In Washington State, Dueling Bills Aim to Change Pension Benefits

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Lawmakers in Washington state are considering two separate bills that aim to tweak pension benefits for new government hires.

One proposal would cap the amount of income that can be used in the pension benefit formula. Another proposal would add two years to the retirement age required to receive full benefits.

The first measure, Senate Bill 5982, deals with retirement ages. Explained by the Bellingham Herald:

Senate Bill 5982 would add two years to the normal retirement age for people who enter most public employee pension plans in Washington after July 1, 2015. That would mean a standard retirement age of 67 for most new public agency employees, and a standard retirement age of 55 for new law enforcement officers and firefighters.

The new retirement ages wouldn’t apply to current or former public employees — only those who first enroll in a public pension plan after July 1.

Under the bill, public employees still would have the option of early retirement with partial benefits, as they do today. However, payments received with early retirement would be calculated based on the difference from the new full-retirement age.

The second proposal is titled Senate Bill 6005, and would deal with the maximum amount of income that can be used to calculate future benefits. From the Bellingham Herald:

[The bill would] set the state’s average annual wage as the maximum salary that could be used to calculate a public employee’s monthly pension benefit — even if an employee’s actual salary is higher than that. The state Employment Security Department reported that the state’s average annual wage in 2013 was $52,635.

The proposed limit on calculating pension benefits would apply only to those entering a plan after July 1, and wouldn’t include members of the Law Enforcement Officers’ and Fire Fighters’ Retirement System Plan 2 (LEOFF 2).

The two proposals would save the state around $12 billion over the next 25 years, according to calculations from the state actuary.

Public employee unions and other labor groups have come out against the bill.

 

Photo credit: “Washington Wikiproject” by Chetblong – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Washington_Wikiproject.png#mediaviewer/File:Washington_Wikiproject.png

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