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Published: Tuesday, April 10, 2012, 9:42 p.m.

State Senate approves penalties for early retirees

OLYMPIA -- Washington lawmakers on Tuesday agreed to reduce benefits for future state workers who take early retirement, making a pact that had eluded them for months and delayed final action on the state budget.
The Senate quickly passed the measure Tuesday evening by a 27-22 margin. Republican and Democratic leaders said negotiators were still working on other areas but were largely in agreement about where things are headed.
The pension issue was a major sticking point holding up the state budget. House lawmakers briefly took up the measure Tuesday night but then stopped debate on it as leaders waited to see whether lawmakers had agreement on other matters.
State workers who retire before age 62 are already penalized with lower pension benefits. Under the new bill, those penalties will increase to as much as a 50 percent reduction for workers retiring at the age of 55.
The changes only apply to workers hired starting in May 2013. The plan is expected to save the state an estimated $1.3 billion over 25 years.
Lawmakers also agreed to reduce the assumed rate of return in the pension system to 7.7 percent instead of 8 percent. Some lawmakers viewed the 8 percent figure as overly optimistic.
"This will make the system more robust over the long-term," Kastama said.
Democratic Sen. Karen Fraser opposed the measure, saying it makes it harder for people to retire. She said the state wants to encourage younger teachers, but the latest plan will keep older workers on the job longer -- even if they are burned out.
"It will keep people who want to retire on the payroll longer," she said.
Story tags » LegislatureRetirement

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