Retirement & Health Benefits- January 24, 2025

“Everything comes at a cost. Just what are you willing to pay for it?”

Serena Williams

Committee hearings have sped up as have Executive Sessions where bills are being passed out of their committees. The process of legislating continues at a brisk pace.

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

1. The Select Committee on Pension Policy had unanimously approved agency request legislation to restore the permanent COLA for TRS/PRS Plans 1 members. SB 5113/ HB 1292 creates an annual increase to the retirement benefits of retirees in the Public Employees' Retirement System and the Teachers' Retirement System Plan 1, of up to 3 percent. A hearing before the Senate Ways and Means Committee will be held Jan. 23^rd. Cost is projected at
   $92 Million for 2025-27 rising to $138 Million in 27-29 and continuing to increase.
   
   
2. That is why SB 5357 has been introduced. That bill resets rates for past benefit enhancements and amortizes the cost over a 15-year period (instead of the current 10-year period.). This bill provides that the cost of the new Public Employees' Retirement System and Teachers' Retirement System Plan 1 benefit improvements be amortized over a 15-year period and modifies (reduces) rates set by the Pension Funding Council for the 2025-2027 fiscal biennium. The bill was heard 1/23 before the Senate Ways and Means and testimony favored SB 5113.
   
   
3. SB 5085 has been introduced to establish a Legacy Retirement System. The bill merges the assets, liabilities, and membership of Law Enforcement Officers' and Firefighters' Retirement System Plan 1, Public Employees' Retirement System Plan 1 (PERS Plan 1), and the Teachers' Retirement System Plan 1 (TRS Plan 1) retirement systems into the new Legacy Retirement System. This bill creates an annual cost of living adjustment to the retirement benefits of retirees in the PERS Plan 1 and TRS Plan 1, of up to 3 percent. It also eliminates the remaining unfunded actuarial accrued liability and benefit improvement rates, 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 was held Jan. 23^rd. LEOFF members objected to the use of these dollars.
   

4. SB 5114 has been introduced concerning covering the premium costs of insurance during the month of one’s death. It provides a full month of public pension benefits paid in the month that a retiree dies. Senate Ways and Means held a hearing on the bill Jan. 23^rd.
   
   
5. There has been no action on updating 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. However, there is little data supplied from the field that shows a need, so this change is not likely to occur. The opportunity will lapse.
   
   
6. SB 5086/HB 1330 have been introduced. These bills seek to consolidate PEBB and SEBB. The Health Care Authority had recently submitted a report looking toward consolidation. A fiscal note has been prepared but is not available yet. SB 5086has been scheduled for public hearing on 1/30 before Senate Ways and Means Committee. More information is needed in order to assess this bill.

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A selected intro to some bills that could have fiscal impact /costs to districts:

1. HB 1213: Expanding protections for workers in the state paid family and medical leave program.

This bill: Reduces the minimum claim for benefits under the Washington Paid Family and Medical Leave (PFML) Program from 8 consecutive hours to 4 consecutive hours.

It is scheduled for Executive Session by House Labor on 1/31. No fiscal note is available. (So, the committee may be voting this bill out during the planned executive session without any sense of the costs to those most affected.)

2. SB 5041: Concerning unemployment insurance benefits for striking or lockout workers.

This bill: Allows individuals unemployed due to a labor strike to receive unemployment insurance (UI) benefits following a specified disqualification period and the waiting week, provided that the labor strike is not found to be prohibited by federal or state law in a final judgment.

3. SB 5291/HB 1415: Implementing the recommendations of the long-term services and supports trust commission.

These bills: Prohibit out-of-state participants from withdrawing from the Long-term Services and Supports Trust Program (Program).

SB 5291 has been scheduled for Executive Session on 1/31 before Senate Labor. No fiscal note is available.

4. SB 5292: Concerning paid family and medical leave rates.

This bill: Requires the Employment Security Department Commissioner to set the paid family and medical leave program premium rate based on the Office of Actuarial Services annual report.

The bill has a public hearing 1/21 before Senate Labor. The fiscal note details agency projected costs to implement the bill but there was no projection of costs on employers.


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.