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Bill would phase out pensions for state workers

MONDAY, JAN. 13, 2014, 12:49 P.M.

SEATTLE — A state lawmaker wants to offer a $10,000 incentive to state employees who agree to move away from the state pension system into a 401(k)-style retirement package.

Sen. Doug Ericksen’s proposal comes after Boeing’s successful campaign in recent weeks to pressure Machinists into surrendering their traditional pensions. The Republican from Ferndale plans to introduce legislation Monday that would end pensions for new state hires while offering the incentive to current workers.

“If it’s good enough for Boeing, it should be good enough for the employees of Washington state,” Ericksen told The Seattle Times.

His plan would end pensions for new state hires in addition to offering the incentive to current workers. It would apply only to workers in the state’s Public Employees Retirement System (PERS).

Other public employees such as teachers and state patrol officers have separate pension plans that would not be affected. State lawmakers, however, would be affected.

Legislation to curtail public pensions is unlikely to pass in the 60-day legislative session that began Monday, the newspaper reported. Top Democrats say the state pension system is in good shape, and that they’ll oppose any move to end pensions. Gov. Jay Inslee said he’d oppose efforts to go after public pensions.

But Ericksen and others argue that the Boeing deal — which prominent Democrats including Inslee pushed Machinists to vote on — should stir a long-term debate on the state’s own benefit offerings.

Boeing is paying a $10,000 signing bonus to 31,000 Machinists this month as part of the controversial contract extension that ensures the new 777X aircraft will be assembled in Washington state. But it replaces the union’s cherished pensions with a 401(k)-style defined-contribution plan.

Ericksen’s proposal would cap state costs for the $10,000 incentive payments at $20 million. That means only 2,000 employees could receive payments for moving off pensions in the next year.

House Majority Leader Pat Sullivan, D-Covington, and Senate Democratic Leader Sharon Nelson, D-Maury Island, said the state has a healthy pension system, with unfunded liabilities in only a couple of long-closed pension plans.

“I don’t think anybody can say with a straight face that we haven’t done a responsible job in funding our pension system, but also making changes to make sure it’s healthy,” Sullivan said.

Tim Welch, a spokesman for the Washington Federation of State Employees, told the Times there is no financial need to end public pensions, calling efforts to do so “a mean and nasty effort to harm public employees.”

But state Senate Majority Leader Rodney Tom predicted it would be difficult for the state to sell tax increases for schools or roads if public employees continue to hold on to pensions unavailable to most workers.

About 144,000 retired state workers receive annual pensions averaging about $21,000 a year, according to the actuary’s office.

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