Retirement & Health Benefits - April 11, 2025

No one has a problem with the first mile of a journey. But it is not the start that matters. It is the finish line.

Anonymous

The race to the end is nearing, as floor sessions, debates and contested bills are acted upon.

Budget negotiations are occurring in backrooms in anticipation of a conference budget to be released, as early as Wednesday next week. Given Governor Ferguson’s pre-veto of the wealth tax, legislative leaders, (Democrats) are scrambling to cobble together other revenue sources.

Selected bills and/or issues still in play is below.

Re: Pensions:

To review: LEOFF 1 has a surplus of close to $3 Billion. How best to use those excess dollars?

This has been discussed previously, and the answer will lie within when the conference budget is released.

Meanwhile, TRS/PERS Plans 1 members are anxious and fearful. They need and are counting on a cost-of-living increase which all other plans automatically receive. The struggle remains between SSB 5085, HB 2034, ESSB 5357 and HB 1467.

1. SSB 5085: Merges the assets, liabilities, and membership of LEOFF 1, PERS Plan 1, and TRS Plan 1. It creates an annual cost-of-living adjustment to the retirement benefits of retirees in the PERS/TRS Plans 1 and TRS Plan 1 and eliminates the remaining unfunded actuarial accrued liability and benefit improvement rates.

   The bill saves the state over $600 million in General Fund (GF) dollars and city/local/school district governments over $400 million.

   The Senate proposed budget (SSB 5167) includes funding for this bill. The House budget does not. It does not appear to have any traction given the need for GF revenue to fund other needs deemed more worthy.

2. ESSB 5357: Reduces employer normal cost contribution rates for the PERS, TRS, SERS, and the Washington State Patrol Retirement System for fiscal year/school year 2026.

   Reduces the Plan 2-member contribution rates for PERS, TRS, and SERS for fiscal year/school year 2026. IMPORTANT This will indeed save district dollars in the short-term. However, it will add costs in the long term as proposed rates fall below what is needed to sustain steady funding.

   This bill passed Senate 48/0 and is on the House floor calendar awaiting action.

3. 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 © 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 passed Senate 48/0 and is awaiting House floor action.

4. SSB 5738: Permits individuals retired from PERS, TRS, SERS and the public safety employees’ retirement system additional opportunities to work for up to 1,040 hours per year while in receipt of pension benefits in non-administrative positions. In addition, someone who enters service in a second-class school district as either a district superintendent or an in-school administrator shall continue to receive pension payments while engaged in such service until the retiree has rendered service for more than 1,040 hours in a school year. This bill will sunset 1/1/2030.

   Passed Senate 41/7/1 and is in House Rules.

5. SB 5793: Concerning employer contributions and incentives for public and school employee health benefit plans.

   This bill suspends bargaining for 2027-2029 and eliminates Smart Health as a program offering. The legislature intends to set the employer contribution rates for employee health care benefits for the 2027-2029 fiscal biennium. Bargaining agreements reached for the 2027-2029 fiscal biennium shall not include employer health care contributions, wellness, or flexible spending account contributions, or any other provisions related to employee health care expenses.

   Funding for this bill is included in the Senate budget and is awaiting a hearing before Ways and Means.

6. HB 1936: Extending the expiration of certain school employee postretirement employment restrictions to 2027.

   It has been moved to the Senate floor awaiting action.

Bills with Fiscal Impact/Costs:

1. E2SHB 1213: Expanding protections for workers in the state paid family and medical leave program.

   This second substitute House bill: Extends employment protection rights and coverage protections in the Paid Family and Medical Leave (PFML) Program.

   It passed the House on 55/41/2 and is awaiting action on the House floor.

2. 2SHB 1524: Concerning workplace standards and requirements applicable to employers of isolated employees.

   This bill passed the Senate 37/12 and has been sent to the Governor for signature.

3. ESHB 1622: Allowing bargaining over matters related to the use of artificial intelligence. This bill requires most state and local government public employers to bargain with employees’ unions over the use of artificial intelligence technology that affects the employees’ wages or performance evaluations.

   This bill passed House 58/38/2 and has been sitting before Senate Ways and Means. Even if it does not move, this issue will be one for future actions/debates.

4. 2SHB 1788: Concerning workers’ compensation benefits. This bill modifies/increases the percentages of wages an injured worker, particularly those unmarried with children, may receive for workers’ compensation benefits.

   It is awaiting action on the Senate calendar for action.

5. ESSB 5041: An act relating to unemployment insurance benefits for striking or lockout workers.

   This bill passed the Senate 28/21 and is awaiting action on the House floor.

6. SSB 5101: Expanding access to leave and safety accommodations to include workers who are victims of hate crimes or bias incidents.

   This bill is in the Senate budget (Sec. 219(19) and is in House Rules.

7. ESSB 5291: Implementing the recommendations of the long-term services and supports trust commission.

   This bill is before House awaiting action on the floor.

Fred Yancey
The Nexus Group LLC