Retirement & Health Benefits- January 31, 2025

“For good ideas and true innovation, you need human interaction, conflict, argument and debate.”

Margaret Hefferman

TWIO 1/31/25

Committee hearings, Executive Sessions and limited floor actions are now taking place at an increasing pace.  

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

1. The legislative members from Washington State School Retirees’ Association (WSSRA) have been zooming legislators this week to advocate for pension reforms. Three bills of particular focus are: 

• 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 was held Jan. 23rd. Cost is projected at $92 Million for 2025-27 rising to $138 Million in 27-29 and continuing to increase. 

• SB 5357 has been introduced and heard on 1/23. That bill resets rates for past benefit enhancements and amortizes the cost over a 15-year period (instead of the current 10-year period.). 
  
  • 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. WSSRA is opposed to this bill as it does not address the need for a COLA. 
• SB 5085 has been introduced and heard. It seeks 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. 
  • 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.
  • Eliminates the remaining unfunded actuarial accrued liability and benefit improvement rates., merging PERS/TRS Plans 1 and LEOFF Plan 1 into a single system.
  A hearing before the Senate Ways and Means Committee was held Jan. 23rd. LEOFF members objected to the use of these dollars. They continue to contact legislators expressing their opposition. It is unclear what their objections are since there is no loss of benefits to its members. What was also clear is that 1) Legislators are aware of the surplus and may make attempts to transfer some of the surplus to fund other programs. (Governor Inslee’s budget transferred $1 billion of the excess into the general fund.)  2) Pressure/advocacy needs to continue to push for the bill’s intended use of those surplus funds.

2. 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. 23rd.

   There is a lot of sympathy for this bill. However, the fiscal note ($18 million) may be an issue of concern.

3. SB 5086/HB 1330 have been introduced. These bills seek to consolidate PEBB and SEBB. The Health Care Authority has recently submitted a report looking toward consolidation. A fiscal note has been prepared but is not available yet. SB 5086 had a public hearing on 1/30 before Senate Ways and Means Committee.  This bill would consolidate the Public Employees Benefits Board Program and the School Employees Benefits Board programs into the newly created Washington Employees and Retirees Benefits Board. Indeterminate cost.

4. HB 1642: would provide additional plan choice to members of the teachers' retirement system plans 2 and 3, the school employees' retirement system plans 2 and 3, and the public employees' retirement systems 2 and 3. It is awaiting a hearing before House Appropriations.

   This bill is a WEA request bill. It would allow members in Plans 3 to switch into Plan 2 if they so desire.

5. HB 5478: Concerning benefits authorized to be offered by the public employees' benefits board. This bill would allow HCA to the following employee-paid, voluntary benefit plans: 39 (a) Emergency transportation; (b) Identity protection (c) Legal aid; (d) Long-term care insurance; (e) Noncommercial personal automobile insurance; (f) Personal homeowner's or renter's insurance; (g) Pet insurance; (h) Specified disease or illness-triggered fixed payment insurance, hospital confinement fixed payment insurance, (i) Travel insurance. It is scheduled for a public hearing before Senate Heath 2/6.

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.
   • Extends employment protection rights in the PFML Program to any employee who began employment with their current employer at least 90 calendar days before taking leave, regardless of the size of the employer.
   • Allows employers to prevent stacking of certain employment protection rights by extending employment protection in the PFML Program to periods of unpaid leave protected by the Federal Family and Medical Leave Act, so long as the employer provides certain notices to the employee, and providing that employment protection expires after certain periods.
   • Expands health care coverage protection during any period in which an employee receives PFML Program benefits and is also entitled to employment protection.
   It is scheduled for Executive Session by House Labor on 1/31. Costs to state/employers from fiscal note are indeterminate. (So, the committee may be voting this bill out during the planned executive session without any sense of the costs to those most affected.)
   

1. 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.
   • Removes the provision disqualifying an individual for UI benefits based on an employer-initiated lockout resulting from a strike against another employer in a multi-employer bargaining unit.
     
   Executive Session has been scheduled Feb. 2 before Senate Labor. Again, no fiscal note is available at this time.
   



2. 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).
   • Make the exemption from the Program automatic for active-duty military service members with off-duty civilian work.
   • Allow an exempt employee who previously attested to having long-term care insurance to rescind the exemption prior to July 1, 2028.
   • Allow for a limited pilot program in 2026 to assess the Program's processes and system capacities.
   • Create standards and requirements for supplemental long-term care insurance policies designed for coverage after program benefits are exhausted.
     
   SB 5291 has been scheduled for Executive Session on 1/31 before Senate Labor. Fiscal impact is indeterminate.
   
   

3. 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.
   • Mandates the Office of Actuarial Services annual report to provide for a rate to close the rate collection year with a three-month reserve, in addition to the current requirement to maintain a four-year solvency.
   • Eliminates the statutory formula used to calculate the rate and the 1.2 percent rate cap.
   The bill has a public hearing on 1/21 before Senate Labor. The fiscal note details the agency projected costs to implement the bill but there was no projection of costs on employers.
   
   

4. SB 5041

   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.
   • Removes the provision disqualifying an individual for UI benefits based on an employer-initiated lockout resulting from a strike against another employer in a multi-employer bargaining unit.