interruptive military service credit for members of the state retirement systems.

Sponsors: Paul, Stokesbary,  Bergquist,  Leavitt, Simmons,  Griffey,  Callan, Doglio,  Timmons,  Reeves, Bronoske,  Shavers,  Riccelli, Ormsby

By Request: LEOFF Plan 2 Retirement Board, Select Committee on Pension Policy

Comment: Retirement credit can be awarded if in any armed conflicts, if the participant was awarded the respective campaign or expeditionary badge or medal…. the ‘expeditionary badge qualifier was added.

A public hearing on SB 5296 is scheduled for 1/23 before the Senate Ways and Means Committee. HB 1007 is scheduled for Executive Session on 1/23 before House Appropriations.

HB 1008/SB 5420: Concerning participating in insurance plans and contracts by separated plan 2 members of certain retirement systems.

Sponsors: Bronoske, Simmons,  Goodman,  Leavitt, Bateman,  Lekanoff,  Callan, Kloba,  Santos,  Ormsby, Fosse

Comment: This bill would simply make retiree insurance provisions uniform and equitable for Plan 2 and 3 members. Currently, a Plan 2 member who separates from service but does not yet collect retirement cannot defer his/her enrollment in any of the state PEBB health plans. He/she may, for example, have no need of insurance upon retirement because the spouse may still be working and have coverage. Because of the inability to defer and save his rights to buy a PEBB policy in the future, he/she loses any rights to future PEBB plans.  Plan 3 members, however, can defer and yet not collect retirement and continue to save their right to enter PEBB when they begin to collect retirement. This bill just makes both plans the same. 

HB 1008 scheduled for Executive Session on 1/23 before House Appropriations.

SB 5420:Concerning participating in insurance plans and contracts by separated plan 2 members of certain retirement systems.

Sponsors: Conway, Van De Wege,  Hunt

Scheduled for public hearing on 1/23 before Senate Ways and Means Committee.

HB 1056/ SB 5349: Repealing some postretirement employment restrictions.

Sponsors: Stokesbary, Fitzgibbon,  Leavitt, Simmons,  Lekanoff,  Rule, Griffey,  Macri,  Bergquist, Wylie,  Ormsby

By Request: Select Committee on Pension Policy

Comment:Beginning January 1, 2024, any current or future retiree under the provisions of early retirement may utilize the 32 postretirement employment provisions of RCW 41.32.802(2) for up to 867 hours per year. This includes administrators. DRS wanted this in order to simplify the current system, particularly when it came to using retired contract services.

Scheduled for Executive Session on 1/23 before House Appropriations Committee.

SB 5349/HB 1056: Repealing some postretirement employment restrictions.

Sponsors: Conway, Robinson,  Wilson,C.,  Keiser, Hasegawa,  Cleveland,  Holy, Hunt,  Kuderer,  Nobles, Saldaña,  Shewmake,  Trudeau, Valdez

See above. Scheduled for public hearing on 1/23 before Senate Ways and Means Committee.

**HB 1057/SB 5350: Providing a benefit increase to certain retirees of the public employees' retirement system plan 1 and the teachers' retirement system plan 1.

Sponsors: Stokesbary, Fitzgibbon,  Leavitt, Simmons,  Rude,  Bateman, Pollet,  Street,  Goodman, Robertson,  Macri,  Donaghy, Bronoske,  Paul,  Bergquist, Wylie,  Kloba,  Ormsby

By Request: Select Committee on Pension Policy (SCPP)

Comment: This bill would provide a 3% increase not to exceed $110/month for TRS1/PERS1 Plan retirees. The Governor included this one-time increase in his released supplemental budget. Same COLA as granted last session. However, there is an addition: During the 2023-2025 fiscal biennium, the SCPP will study and recommend a permanent ongoing cost-of-living adjustment for beneficiaries of the public employees' retirement system plan 1 and the teachers' retirement 2 system plan 1.

Scheduled for public hearing 1/26 before House Appropriations Committee.

