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• Legislature Update/Alert
• House & Senate Rosters, Committees and Contact your legislator
• How to Testify About a Bill

To look up additional information regarding bills or to read the bills, click here and enter bill number: http://www.leg.wa.gov/wsladm/bills.cfm

Gain Sharing Facts

Preserving the gain sharing benefit is one of our two top priorities this session.  Here is some background on the issue. 

How are pensions funded? Pensions are funded through a combination of contributions by employees, employers (state and local governments) and return on investments.

 What is the expected rate of return on the pension funds? The state actuary targets an average eight percent earnings per year on investments to help pay benefits.  Some years will be higher, others lower. 

What is gain sharing? A law passed in 1998, when the stock market was booming, gave members of Plans 1 and 3 a share in “extraordinary gains” on the pension funds. 

 How does this work? When returns on retirement system investments exceed 10 percent on a four-year rolling average, retirees in PERS 1 and TRS 1, and all members of Plans 3 receive a share in the “extraordinary” gains.  Half the amount over 10 percent goes to the members of the systems. The other half is used to pay down the unfunded liability. 

 How do we get the money? Retirees in Plan 1 get a permanent increase in the Uniform COLA for the year the distribution is made. In 1998, 10 cents per month per year of service was added to the Uniform Cola for that year.  In 2000, 28 cents was added.  Plan 3 members get money put into their private accounts based on their years of service. 

 When is gain sharing supposed to happen again? The state actuary projects that gain sharing should “trigger” at the end of 2007 when investment returns are in.  A distribution of approximately 18 cents per month per year of service should be added to Plan 1 retirees COLA in 2008 – roughly $5.10 per month for the average retiree.  Plan 3 members would receive $133 per year of service credit in their private accounts.

 What is the controversy over gain sharing? When passed, gain sharing was said to be a cost-free benefit.  In 2003, the new actuary told lawmakers that there is a cost in lost investment income and that the Legislature must pay for future gain sharing benefits.  Further, there is language in the gain sharing law that says it is not a contractual right.  Active and retired Plan 3 employees are threatening to sue if gain sharing is repealed because they were never told that gain sharing could be taken away.  Some members of the Legislature are saying that gain sharing is too expensive and must be abolished.

What are the current proposals? As of now, only one.  The governor’s budget proposes to five Plan 1 members an additional five cents added to the Uniform COLA and to end gain sharing after that.  This proposal amount to 50 cents on the dollar compared to gain sharing’s value to retirees.  The proposal for Plan 3 members is the option to make a complicated shift to a Plan 2 look-alike program.  The Select Committee on Pension Policy made no recommendation on gain sharing, preferring either to maintain the status quo or allow the Legislature to decide what to do.

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HOW TO TESTIFY ABOUT A BILL

1. Be prompt ~ Arrive at least 10 minutes before the hearing.
2. Do your homework ~ Make sure you have the latest copy of the bill and any amendments. If you have suggestions for alterations to the bill, provide them, in writing, to committee clerks.
3. Sign in ~ Testimony sheets are posted near the entrance to the hearing rooms. Each bill has a seperate sign-in sheet. Find the bill you are interested in and provide your name, address and telephone number in the appropriate places.
4. For or against ~ You will be asked to note whether you support or oppose the bill. Many committee chairs take testimony alternately from proponents and opponents.
5. Be concise ~ When your name is called, move to the table with the microphone. Speak clearly and be concise. Don't ramble or stray from the topic at hand. State your case. If the agenda is full, people testifying often are limited to three minutes.
6. Don't read your testimony ~ Instead, give written copies of it to the committee clerk. Be prepared to answer questions and be polite.