Retirement & Health Benefits for March 17, 2023

Fred Yancey, The Nexus Group LLC
Mar 17, 2023

Retirement Blog


“The bill contains a null and void clause requiring specific funding be provided in an omnibus appropriation act.”

The revenue forecast is set to be released on the afternoon of March 20th. Budget releases and hearings follow shortly after. Therein lies the importance of the null and void clause. As Casey Stengel might have said, “If it cost somethin’ and ain’t in the budget, it ain’t going to happen.”

Listed below are bills that appear still "alive", remembering that negotiations are expected between both houses as they work out differences between the competing budgets. And as always, NTIB bills remain in the background and may come forward at any time.

Retirement Related Proposals

As a repeat of a repeat: Previous reports have covered the bills related to addressing the lack of a Cost-Of-Living increase (COLA) for members in TRS/PERS Plans 1 and requesting a COLA for members of those plans. They are: ESHB 1057, ESSB 5294, and HB 1201.

There are three basic bills currently moving that deal with pensions. These address the request for a one-time 3% COLA, employer rates, and how to deal with the $800 million the legislature set aside last session to lower the unfunded liability within TRS Plan 1.

ESSB 5294 was amended. Reduces the minimum contribution rates for the Plan 1 Unfunded Actuarial Accrued Liability (UAAL) in the Public Employees' and Teachers' Retirement System Plans 1 (PERS 1 and TRS 1) to 0.5 percent. • Sets UAAL rates for PERS 1 and TRS 1 for fiscal years 2024 through 2027. • Reduces the scheduled payment of $800 million into the TRS 1 fund to $250 million.

The Senate passed the bill 48/0. A public hearing was held on 3/9, and the bill awaits further action by the House Appropriations Committee.

HB 1201 Eliminates the minimum contribution rates for amortizing the unfunded liabilities in the Teachers' Retirement System Plan 1 (TRS 1), beginning August 31, 2024, and for the Public Employees' Retirement System Plan 1 (PERS 1), beginning June 30, 2025. • Fixes the employer contribution rate for the unfunded liabilities in PERS 1 and TRS 1 at zero until 2029, excluding amounts to amortize benefit improvements made after June 30, 2009. • Repeals the scheduled payment of $800 million into the TRS 1 fund scheduled for June 30, 2023.

The bill remains on the floor calendar and may well be NTIB since it deals with what to do with the previously dedicated millions.

Comment:  A key difference between 5294 and 1201 deals with the $800 Million the legislature budgeted last session to pay down the unfunded liability in TRS Plan1. Do we (legislators/budget writers) take all $800 million for use elsewhere? (HB 1201) or, Do we legislators/budget writers take all but $250 million? (ESSB 5294). The soon-to-released budgets will tell the tale. The other key difference is the effect on rates both short and long-term. Each deals with these projected rates differently.  

ESHB 1057: Would grant a one-time, capped 3% COLA for TRS1/PERS1 plan members. It also directs the SCPP to recommend a path to regain a permanent COLA for these retirees. Unlike its companion, an adopted amendment froze current rates until 2027.

The amended bill passed the House 96/0. The Senate Ways and Means Committee passed a striker that made it an identical companion to SB 5350 and struck out the rate freeze language.

SHB 1007: Concerning interruptive military service credit for members of the state retirement systems.

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

This bill is on the Senate floor calendar awaiting further action.

HB 1008: Concerning participating in insurance plans and contracts by separated Plan 2 members of certain retirement systems.

Comment: This bill would simply make retiree insurance provisions uniform and equitable for Plan 2 and 3 members.

This bill is on the Senate floor calendar awaiting further action.

SHB 1056: Repealing some postretirement employment restrictions.

Comment: Changes the postretirement employment restrictions on benefits eligibility for Public Employees' Retirement System, Teachers Retirement System, and School Employees Retirement System Plans 2 and 3 members that retired under the 2008 Early Retirement Factors (ERFs). • Permits 2008 ERF members to work in retirement system–covered employment for up to 867 hours per year without suspension of retirement benefits. • Adjusts benefits for individuals that chose the 3 percent per year early retirement reduction to the level of reduction in the 2008 ERFs for future benefit payments. Effective 1/1/2024.

This bill is scheduled for a public hearing on 3/16 before Senate Ways and Means.

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

Comment: Extends the expiration date of the Joint Select Committee on Health Care Oversight from December 31, 2022, until December 31, 2026, and renames it the Joint Select Committee on Health Care and Behavioral Health Oversight.

The bill is in House Rules, awaiting further action.

SSB 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.

Comment: Allows certain retired public employees who were denied retiree health care coverage by the Public Employees Benefits Board another limited opportunity to enroll. • Only retired or disabled employees who were denied coverage for failure to notify the Health Care Authority of their deferral of coverage, and appealed the denial before December 31, 2022, are provided the new opportunity to enroll.

This bill is in House Rules awaiting further action.

Other Areas of Potential Fiscal Impact (and often unfunded) to Districts

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

Comment: Allows an injured worker to make an audio and video recording of an independent medical examination and to have one person of the worker's choosing present during the examination.

This bill is scheduled for Executive Session 3/21 before Senate Labor and Commerce.

SHB 1105: Requiring public agencies to provide notice for public comment that includes the last date by which such public comment must be submitted.