**SB 5350: Providing a benefit increase to certain retirees of the public employees' retirement system plan 1 and the teachers' retirement system plan 1.

Sponsors: Conway, Hasegawa,  Lovick,  Robinson, Wagoner,  Pedersen,  Keiser, Randall,  VanDeWege,  Liias, Cleveland,  Frame,  Hawkins, Holy,  Hunt,  Kuderer, Lovelett,  Mullet,  Muzzall, Nguyen,  Nobles,  Saldaña, Shewmake,  Stanford,  Trudeau, Valdez,  Warnick,  Wilson, C., Wilson, L.

See HB 1057 above. Scheduled for public hearing 1/23 before Senate Ways and Means Committee.

SB 5121: Extending the expiration date of the joint select committee on health care oversight.

Sponsor: Cleveland

Comment: The expiration date of this committee is to be extended. Its goal must be to ensure that these multiple health and insurance regulatory agencies are not duplicating their efforts and are working toward a goal of increased quality of services leading to reduced costs to the health care consumer.

This bill has passed committee and in Senate Rules awaiting further action.

**HB 1201/SB 5294: Concerning actuarial funding of state retirement systems.

Sponsors: Ormsby, Macri,  Morgan

By Request: Office of Financial Management

Comment: This bill deals with eliminating the unfunded liability (UAAL) of TRS/PERS Plans 1. The intent is that by so doing, the employer surcharge currently being paid to decrease the UAAL, will be reduced to a zero(O%) added charge: PERS on 6/30/25; SERS on 8/31/25 and TRS on 8/31/24. This will save the state in excess of $4B and school districts whose staffing exceeds state reimbursement will also save dollars. Cities and counties will also save money. This bill also repeals the commitment made last session to pay $800 M toward eliminating the TRS 1 unfunded liability, assuming investment returns will make up the difference.

This bill had public hearing on 1/18 and is awaiting further action.

**SB 5294: Concerning actuarial funding of state retirement systems.

Sponsors: Rolfes, Van De Wege

See HB 1201 above. Scheduled for public hearing 1/23 before Senate Ways and Means Committee.

**HB 1294: Concerning cost-of-living adjustments for plan 1 retirees of the teachers' retirement system and public employees' retirement system.

Sponsors:  Steele, Robertson,  Ortiz-Self, Volz,  Jacobsen,  Riccelli, Santos,  Pollet

Comment: This bill is an attempt to establish a permanent (3% maximum) COLA for TRS/PERS Plan 1 members. No movement to date.

**HB 1459: Providing an annual adjustment in the public employees' retirement system and teachers' retirement system plan 1 benefits capped at $110 per month by adjusting the long-term investment rate of return assumption.

Sponsors: Stokesbary, Ormsby,  Santos,  Robertson, Bergquist,  Steele,  Volz, Maycumber,  Graham,  Kloba, Chambers,  Jacobsen,  Eslick, Gregerson,  Macri,  Bateman

Comment: This is basically a capped permanent COLA proposal. A public hearing 1/26 before House appropriations is scheduled.

SB 5169: Concerning health care plans administered by the health care authority that are available to Medicare eligible retirees.

Sponsors: Hunt, Wilson, C.

Comment: The public employees' benefits board must allow Medicare eligible 9 retirees access to the uniform medical plan classic (UMP) Medicare. This is in reaction to an earlier attempt by the Health Care Authority to remove UMP as an future offering due solely to the huge cost increase and differential compared to the newly added PEBB Advantage (United Health Care) plans. The outrage among school retirees forced the agency to back off that attempt. This is designed to insure they don’t do it in the future.

Scheduled for public hearing on 1/27 before Senate Heath Care Committee.

SB 5296/HB 1007: Concerning interruptive military service credit for members of the state retirement systems.

Sponsors: Nobles, Van De Wege,  Billig,  Boehnke, Braun,  Cleveland,  Conway, Fortunato,  Holy,  Hunt, Lovick,  Rivers,  Robinson, Stanford,  Wagoner,  Wellman, Wilson, C.

Comment: See HB 1007 above.

