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Senate Republicans move ‘lite’ version of state worker pension reform; wellness and contracting out bills also OK’d by budget committee

Post by Brad Shannon / The Olympian on Feb. 28, 2013 at 7:28 pm with No Comments »
February 28, 2013 7:29 pm
Sen. Barbara Bailey

Facing a deadline this week for passing fiscal bills, the Senate Ways and Means Committee gave approval early Thursday evening to three proposals opposed by state-employee groups.

One proposal, Senate Bill 5851, gives new state employees the option of entering into a 401(k)-style retirement plan, called the Washington Public Employees Savings Plan.

Offered by Republican Sen. Barbara Bailey of Oak Harbor, the concept appears to be a lighter, kinder version of the one pushed by Senate Majority Leader Rodney Tom, who wants  to force new hires and current state employees younger than 45 into defined contribution plans.

SB 5851 cleared the committee, despite Democratic objections, on a voice vote. It goes to Senate Rules on its way to a floor vote.

Pension reform is one of many ideas  the Republican-dominated Majority Coalition Caucus may use as bargaining chips with the liberal, Democrat-led House once budget negotiations begin late next month.

Democratic Sen. Steve Conway of Tacoma warned that Bailey’s bill needed careful study and should be sent to the bipartisan Select Committee on Pension Policy, which studies changes to the state’s multibillion-dollar pension system between legislative sessions. He and Bailey serve on the SCPP.

“This bill has too much uncertainty and could undermine our state pension system,’’ Conway said.

Bailey said the idea has been floated before to use a defined contribution plan – which fixes the amount that the state and worker contribute, but which does not promise a fixed monthly pension like most state worker pensions do today.

“I believe there is great potential here. I also believe it is important in this day and age to give our public employees options. The private sector is doing this,” Bailey said. “It gives them more flexibility … should they choose to make career changes.’’

The new savings plan would be available for state, K-12 school and municipal workers who are eligible for membership after July 1, 2014, in several public-sector plans – known by their acronyms as PERS, TRS, SERS, and PSERS Plans 2 and PERS, TRS, and SERS Plans 3.

Two other bills watched by state employee groups also passed out of the committee on voice votes, with Democrats objecting Thursday.

SB 5717, sponsored by Republican Sen. Michael Baumgartner of Spokane, lets the Department of Enterprise Services avoid collective bargaining restrictions if it wants to contract out for software.

Baumgartner’s bill is a sequel to the 2011 bill that consolidated five agencies into three and, by his estimate, saved close to $40 million at DES. He initially proposed to have the state Office of Financial Management study three DES functions – Motor Pool, custodial services, and real estate brokering and leasing – to see if the state could save money by giving the work to private businesses.

But some of the owners of buildings leased to the state voiced criticism in a hearing this week, warning it could lead to corruption, and state employees complained they could not compete for the contracts, which current law allows any time a government function is offered up to the private sector.

Baumgartner has dropped the real estate brokering piece from the bill. But Democratic Sen. Sharon Nelson of Vashon Island said the state should still review that particular function of government – if Baumgartner’s bill moves forward.

Democratic Sen. Karen Fraser of Thurston County said the Legislature needs to be careful in estimating costs and savings from anything that is contracted out.

One other bill approved Thursday, SB 5811, also is sponsored by Tom.

It removes health-care from mandatory bargaining between the unions and governor, and it mandates a wellness program in state employee health plans that use strong incentives – including premium discounts for healthful activities and premium hikes for unhealthy behaviors such as smoking or obesity.

Sen. Karen Keiser, D-Des Moines, said she favors a different model than Tom’s proposal to require participation and impose terms.

“I wholeheartedly support wellness efforts. But I want them to succeed,” Keiser said, pointing to King County’s collaborative approach that brings the workers and employer together in designing the incentives. “It may be an exercise in futility if it is something all parties cannot support.’’

Tom’s approach received criticism in a hearing last week.

All of the bills face a steep climb in the House – if they get that far.

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