A House budget committee gave its unanimous blessings Tuesday to a bill that cleans up small errors in a Washington state pension reform bill passed in 2011. The original reform, House Bill 1981, had reined in abuses of a so-called “retire-rehire” law that was intended by then-Gov. Gary Locke in 2001 to retain key school personnel who were near retirement age.
The Locke-era bill had let them collect retirement benefits after returning to the job.
The sweeping reform bill passed two years ago was meant to end abuses of the early-retirement option. But it had drafting errors that kept some workers in the Public Employment Retirement System from going back to work part time without having retirement pay suspended. That was far more restrictive than anyone intended.
The latest change in law was a recommendation of the Legislature’s Select Committee on Pension Policy and it lacks critics. House Bill 1226, drew no testimony when it got a short hearing in House Appropriations on Jan. 29. It now moves to the House Rules Committee for referral to a full House vote.
Committee staffer David Pringle told lawmakers that the new bill lets a retired employee in the Public Employees’ Retirement System be re-employed for up to 867 hours a year without having benefits suspended. That compares to almost 2,100 hour year for a full time worker.
Under the change, a PERS retiree could return to a job that ordinarily would make him or her eligible for retirement benefits in PERS, the School Retirement System or the Teachers Retirement System – without harm.
Republican Rep. Cathy Dahlquist of Enumclaw pointed out last month during a hearing that the original law passed under Locke’s administration had been misused. She said superintendents of school districts were using it “when that really wasn’t the intent.’’ Locke had intended it as a way to retain valuable teachers.
The law also was stretched by workers in general government agencies, including the Code Reviser’s Office.
Before the law of 2001, a worker could have worked up to half-time without losing benefits, according to committee staff. But that year, rule changes authorized post-retirement work for up to 1,500 hours for PERS 1 and TRS 1 members. When the reform of two years ago ended that practice, it inadvertently closed off options for TRS 2 and 3 employees.