Retirement & Health Benefits for January 29, 2021

Fred Yancey | The Nexus Group
Jan 29, 2021
Retirement Blog

It is my ambition to say in ten sentences what others say in a whole book.― Friedrich Nietzsche

Hearings are being held every day and the challenge is to communicate one’s position within the one minute typically given to testify. Because of the limited time given for public testimony, constant phone and email correspondence with legislators remains critical this session.

Let’s review a few bills.

Retirement Related Proposals

HB 1032 | Concerning early retirement options for members of the teachers’ retirement system and school employees’ retirement system plans 2 and 3.

Sponsors: Harris, Stonier, Dolan, Boehnke, Leavitt, OrtizSelf, Callan, Riccelli, Santos, Bergquist The bill proposes reducing early retirement penalties for older school employees in order to help protect vulnerable older teachers and classified employees from health Covid–19 related health risks. It is currently before the House Appropriations Committee awaiting a hearing.

SB 5021 | Concerning the effect of expenditure reduction efforts on retirement benefits for public employees, including those participating in the shared work program.

This bill provides that specified public pensions will not be reduced as a result of compensation reductions that are part of a public employer’s expenditure reduction efforts during the 2019–2021 and 2021–23 fiscal biennia. It also provides that the pension benefit of an employee covered by a pension system that is administered by the Department of Retirement Systems is not reduced as a result of participation in an unemployment insurance shared work program.

The point being that an employee’s retirement calculations based on time served and salary should not be reduced due to mandatory furloughs.

This bill is scheduled for Executive Session before the Senate Ways and Means Committee on 1/28/2021.

SB 5352 | Allowing new government employees the option of opting out of retirement system membership if the employee is age sixty or older when first hired, or when the employee’s employer opts into retirement plan participation.

Sponsors: Braun, Dozier, King, Wilson, J.

The title makes this very clear. It is really aimed at those get hired at a later age and have no wish or intent to vest in the retirement system.

This bill has been referred to the Ways and Means Committee and is awaiting a hearing.

School Employee Benefit Board (SEEB)

SB 5322 | Prohibiting dual enrollment between school employees’ benefits board and public employees’ benefits board programs. Sponsors: Robinson. By Request: Health Care Authority (HCA).

SB 5322 is HCA-requested legislation. The proposed legislation makes it clear that members who are dual-eligible for both PEBB and SEBB must choose to receive their health benefits (medical, dental, and vision) from either the PEBB or SEBB program. 6189(4) could have been read to allow dual-eligible members to pick and choose which program to get each component of health benefits from, which would have been very difficult to administer and would likely have caused confusion for members.

The Ways and Means Committee held a public hearing on 1/28/21.

SB 5326 | Concerning health and pension benefits for school bus drivers employed by private nongovernmental entities Sponsors: Robinson, Cleveland, Wilson, C., Conway, Das, Wellman, Hasegawa, Hunt, Liias, Saldana, Nguyen, Nobles

This bill is basically a reintroduction of a bill offered last session to guarantee health insurance (SEEB) and pension contributions for providers of school district transportation services.

Obviously, any private provider will pass the costs of these employee benefits to the district. This would be (surprise, surprise) an unfunded mandate.

The Senate Ways and Means Committee held a public hearing on this bill on 1/28/20.

There was a mix of “Pro” and “Con” testimony. Superintendents, WASA and WSSDA testified in opposition. Union members testified to the need for these benefits. The “Con” testimony agreed that all people deserve adequate health and pension benefits. However, this proposal would add an unfunded cost to districts. (Staff indicated the employer cost would be $1,000/month for health; and 8.05% for pension costs.) Superintendents testified that districts were already suffering losses due to the pandemic and unfunded SEBB costs for existing district employees. If passed, the projected additional costs for Nine Mile Falls SD would be $200,000+; Newport SD would be $297,000+. A number of persons signed up without testifying and the “Pro” “Con” was mixed.

This bill will likely pass the committee given the large number of Democrat sponsors.

SB 5254 | Concerning the use of protective devices and equipment during a public health emergency. This bill requires an employer that requires its employees or contractors to wear personal protective equipment (PPE) during a public health emergency to provide the PPE at no cost to the employee. It has been scheduled for Executive Session on 2/3 before the Senate Labor Committee.

As an aside, both the PEB Board and SEB Boards held all day retreat meetings this last week. A separate report has been submitted covering those meetings.

Other Bills

There remain a large number of bills proposed primarily dealing with expanding various employee benefits and qualifications. They address such areas as unemployment compensation, family and medical leave, and workmen’s compensation. These proposals may or may not apply to school districts.

SSB 5061 | Concerning unemployment insurance. This bill would increase the minimum weekly benefit for unemployed workers, starting later this year. It also would lower rates used to calculate unemployment insurance taxes paid by employers to prevent their tax bills from soaring. This bill has passed the Senate 42/7 and has been sent to the House. The Paid Family Medical Leave (PFML) legislation passed in 2017 was an agreement between Washington’s employers and workers.

Two bills (HB 1073 and SB 5097 ) in the 2021 virtual legislative session are proposing changes.

  • Lowering employees’ eligibility for benefits from having to work 820 hours or more to just earning $1,000 in the qualifying period.
  • Expanding the “family member” definition to include non-blood related individuals whose close association is the equivalent of a family member.
  • Removing the exemption for small businesses (less than 50 employees) from job restoration and health benefit coverage mandates.
  • Lowering the eligibility for job restoration rights from having to work 12 months for an employer to merely 90 days.

Both bills have had public hearings. HB 1073 has been scheduled for Executive Session on 2/5/21.

SB 5115 | An act relating to establishing health emergency labor standards. This bill is quite comprehensive regarding worker safety and workers’ compensation standards. The bill report gives more detail.

This bill had a public hearing before the Senate Labor Committee on 1/18 and has yet to be scheduled for Executive Session.

Fred Yancey/ Mike Moran
The Nexus Group

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