HB 5490:Concerning health care coverage for retired or disabled employees denied coverage for failure to timely notify the authority of their intent to defer coverage.

Sponsors: Rolfes

Comment: This bill came to Sen. Rolfes from an agitated constituent who missed the deadline to continue membership in PEBB post-retirement. This bill allows a ‘second bite at the apple’ if certain conditions and timelines are met. It was introduced 1/20 and no further action since.

Other Areas of Potential Fiscal Impact and (Often, Unfunded) to Districts

HB 1068: Concerning injured workers' rights during compelled medical examinations.

Sponsors: Bronoske, Simmons,  Ryu,  Goodman, Berry,  Bateman,  Peterson, Taylor,  Doglio,  Gregerson, Wylie,  Pollet,  Davis, Santos,  Ormsby,  Fosse

Comment: This allows an injured worker to make an audio and video recording of a compelled medical examination, and to have one person of the worker's choosing present during the examination. 

Scheduled for Executive Action on 1/20 before House Labor Committee.

HB 1099: Requiring certain wages in public works contracts to be at least the prevailing wage in effect when the work is performed.

Sponsors: Berry, Ormsby,  Goodman,  Bateman, Reed,  Pollet,  Doglio, Simmons,  Bronoske,  Gregerson, Kloba,  Santos,  Riccelli, Fosse

Comment: Requires public works contracts to specify that wages paid to workers will not be less than the latest prevailing wage rate in effect at the time the work is performed. Scheduled for Executive Session on 1/20 before House Labor Committee.

HB 1106: Concerning qualifications for unemployment insurance when an individual voluntarily leaves work.

Sponsors: Fosse, Reeves,  Reed,  Berry, Doglio,  Wylie,  Kloba, Santos,  Ormsby

Comment: Expands access to unemployment insurance benefits by adding circumstances where a person may voluntarily quit for good cause. Scheduled for Executive Session on 1/20 before House Labor Committee. 

HB 1136: Requiring employers to reimburse employees for necessary expenditures and losses.

Sponsors: Reeves, Reed,  Berry,  Walen, Ramel,  Pollet

Comment: An employer shall reimburse an employee for all necessary expenditures and losses incurred by the employee in direct consequence of the discharge of the employee's duties. Reimbursement must be paid within 30 days of the employer's actual or constructive notice of the expenditure or loss.

HB 1187: Concerning privileged communication between employees and the unions that represent them.

Sponsors: Hackney, Berry,  Bateman,  Ramel, Doglio,  Simmons,  Lekanoff, Bronoske,  Wylie,  Stonier, Pollet,  Ormsby

Comment: To effectuate the public policy favoring effective collective bargaining, it is necessary to protect confidential union–employee communications in the course of union representation against disclosure. Scheduled fore Executive Session on 1/27 before House Labor Committee.

HB 1246: Concerning eligibility for health benefits from the school employees' benefits board for school employees.

Sponsors: Ortiz-Self

Comment: School employees anticipated to work less than 630 hours in any single school employees' benefits board organization may establish eligibility for benefits by working for more than one school employees' benefits board organization if the combined hours the school employee is anticipated to work is at least 630 hours per school year. Employer contributions for an employee eligible under this subsection (6)(d)(ii) shall be prorated across the employee's school employees' benefits board organizations based on data reported.

Scheduled for public hearing 1/26 before House Appropriations Committee.

SB 5059:  Concerning prejudgment interest.

Sponsors: Kuderer, Trudeau,  Conway,  Nobles, Pedersen,  Stanford,  Valdez, Wellman

Comment: This was proposed last session. Briefly stated, judgments founded on the tortious conduct of a "public agency" shall bear interest from the date ((of entry)) the cause of action accrued. So if a district is found liable for neglecting to act in a child’s best interest, years after the fact, it will pay a penalty and interest from the day the neglect/damage first occurred. from the date the action is commenced or the date the minor attains the age of eighteen years, whichever is earlier.

Scheduled for public hearing on 1/24 and Executive Session on 1/26 before Senate Law and Justice Committee.

