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Originally published Tuesday, April 10, 2012 at 6:01 PM

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Wash. Senate approves penalties for early retirees

The state Senate is in favor of new penalties for state workers who take early retirements.

Associated Press

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How about hold off any and all benefits until 62! Also if the workers are offered to... MORE

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OLYMPIA, Wash. —

The state Senate is in favor of new penalties for state workers who take early retirements.

Senators approved the measure Tuesday evening by a margin of 27-22, clearing a major hurdle in the quest by lawmakers to complete their work.

State workers who retire before the age of 62 are already penalized with lower pension benefits. Under the new bill, those penalties will increase to as high 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 would 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 IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Washington lawmakers on Tuesday agreed to increase penalties for state workers who take early retirement, making a pact that had eluded them for months and delayed final action on the state budget.

Democratic and Republican leaders said they hoped to quickly move the measure out of the Senate in a final scramble to finish work before the special session ends at midnight. They said negotiators were still working on other areas but are largely in agreement about where things are headed.

The pension issue was a major sticking point holding up the state budget.

Democratic Sen. Jim Kastama said the pension plan would further shrink pension benefits for state workers who take early retirement. The plan would 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.

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Mike Baker can be reached at https://www.facebook.com/mikebakerap.

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