Bill to merge legacy Plan 1 systems would create ongoing COLA, merge surpluses and pause employer UAAL charges through 2027

Senate Bill 5085, introduced to the Senate Ways & Means Committee as a consolidation and benefit bill, would merge assets, liabilities and membership of three closed Plan 1 retirement systems (PERS 1, TRS 1 and LEOFF 1) into a new legacy retirement system and create an ongoing annual cost‑of‑living adjustment (COLA) for Plan 1 annuitants.

Amanda Cecil, committee staff, briefed members that the bill would (1) merge the three Plan 1 systems into one legacy retirement system, (2) provide a recurring COLA for PERS 1 and TRS 1 retirees beginning July 1, fiscal year 2025 (an initial 3% and thereafter up to 3% based on Seattle CPI, with excess carried forward), and (3) eliminate employer unfunded actuarial accrued liability (UAAL) rates and supplemental benefit‑enhancement rates through fiscal year 2027. The merger would be contingent on Department of Retirement Systems (DRS) requests for IRS determination and private letter…