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New proposal would end fixed-benefit pensions for younger state workers; unions fighting back at hearing today

Post by Brad Shannon / The Olympian on Feb. 25, 2013 at 7:27 am with No Comments »
February 25, 2013 7:36 am
Sen. Rodney Tom
Sen. Rodney Tom

A new pension proposal from Senate Majority Leader Rodney Tom would use a 401(k)-style benefit option for certain Washington state employees younger than 45 years of age. Senate Bill 5856 gets a hearing at 1:30 p.m. today in the Senate Ways and Means Committee, and the Washington Federation of State Employees began denouncing the proposal in an alert to members late Saturday.

The proposal by Tom, a fiscally conservative Democrat from the wealthy enclave Medina, appears to go further than a plan last year from former Republican senator Joseph Zarelli, who sought to put new public-employee hires into the state’s hybrid Plan 3 pensions. Plan 3 offers two pieces – half is defined benefit and half is defined contribution, the latter being similar to 401(k) approaches.

Tom’s plan would lower the state’s matching contribution to pensions to just 80 percent of what employees put in.

Matt Zuvich, a lobbyist for the federation, said in the email alert:

“This bill would put public employees in a 401-k retirement account and leave in shambles a pension system rated in the top three in the country. This bill will cost a lot of money. A similar bill posted by Senate Republicans last year had a huge price tag to implement it. There is no fiscal note on this bill to be able to study, yet Tom will have a public hearing on Monday just the same.

“This bill creates no jobs, costs money and seems to only benefit those who would want that general fund money to profiteer with. One more attack on the middle class from the Senate ‘majority coalition’ and another sign that they have no respect for the work public servants do every day.”

The federation is encouraging members to show up for the hearing wearing their trademark green T-shirts. The disagreement is the latest in a growing rift between the state Senate majority and public employee unions.

Tom also is proposing to end collective bargaining over health-care benefits and to unilaterally impose terms for wellness programs. That bill was heard late last week.

And Republican Sen. Michael Baumgartner of Spokane is proposing to exempt the state’s newest agency, the Department of Enterprise Services, from the competitive contracting provisions of the Personnel Services Reform Act of 2002, which lets workers offer bids in competition for work identified for possible privatization.

Baumgartner’s bill also directs the state Office of Financial Management to evaluate the benefits of privatizing three state functions including custodial services, the state Motor Pool and DES’s real-estate brokering activities.

Baumgartner says his goal in Senate Bill 5717 is only to build on successes from is 2011 bill that exempted certain workers in another new agency, Consolidated Technology Services, and merged five agencies into three to save money.

OFM already has selected web services and mail delivery outside Thurston County for an evaluation of cost savings if the activities were contracted out under terms of the 2011 reforms. Decisions on those are pending. The agency also is reviewing bulk printing.

Sen. Karen Keiser, D-Des Moines, and Sen. Steve Conway, D-Conway, have criticized Tom’s Republican-dominated majority in the Senate for also moving four bills that would create exemptions in so-called prevailing wage laws, which require that public-works projects pay workers a wage comparable to what is paid in each county’s largest city.

Stay tuned.

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