Retirement & Health Benefits- January 17, 2025

“Waste neither time nor money but make the best use of both.”

Ben Franklin

The Legislative Session has begun, and hearings are being held on numerous bills. The main task of the legislature is to pass a new biennial budget and an updated supplemental budget. And the press and caucus attention has been focused on the issue of dollars and cents given a projected deficit of $6-$12-billion-dollar deficit (depending on which party is talking.) As Jackie Mason says, “I have enough money to last me the rest of my life (biennium) unless I buy something.”

Meanwhile, a brief summary of some selected bills and/or issues is below:

• The Select Committee on Pension Policy has unanimously approved agency request legislation to restore the permanent COLA for TRS/PRS Plans 1 members. Given the fiscal projected state deficit, it will be an uphill struggle for passage. Costs to employers/employees will be spread over 15 years. (SB 5113) A hearing before the Senate Ways and Means Committee will be held Jan. 23^rd.
  
  
• SB 5085 has been introduced to establish a Legacy Retirement System, merging PERS/TRS Plans 1 and LEOFF Plan 1 into a single system. This would also establish and fund a permanent COLA for PERS/TRS Plans 1 members. A hearing before the Senate Ways and Means Committee will be held Jan. 23^rd.
  
  Some background: SB 5085 would provide short and long-term relief to state and local government budgets by getting them out from under their ongoing obligations to TRS & PERS 1: the UAAL and the ad hoc COLA costs.

  
  Advantages of such a plan:

  • Permanently solves the TRS 1/PERS 1 COLA issue.
  • All TRS 1/PERS 1 retirees receive the ongoing COLA that other plans offer. No more ad-hoc COLAs will be needed. The state and local governments will save hundreds of millions of dollars. Existing employer obligations to TRS 1/PERS 1 will be erased. Money will be saved in both the short and long term. This is one of the only legal ways to utilize the LEOFF 1 surplus to address the current budget shortfall. No members will lose benefits. LEOFF 1 members will continue to have the most generous pension plan offered by the state.
    
    
• SB 5114 has been introduced concerning covering the premium costs of insurance during the month of one’s death. This is a continued carry-over of an issue from last session. Senate Ways and Means Committee will hold a hearing on the bill Jan. 23^rd.
  
  
• All PEBB Medicare plans offered now include Part D (prescription drug coverage) although different reimbursements depend upon the plan chosen. Also, there is now a $2,000 maximum out of pocket cost.

• WSSRA, WSSDA, WASA, and AESD are working to see if a sunset provision in HB 1699 which currently allows retired administrators to work in smaller districts for 1040 hours. This opportunity will end July 1, 2025, if not changed. Once removed, there are no provisions for retired administrators to return to work at all, even under reduced hours. However, there is little data supplied from the field that shows a need, even though a request has been made to furnish any such data.

• SB 5086 has been introduced. This bill seeks to consolidate PEBB and SEBB. The Health Care Authority has recently submitted a report looking toward consolidation. More information is needed in order to assess this bill.

Key Facts About Legislative Bills:

• No Limits: Legislators can introduce an unlimited number of bills, even as late as the last day of the session.
• Two-Year Lifespan: Bills introduced in odd-numbered years remain active for the two-year legislative biennium. Bills from the 2024 session have expired and must be reintroduced with new numbers if desired.
• Consideration is Not Guaranteed: There is no obligation for an introduced bill to be heard, although some states mandate hearings for all submitted bills.
• Bill Volume: 2,000 to 3,000 bills are expected to be introduced. However, few will be given a hearing, and only about 10% of these will become law.
• Budget Priority: Legislature’s only mandated task is to pass a biennial operating budget. Failure to do so by June 30 would disrupt state operations starting July 1.

Fred Yancey
The Nexus Group LLC

DISCLAIMER: This information not intended to be for official, legal advice on retirement issues. As always, contact DRS or PEBB for a definitive answer/confirmation of your status and situation.

Important: It is always better to call ahead regarding pension information and health insurance questions rather than making a wrong choice and then either trying to undo it or having to live with what may turn out to be a poorer choice.