Garnishment reform signed, more work ahead
April 3, 2012 | By Washington House Democrats
OLYMPIA—New reforms to Washington’s garnishment statutes will cut paperwork costs for businesses and allow struggling wage earners to keep more of their money. But Rep. Roger Goodman, the lead sponsor of the reforms that were signed into law last week, says there is still more work to do to clear up issues raised by a recent state Supreme Court case.
“These reforms will allow wage earners to keep an additional $145 a month in their pockets as they pay off their debts,” said Goodman, D-Kirkland. “Small businesses will also see important savings because we streamlined the garnishment process and cleaned up a host of confusing forms and paperwork requirements.”
The increase in the amount of wages that debtors can keep reflects the first update of state wage-exemptions to garnishment in 25 years.
But Goodman said lawmakers will still need to address the issue of whether state-administered pensions should be subject to garnishment in wrongful death cases or other extraordinary circumstances.
The wrongful-death issue arose after the state Supreme Court ruled in February that laws which exempt state-administered pensions from most types of garnishment don’t apply after the funds are deposited in the pensioners’ bank accounts.
The February ruling involved a case where a Tacoma police officer, Walter Copland, was convicted of first-degree manslaughter for killing Harvey Anthis. Bonnie Anthis, the widow of Harvey Anthis, won a civil suit against Copland and sought to collect the judgment from Copland’s pension.
The Supreme Court ruled that state law clearly prevents federal pensions from being garnished after the funds are transferred to the pensioner, but the law is unclear about whether that restriction applies to state-administered pensions. The court ruled that, in the absence of clear legislative intent, state-administered pensions can be garnished once the funds have been transferred to the pensioner.
“We were stunned,” said Goodman. “The pensions of 290,000 active and retired members of state-administered pension plans were suddenly open to garnishment for any purpose. The pensions of local police, firefighters, city and county employees, as well as state employees, were instantly put at risk by the court’s decision.”
In order to protect current and future retirees, Goodman amended his garnishment reform (House Bill 1552) to clarify that the exemptions to garnishing state-administered pensions apply both before and after pensioners receive their money.
“The tragedy—and I feel sick about it—is that restoring the long-standing state policy on garnishment worked against Bonnie Anthis,” said Goodman. “I think we need to change the law to ensure that she and others are treated justly in wrongful death cases, but we can’t do it overnight. We need a transparent process, with public hearings, and we need to bring together all involved parties to carefully consider the scope and potential consequences of any change we make.”
Goodman urged Gov. Chris Gregoire to ask the Legislature’s Select Committee on Pension Policy to examine whether pensions should be subject to garnishment in extraordinary cases, such as the wrongful death judgment won by Bonnie Anthis. Gregoire agreed and sent a letter to the committee on Thursday.
“I believe justice will win out in the end for Bonnie Anthis and others in similar situations, but it will take time to ensure any changes are done right,” Goodman said.