Retirement & Health Benefits – March 14, 2025

After this latest deadline, focus shifts to legislators holding town halls and committee hearings.

A brief summary of selected bills and/or issues still in play is below.

There is a real difference between the House and the Senate leadership in how to deal with the surplus funds in LEOFF 1 and the need for a COLA in TRS/PERS Plans 1. The struggle appears to be between SSB 5085 and HB 2034. (See below)

1. SSB 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. The firefighters argue that this proposal is illegal. The bill will seek approval from the IRS which implies uncertainty as to legality. See HB 2024 below. The bill passed the Senate 28/21 and has been moved to House Appropriations which held a public hearing 3/1/3/25.
2. 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. Both of these bills are currently stalled but could be deemed NTIB.
3. ESSB 5357: Removes revisions related to resetting and reamortizing supplemental pension contribution rates over a new 15-year period. It modifies (chart given) changes to the normal cost rates adopted by the Pension Funding Council. That bills reset rates (mostly reductions) for past benefit enhancements and base rates. It passed the Senate 48/0. SB 5357 has been moved to Rules. HB 1467 remained in House Appropriations. Either bill may be deemed NTIB.
4. 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 the Senate 48/0/1 and has been referred to House Appropriations.
5. SSB 5738: Permits individuals retired from the public employees’ retirement system, the teachers’ retirement system, the school employees’ retirement system, 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. This bill passed the Senate 41/7.
6. HB 1474: Providing a benefit increase to certain retirees of the public employees’ retirement system plan 1 and the teachers’ retirement system plan. This bill provides a one-time 3 percent increase to the retirement benefits of retirees in the Public Employees’ Retirement System and the Teachers’ Retirement System Plan 1, up to $110 per month. This bill is in Rules. It is a bill that WSSRA and its members view as a fallback option should SSB 5085 (above) not be successful in the House. Likely NTIB.
7. HB 1936: Extending the expiration of certain school employee postretirement employment restrictions to 2027. Until January 1, 2027, retirees from the Teachers’ Retirement System are permitted to collect retirement benefits for the first 1,040 hours per calendar year when either: (1) are employed in a non-administrative position; or (2) having retired before January 1, 2022, are employed in a second-class school district as a district superintendent or an in-school administrator position. The bill passed the House 97/0/1 and has been assigned to Senate Ways and Means.
8. HB 2034: Concerning termination and restatement of plan 1 of the law enforcement officers’ and firefighters’ retirement system. This bill terminates the Law Enforcement Officers’ and Firefighters’ Retirement System Plan 1 (LEOFF 1) and creates the Restated Law Enforcement Officers’ and Firefighters’ Retirement System (Restated LEOFF) on June 30, 2029. Benefits to members are unchanged by the transfer from LEOFF 1 to the Restated LEOFF. Provides for a transfer of assets from LEOFF 1 to the Restated LEOFF to 120 percent of fully funding the benefits of the new plan. Enables the small number of active employees of LEOFF 1 to retire in service prior to the transfer. Provides for immediate vesting of all remaining terminated, nonvested members of LEOFF 1 prior to the transfer. Deposits remaining assets in the Pension Funding Stabilization Account, from which they may be transferred to the State General Fund. It is believed that terminating and reinstating LEOFF Plan 1 would be legal. Also, unlike SSB5085 above, the excess dollars would be put into the GF and legislators could then spend it as they see fit rather than dedicating it for COLA’s. The House held a public hearing on the bill on 3/13/25.

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

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

This second substitute House bill: Extends employment protection rights in the Paid Family and Medical Leave (PFML) Program to any employee who began employment with their current employer at least 180 calendar days before taking leave, regardless of the size of the employer.

• Allows employers to prevent stacking 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. Expands access to grants for small employers to offset the costs of employees’ use of leave in the PFML Program.2E

E2SHB 1213 was passed by the House 55/41/2. Costs to state/employers from fiscal note are still indeterminate. However, the fiscal note does state, “This legislation would have an indeterminate, but potentially significant, impact on local governments.”

SHB 1308: Concerning access to personnel records. An employer subject to the PRA must provide a copy of the personnel file when requested by an employee, former employee, or their designee in accordance with the procedures and requirements set forth in the PRA. Passed the House 56/41/1.

HB 1334: Modifying the annual regular property tax revenue growth limit. This bill changes the 101 percent revenue growth limit for state and local property taxes to 100 percent plus population change and inflation, with a capped limit of 103 percent.

Should counties/cities be allowed to increase their taxes from .02% to .03%, this could affect M & O levy success/asks. This bill had a public hearing on 2/11 before House Financ