Committee advances bill raising small‑overpayment waiver threshold and defining ‘major fraction’ for service credit

Senate Bill 851 was advanced by the House Committee on Labor and Workplace Standards on April 23 after an extended work session that focused on two technical PERS changes: raising the dollar threshold under which the Public Employees Retirement Board may waive recovery of overpayments and defining the statutory standard for accrual of a month of service credit.

Heather Case, Senior Policy Advisor at PERS, told the committee that for waiver‑purposes the agency aggregates overpayments and improperly made payments into invoices and that in the 2024 calendar year the total dollars that resulted in invoices was about $17,000,000 — roughly two‑tenths of 1% of annual benefit expenditures. She said outstanding receivables at year‑end were about $11,000,000, noting many of those are placed on payment plans and much of the invoiced amount results from payments to deceased members whose deaths are hard to verify if they occurred out of state.

Heather Case said the PERS finance team reported only 185 accounts were waived for amounts under the $50 threshold in 2024. The finance staff estimated that increasing the waiver threshold from $50 to $200 would add only a modest increase in waived dollars (staff estimated under $1,000 additional waivers for 2024, based on current case circumstances) while saving staff time chasing small amounts. Case said the board is not required to waive all invoices under the threshold and that members can appeal or request investigation on particular accounts so individual disputes would still be pursued.

Committee discussion also covered the bill’s proposal to define “major fraction of a month” for accrual of service credit — replacing the current mix of standards in administrative rule, including a 50‑hour rule used by staff as an override in appeals. Heather Case and Director Kevin O’Lang explained the statutory definition would codify that a member is credited for a month if employed for more than half of the calendar days in that month; the change is intended to align rules, staff practice, and statute and reduce reliance on ad‑hoc staff overrides.

Director Kevin O’Lang described agency efforts to reduce receivables, noting receivables had declined from a historic high after a prior clawback period and that the agency is piloting new tools to identify deceased members sooner to reduce overpayments. He said PERS pays out about $6.0 billion annually and receives about $3.5 billion in contributions; the invoice totals are small relative to those flows, but the agency balances diligence with staff resource use.

Vice Chair Munoz moved Senate Bill 851 to the floor with a due‑pass recommendation. Desi called the roll; the record shows Representative Walther Davis excused and Representative Craig had left; the motion passed on a roll call with Representative Nelson voting yes, Representative Sharp no, Vice Chair Omer no, Vice Chair Munoz yes and Chair Graber aye (record reflects those names and votes). Committee members asked that the agency continue work to reduce receivables and pursue technological tools to identify deaths more quickly.

Motion: Vice Chair Munoz moved Senate Bill 851 to the floor with a due‑pass recommendation.

Vote (recorded in transcript): Representative Walther Davis — excused; Representative Craig — left; Representative Nelson — yes; Representative Sharp — no; Vice Chair Omer — no; Vice Chair Munoz — yes; Chair Graber — aye. Motion passed.