Retirement & Health Benefits- February 7, 2025

“Politics is too serious a matter to be left to the politicians.”

Charles de Gaulle

Committee hearings, Executive Sessions, and floor actions are now taking place at an increasing pace as various policy and fiscal deadlines approach.

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

1. SB 5113/HB 1292 creates an annual increase in 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.

2. 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).

3. SB 5085 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.

   What has been clear is that legislators are aware of the surplus and may make attempts to transfer some of the surplus to fund other programs.

4. SB 5114 concerns 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.

5. SB 5086/HB 1330 seeks to consolidate PEBB and SEBB in some fashion. SB 5086 had a public hearing on 1/30 before the 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.

6. 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 Plan 3 to switch into Plan 2 if they so desire.

7. HB 5478 concerns benefits authorized to be offered by the public employees’ benefits board. This bill would allow HCA to the following employee-paid, voluntary benefit plans:

   • Emergency transportation
   • Identity protection
   • Legal aid
   • Long-term care insurance
   • Noncommercial personal automobile insurance
   • Personal homeowner’s or renter’s insurance
   • Pet insurance
   • Specified disease or illness-triggered fixed payment insurance, hospital confinement fixed payment insurance
   • Travel insurance.

   It is scheduled for a public hearing before Senate Heath 2/6

8. HB 1790 increases defined benefit accrual for specified years of service in the state retirement systems. For years of service earned after the effective date of this section, a member of the retirement system shall receive an additional one-half of one percent of such member’s average final compensation for each year of service beyond 30 years.

   This bill was a request from WSSRA to attract and retain experienced staff while also demonstrating the work of WSSRA to potential members.

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

1. HB 1140: Establishing empowerED scholarships using educational savings accounts.

   This bill will establish a Scholarship Program (Program) to provide parents meeting certain requirements with money for qualifying expenses related to the education of their public school-aged children for use in private and/or charter schools. Moneys that are provided to parents through the Program are deposited into individual education savings accounts (savings accounts) and must be accessible through a debit card or other electronic means.

   Parents may use the moneys provided from the Program for qualifying expenses, examples of which include:

   • tuition, fees, or both at a private school
   • tutoring and other services with a direct nexus to academics
   • curricula and other materials necessary to provide home-based instruction; fees for nationally standardized norm-referenced achievement tests and examinations related to college or university admission
   • postsecondary education and workforce program costs; computer hardware and technological devices primarily used for an educational purpose
   • expenses related to transporting a student to and from educational activities and services, and related therapies and services.

   This bill had a public hearing on 2/6 before House Education.

2. 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 provides 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.)

3. 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 2/2 before Senate Labor. Again, no fiscal note is available at this time.

4. 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.

5. 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.

6. SB 5378: Expanding access to grants within the paid family and medical leave insurance program for small school districts.

   This bill makes certain small school districts eligible for paid family and medical leave grants. The following employers may apply to ESD for a grant:

   • Employers with 51 to 150 employees
   • Employers with 50 or fewer employees who are assessed all premiums
   • Employers classified as school districts of the second class, those having less than 2000 pupil
   The bill had a public hearing 2/3 before House Labor.

Fred Yancey
The Nexus Group LLC