SB 5061: Concerning access to personnel records.

Sponsors: Kuderer, Stanford,  Conway,  Frame, Hasegawa,  Hunt, Keiser,  Nobles, Valdez,  Wellman,  Wilson, C.

Comment: Requires an employer to furnish an employee with a complete, unredacted copy of their personnel file at no cost within 14 days of a request. • Mandates an employer to furnish a former employee with a signed written statement with the effective date of discharge, whether the employer had a reason for the discharge, and if so, the reasons, within 14 days of the written request. • Allows an employee to bring a private action for violations of certain rights regarding personnel files and discharge information and entitles the employee to equitable relief, graduated statutory damages up to $1,000, and reasonable attorneys' fees and costs of each violation.  

This had a public hearing on 1/12 and no further action to date.

SB 5084: Creating a separate fund for the purposes of self-insured pensions and assessments.

Sponsors: Braun, Keiser,  Mullet

Comment: Creates a self-insurance reserve fund for payments from self-insured employers related to workers' compensation pensions and from the overpayments reimbursement fund.

Referred to Senate Ways and Means after passing Senate Labor Committee.

SB 5123: Concerning the employment of individuals who lawfully consume cannabis.

Sponsors: Keiser, Frame,  Hunt,  Kuderer, Mullet,  Nguyen,  Randall, Stanford,  Van De Wege,  Wellman

Comment: Prohibits employers, with some exceptions, from discriminating against a person in hiring if the discrimination is based on the person's use of cannabis outside of work or on certain employer-required drug screening tests.

Scheduled for Executive Session action on 1/24 before Senate Labor Committee.

SB 5212/HB 1068: Concerning injured workers' rights during compelled medical examinations.

Sponsors: Stanford, Conway,  Dhingra,  Lovelett, Nguyen,  Valdez

Comment: See HB 1068 above. SB 5212 scheduled for public hearing 1/26 before Senate Labor Committee.

SB 5237: Establishing complaint procedures to address noncompliance with certain state education laws.

Sponsors: Wilson, C., Wellman,  Hunt

Comment: This is an act relating to establishing complaint procedures to address noncompliance with certain state education laws. Complaints are to be filed and investigated by OSPI. The PESB may hold the Superintendent responsible and act accordingly. School directors can also be removed from office.

Public hearing 1/16 before Senate Education Committee. No further action to date.

SB 5240: Concerning unemployment insurance benefits appeal procedures.

Sponsors: Braun, Keiser,  Mullet

Comment: A dispute of an individual's initial determination, determination of allowance or denial of allowance of benefits, or redetermination of allowance or denial of benefits, all matters covered by such initial determination, determination, redetermination shall be deemed to be in issue subject to appeal.

Scheduled for Executive Session 1/24 before Senate Labor Committee.

SB 5275: Expanding access to benefits provided by the school employees' benefits board.

Sponsors: Robinson, Hunt,  Keiser,  Lovick, Nobles,  Randall,  Wellman, Wilson, C.

Comment: Pursuant to contractual agreement with the authority, access to health care benefits can be expanded to an "Employer group" for the school employees' benefits board program meaning an employee organization representing school employees, a school district for the purposes of covering a school board director, and a tribal school as defined in RCW 28A.715.010, obtaining employee benefits through a contractual agreement with the authority to participate in benefit plans developed by the public employees' benefits board.

A public hearing 1/19 was held and no further action to date.

SB 5286: Modifying the premium provisions of the paid family and medical leave program.

Sponsors: Robinson, King,  Keiser,  Liias, Stanford,  Wellman,  Wilson, C.

Comment: Amends the premium rate calculation in the Paid Family and Medical Leave Program (PFML) to be based on a specified formula rather than the Family and Medical Leave Insurance Account (Account) balance ratio on September 30th of the previous year. • Sets a maximum rate of 1.2 percent and removes the Employment Security Department's authority to assess a solvency surcharge if the Account balance ratio falls below a certain threshold.

Currently before Senate Rules Committee.

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