Comment: Mandates a public agency that is required to solicit public comment for a statutorily specified period of time and to provide notice that it is soliciting public comment to include in the notice the last day by which written public comment may be submitted. • Makes an agency that violates the requirement to include in a notice for public comment the last day by which written comment may be submitted subject to a civil penalty of $500 for the first violation and $1000 for any subsequent violation.

A public hearing is scheduled 3/24 before Senate State Government.

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

Comment: Expands access to unemployment insurance benefits by adding circumstances where a person may voluntarily quit for good cause

This bill is scheduled for Executive Session 3/21 before Senate Labor and Commerce even before the public hearing on 3/16.

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

Comment: Creates a privilege from examination and disclosure for a union representative and a union employee concerning any communication between the union representative or union employee made during union representation. • Applies the privilege from examination and disclosure to the union members and organizations that represent: employees of college districts, public employees, faculty at public four-year institutions of higher education, civil service employees, ferry employees, port employees, and labor unions.

A public hearing before Senate Law and Justice is scheduled 3/23.

SHB 1200: Requiring public employers to provide employee information to exclusive bargaining representatives.

Comment: Requires certain public employers (including school districts)  to provide exclusive bargaining representatives information, such as contact information, date of hire, salary, and job site location, of employees in bargaining units if the employer has that information in its records. • Allows an exclusive bargaining representative to bring a court action if a public employer fails to comply with the requirement to provide information.

SHB 1200 passed the House 56/41 and has been moved to Senate Labor and Commerce for a public hearing 3/16.

EHB 1210: Concerning the recording of school board meetings.

Comment: Requires all school district board meetings to be audio recorded, subject to exceptions for executive sessions and emergencies, with recordings kept for one year. • Specifies that a public records request for recordings of meetings of a school district board of directors must include the date of the meetings requested or a range of dates. • Encourages school districts to make the content of school board of directors meetings available in formats accessible to individuals who need communication assistance and in languages other than English.

This bill is scheduled for Executive Session before the Senate State Government Committee 3/17.

E2SHB 1320: Concerning access to personnel records.

Comment: Requires an employer to furnish an employee or former employee with a complete copy of their personnel file at no cost within fourteen calendar 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 calendar days of the written request. • Allows an employee or former employee to bring a private action for violations of certain rights regarding personnel files, discharge information, and redaction logs, and entitles the employee to equitable relief, graduated statutory damages up to $1,000, and reasonable attorneys' fees and costs of each violation. • • Allows for redaction of personnel files under certain circumstances.  An adopted amendment reads: “Provides that a public employer has the burden of proving that it redacted only information as required and is subject to liability for bad faith redaction.”

Scheduled for Executive Session 3/21 before Senate Labor and Commerce.

2SSB 5048: Eliminating college in the high school fees.

Comment: Requires institutions of higher education to provide enrollment and registration in College in the High School (CHS) courses at no cost to students in grades 9 through 12 at public high schools. • Requires the Legislature to appropriate funds to fund CHS courses at inflation-adjusted rates. • Directs high schools that provide a CHS course to include information in the course catalog that there is no fee for students to enroll in a CHS course.

A public hearing 3/21 and Executive Session 3/24 have been scheduled before Senate Post-Secondary Education.

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

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

A public hearing has been scheduled 3/22 before House Labor.

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

Comment: Prohibits employers from discriminating against a person in an initial hiring decision based on the person's use of cannabis outside of work or based on a finding of no psychoactive cannabis metabolites in an employer-required drug screening test, subject to certain exceptions and other limitations.

Executive Session before House Labor has been scheduled 3/21.

E2SSB 5174: Providing adequate and predictable student transportation.

Comment: Requires the Office of the Superintendent of Public Instruction to provide an analysis of school district transportation costs and allocations to the Legislature by June 1, 2026. • • Creates a special passenger safety net program. (Note: The original bill and withdrawn proposed amendment mandate employees receive same pension/health benefits paid to state employees. This language has been deleted.)

Had a public hearing before House Appropriations 3/15 and is awaiting further action.

SB 5240Concerning unemployment insurance benefits appeal procedures.

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, or redetermination shall be deemed to be in issue subject to appeal.

SB 5240: House Labor Committee had a public hearing 3/15, and the bill is awaiting further action. HB 1656 passed the House 96/0 and has been moved to Senate Labor and Commerce awaiting scheduling.

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

Comment: Allows tribal compact schools, employee organizations representing school employees, and school board directors the option of providing health care through the School Employees Benefits Board through SEBB beginning January 1, 2024. Employers opting into coverage under SEBB may determine the terms of employee and dependent eligibility and must pay premiums set by HCA.

This bill has been sent to House Rules for further action.

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

Comment: Modifies the statutory formula for determining the premium rates for the Paid Family and Medical Leave Program.

Scheduled for Executive Session before House Labor Committee 3/17.

2SSB 5593: Improving equity in the transfer of student data between K-12 schools and institutions of higher education.

Comment: Requires institutions of higher education to enter into data-sharing agreements with the Office of the Superintendent of Public Instruction (OSPI) to facilitate the transfer of high school student directory information for purposes of informing students about postsecondary educational opportunities. • Requires school districts to annually transmit directory information for all enrolled high school students to the OSPI and directs the OSPI to make that information available to institutions of higher education. • Directs the OSPI to identify a process for making information about a student's enrollment in an institution of higher education available to the student's school district.

Scheduled for Executive Session before House Education 3/20.

Fred Yancey
The Nexus Group LLC

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