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Select committee bill would restore recurring COLA for Plan 1 retirees, amortize cost over 15 years
Summary
Senate Bill 5113, requested by the Select Committee on Pension Policy, would restore an annual COLA for PERS 1 and TRS 1 retirees (up to 3% tied to Seattle CPI) and require that the cost of benefit improvements be amortized over 15 years; supporters said it corrects an inequity, while employers and fiscal critics warned of added costs.
Senate Bill 5113, brought to the Senate Ways & Means Committee by the Select Committee on Pension Policy, would reinstate an ongoing cost‑of‑living adjustment for Plan 1 retirees and change amortization rules for benefit enhancements.
Amanda Cecil, staff to the committee, described the bill’s three main components: (1) create a recurring COLA for PERS 1 and TRS 1 retirees similar to the COLA available to Plan 2 and Plan 3 retirees (up to 3% based on inflation); (2) amortize the cost of that COLA and future benefit improvements over 15 years (current law generally uses 10 years); and (3) re‑amortize the cost of prior benefit improvements over 15 years, which produces short‑term budget relief by stretching costs over a longer period.
Cecil summarized fiscal estimates: a Department of Retirement Systems administrative cost of $725,000 and an actuarial fiscal note showing near‑general‑fund costs of $74.4 million in 2025‑27 and $186.2 million over the 4‑year outlook; on a 15‑year horizon the near‑general‑fund cost was estimated at about $2.2 billion and $4.0 billion across all employers.
Supporters called the measure an equity correction for closed Plan 1 retirees who have lacked an ongoing COLA since 2011. Pete Diederich of the Washington State School Retirees Association testified, “We’re here in support of a Plan 1 COLA for TRS 1 and PERS 1 retirees,” while Jared Mason of the Washington Education Association testified he was “a very strong pro on Senate Bill 5113.” Several retired‑employee organizations, including the Retired Public Employees Council, urged passage and said ad hoc COLAs have eroded retirees’ purchasing power.
Opposition came from fiscal conservatives and some retirement groups who cautioned that reamortization and adding COLAs could increase long‑term liabilities. Michael McKinley argued that extending amortization from 10 to 15 years risks making the system’s financial status look artificially improved and could produce later costs. Emmett Mills of the Washington State School Retirees Association testified against SB 5357 (the reamortization bill) unless an ongoing COLA is restored, arguing reamortization should not be used solely to save employers without delivering COLAs to Plan 1 retirees.
Ending: The committee took public testimony for and against the bill; no committee vote occurred in this hearing.
