Personnel, pensions & labor relations

Pension Systems Funding (SB 6161)

SB 6161 setting pension contribution rates for the 2009-11 Biennium passed the Legislature and was delivered to the Governor on the final day of the session. The bill makes several changes to pension funding methods and assumptions for all of the state’s retirement plans, except the Law Enforcement Officers and Fire Fighters’ Plan 2 (LEOFF 2).

The changes are summarized below:

• Delay the projected mortality improvement assumptions until after the 2009-11 fiscal biennium.
• Lower the general salary increase assumption from 4.5% to 4%.
• Delay the implementation of minimum contribution rates for PERS 2 and 3 until 2011.
• For the July 1, 2009 - June 30, 2011 biennium, the contributions collected to amortize the Plan 1 Unfunded Actuarial Accrued Liability (UAAL) will be 1.13% of pay in PERS and PSERS. After June 30, 2011, the funding method used to pay off the Plan 1 UAAL will be revised and contributions will be set to amortize the UAAL over a rolling 10-year period, subject to a minimum contribution rate of 5.25% of pay in PERS and PSERS.
• Revised contribution rates for the 2009-11 fiscal biennium as compared to current and previously adopted rates are outlined in the chart below.

*Excludes current DRS administrative expense rate of 0.16%
**Includes 1.13% Plan 1 UAAL

Member Contribution Rates***

System	Current Rates 7/1/08-6/30/09	Previously Adopted Rates 7/1/09-6/30/11	Rates Passed by the Legislature 7/1/09-6/30/11
PERS 2***	5.45%	4.61%	3.89%
PSERS	6.57%	6.94%	6.55%
LEOFF 1	0.00%	0.00%	0.00%
LEOFF 2	8.83%	8.45%	8.45% (adopted by LEOFF 2 Board)

***PERS 1 member contribution rates are set in statute at 6%. PERS 3 members contribute to the defined contribution portion of their benefit at a self-selected rate.

Although these changes create short term saving, any rate reductions will be followed by higher future contribution rates for cities and other public employers resulting in higher long-term costs.

Expanding the rights of state registered domestic partners E2SSB 5688

This bill passed the Senate by a vote of 30-18 and the House by a vote of 62-35. The Governor, although she has not yet done so, has indicated she will sign the legislation. E2SSB 5688 provides that for all purposes under state law, except RCW 26.04 (marriage) and where inconsistent with federal law and federal programs, state registered domestic partners shall be treated the same as married spouses.

The new law amends many state statutes to include state registered domestic partners when spouses, marriage, marital, husband, wife, widow, widower, next-of-kin or family are referenced. We will offer more in-depth analysis of the bill’s provisions in a future Personnel News publication.

The bill has various effective dates, but most of the sections impacting employers go into effect 90 days after the session adjourns or July 26, 2009. Information in the April 17 issue of AWC’s Legislative Bulletin giving January 2014 as the effective date was incorrect.

Family Leave Insurance Program (ESB 6158)

This bill passed the Legislature on the final day of the session and delays the implementation of the paid family leave program for three years. This program was created in 2007 to provide $250 per week for up to five weeks for individuals to care for a newly born or adopted child. The program was previously scheduled to begin on October 1, 2009, and is now delayed until October 1, 2012.

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