BILL ANALYSIS                                                                                                                                                                                                    




          Appropriations Committee Fiscal Summary

                                SB 400  (Ortiz)

Hearing Date:4/19/99            Amended:4/6/99         
Consultant: Maureen Brooks          Policy Vote:P. E. & R.   
4-0                      
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BILL SUMMARY:    SB 400 increases the preretirement death  
benefits for PERS state and school members not covered by  
the federal Social Security Act by establishing a 5th Level  
in the 1959 Survivor Benefit Program (SBP) so that the  
benefit level is more comparable to that provided by social  
security.

This bill decreases the surviving spouse's eligibility age  
to 60 years and stipulates that the increased death benefit  
sunsets January 1, 2010.

                         Fiscal Impact (in thousands)
  
Major Provisions             1999-2000       2000-01       2001-02    Fund  

Death benefit       ----------no net state costs-----PERS

STAFF COMMENTS:  

The benefit increase proposed in this bill will be paid by  
surpluses in the 1959 Survivor Benefit Account.   There are  
sufficient surplus funds in the account to pay the state's  
costs for approximately 10 years, while members continue to  
pay $2 per month.   Although SB 400 contains a sunset after  
the ten year period, staff notes the state costs of the  
program if it were continued could range between $1 million  
and $2.5 million annually, since the 1959 SBP surplus would  
no longer be available to fund the state employer's share  
of this benefit.

The bill lowers the surviving spouses eligibility age from  
62 years to 60 years, however PERS estimates that the  
resulting cost difference would be minimal.

The 1959 SBP was designed to provide pre-retirement death  
benefits to PERS members not covered by the federal OASI  
program.  There are 4 benefit levels within the SBP.   










However, the benefits are fixed without any increases for  
cost of living adjustments.  The new proposed level 5 will  
bring the benefits closer to current OASI benefits.  SB 400  
increases the benefit to $750 per month for a single  
recipient, $1,500 for two recipients and $1,800 for two or  
more. 

This bill is similar to AB 2437 (Ortiz) which was vetoed by  
the Governor last year.