Retirement & Health Benefits for February 5, 2021

Fred Yancey | The Nexus Group
Feb 05, 2021
Retirement Blog

“Politics is tricky; it cuts both ways. Every time you make a choice, it has unintended consequences.” ~ Stone Gossard

Legislators propose policies and budget dollars. Sessions, also, often focus on main themes. This year’s focus issues are Budget, Covid–19, Equity (Racial and Police-related) and Climate issues. “Education” is woven throughout most of these, and often acts in one area have consequences in another. Thus, it’s tricky.

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.

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 continues to remain 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 has passed committee and is before Senate Rules.

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. The title makes this clear. It is really aimed at those who get hired at a later age and have no wish or intent to vest in the retirement system. This bill will have a public hearing 2/8 before the Ways and Means Committee. Cities, counties, and state employee unions are opposed. Employers because they must continue to pay DRS contributions for the employee, and Unions are opposed because they see it as a ‘camel in the tent’ move to start changing the retirement system.

SB 5367 | Directing the department of retirement systems to create rules regarding automatic refunds of retirement contributions in the retirement systems listed in RCW 41.50.030. This bill will allow DRS to refund retirement accounts of inactive and/or non-vested members. It is agency request legislation and will have a public hearing 2/8 before the Senate Ways and Means Committee.

School Employee Benefit Board (SEEB)

SB 5322 | Prohibiting dual enrollment between school employees’ benefits board and public employees’ benefits board programs. It is scheduled for Executive Session by the Ways and Means’ Committee on 2/11. SB 5326 Concerning health and pension benefits for school bus drivers employed by private nongovernmental entities.

The Senate Ways and Means Committee held a public hearing on this bill on 1/28/20 and there has been no further scheduling. However, notice of the public hearing on the bill was last minute, and it would not be unexpected that scheduling for Executive Session would also be at short notice.

Also health related : 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. (This is an example of a possible unintended consequence bill since additional unfunded costs could fall on a school district meeting the proposal’s requirements.)

It has been re-scheduled for Executive Session on 2/10 before the Senate Labor Committee.

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. Here is a sample of a few: ESSB 5061 Concerning unemployment insurance. This bill would provide relief from spiking unemployment insurance tax rates based upon record filings caused by the coronavirus pandemic. The Senate and House already have approved the bill and as of this writing, sent it on for the Governor’s expected signature.
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 that were detailed in last week’s report.

Both bills have been scheduled for Executive Session on 2/10/21 before the Senate Committee on Labor.

Fred Yancey
The Nexus Group

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