At a meeting of the Select Committee on Pension Policy executive committee, Michael Harbor, actuary for the Office of the State Actuary, told members that ESSB 5357 increased the statutorily set investment-rate-of-return assumption from 7 percent to 7.25 percent and included changes to unfunded actuarial liability (UAL) contribution schedules.

The change to the long‑term investment assumption and other provisions in ESSB 5357 mean updated contribution projections and an actuarial evaluation will follow later this fall, Harbor said. "Specifically I wanted to talk about the statutorily set investment rate of return that was increased as part of that bill from 7% to 7.25%," he said.

Why it matters: lawmakers said the combination of a higher return assumption and a four‑year suspension of UAL contributions will materially affect contribution rates and funded status projections. Senator Conway pressed for clarity on whether a four‑year suspension would raise rates later or allow them to continue declining, and asked for preliminary analysis on the long‑term liability impact. "So by suspending it, what will be the impact here? Will the rates be going up after 4 years? Or will they be basically continuing their path down?" Conway asked.

Harbor described the bill’s mechanics: the suspension sets UAL contribution rates to zero for four years, while past benefit improvements will be amortized over a 15‑year period with the first four years at zero contribution — effectively deferring most amortization until after the suspension. He said the bill is a budgetary savings when measured against current law and the change in the investment assumption is included in that picture. The office plans an economic experience study presentation in September, and an updated actuarial valuation and contribution projections will follow later in the year.

Committee response and direction: members repeatedly asked staff for preliminary figures before September to inform the interim work plan. The committee asked staff to prepare (1) an educational walk‑through of ESSB 5357 using the actuarial fiscal note as a foundation, (2) a separate, kickoff briefing on the LEOFF 1 study (the committee’s assigned study of that plan), and (3) updated impacts on plan‑by‑plan funding status (PERS plans 1, 2 and 3 were mentioned). Melinda Ozlockson, staff, said the committee could get an initial walk‑through in June and then fuller updates in September. "I don't know that we're in a position to accelerate analysis before the September time frame to kind of fill in the information, based on existing work," she said, but agreed staff could present foundational material in June and follow up.

The committee also discussed priorities for the interim work plan, including whether achieving or preserving full funding should be elevated as a principal goal and how to treat apparent overfunding in certain plans. Members requested analyses that separate components of the law (for example, distinguishing plan‑1 specific changes from changes affecting open plans) and to treat the LEOFF 1 study on a separate track from the broader bill impacts.

Formal actions: the executive committee adopted its June agenda by roll call vote and deferred elections of officers to June; staff noted an "excess compensation" operating‑budget proviso and a demographic experience study as items placed in a parking lot for future meetings.

Next steps: staff will schedule a June informational session (election of officers; ESSB 5357 walk‑through; initial LEOFF 1 kickoff) and an actuarial presentation in September. Members requested preliminary, staff‑driven impact estimates on the suite of changes passed this session ahead of the September valuation if feasible.

Ending: Committee members repeatedly emphasized the need for more data and clearer, plan‑by‑plan analysis before making new policy recommendations on COLAs, plan closures, mergers or benefit changes.