PENSIONS ‑- RETIREMENT ‑- PENSION COVERAGE FOR EMPLOYEES OF NORTHWEST AIR POLLUTION AUTHORITY
Explanation of options available to the Northwest Air Pollution Authority regarding pension or retirement coverage for its employees under (a) federal social security, (b) the Washington Public Employees Retirement System and (c) a tax-deferred annuity program or similar contractual pension plan.
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August 9, 1979
Honorable H. A. "Barney" Goltz
State Senator, 42nd District
3003 Vallette Street
Bellingham, Washington 98225 Cite as: AGLO 1979 No. 27
By recent letter you requested our opinion on the following question:
"May the Northwest Air Pollution Authority, which was created under the provisions of RCW 70.94 [[chapter 70.94 RCW]], and its employees, establish a separate retirement plan in lieu of participation in the Federal Old Age Security Insurance System?"
We answer the foregoing question in the manner set forth in our analysis.
As we understand it, the Northwest Air Pollution Authority is a multi-county air pollution control authority formed by the boards of county commissioners of two or more contiguous counties in Northwest Washington in accordance [[Orig. Op. Page 2]] with RCW 70.94.057, a section of the Washington Clean Air Act now codified in chapter 70.94 RCW. As such, it constitutes an independent municipal corporation under RCW 70.94.081 which reads as follows:
"An activated authority shall be deemed a municipal corporation; have right to perpetual succession; adopt and use a seal; may sue and be sued in the name of the authority in all courts and in all proceedings; and, may receive, account for, and disburse funds, employ personnel, and acquire or dispose of any interest in real or personal property within or without the authority in the furtherance of its purposes."
From this it follows, in our opinion, that the authority is a form of "political subdivision" for the purposes of:
(1) RCW 41.48.030 relative to a social security coverage for its employees;
(2) RCW 41.40.410 authorizing optional entry of political subdivisions into the Public Employees' Retirement System (PERS); and
(3) RCW 41.04.250 authorizing political subdivisions to provide tax-deferred annuities or the like for their employees.
In terms of the first of these three propositions, we are informed that the majority of the employees of the Northwest Air Pollution Authority have recently rejected social security coverage at a referendum election conducted by the state OASI administrator under RCW 41.48.030, supra. We have also learned that an application for optional entry into the Public Employees' Retirement System is now pending. Presumably, that application will be accepted and PERS coverage will then be available.
Either in addition to or in lieu of such PERS coverage, however, we would conclude, in direct answer to your question, that the Northwest Air Pollution Authority may also contract for, and provide, tax-deferred annuity or similar coverage for its employees under the provisions of RCW 41.04.250 which expressly authorizes any county, municipality or other political [[Orig. Op. Page 3]] subdivision of the state to do precisely that. Moreover, we also note the further important provision of the concluding paragraph of RCW 41.04.250,supra:
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"Coverage of an employee under a qualified pension plan, contract for a deferred annuity or deferred compensation plan under this section shall not render such employee ineligible for simultaneous membership and participation in the pension systems for public employees which are provided for by chapters 41.26, 41.32 and 41.40 RCW."
It is hoped that the foregoing will be of assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General