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Senate committee backs bill to prefund a Tier 5 COLA account after extended debate
Summary
SB2613 would create a PERS Tier 5 COLA account and direct $5 million annually from July 1, 2026 through July 1, 2035 (totaling $50 million) into an account managed by PERS; senators debated whether the measure commits future legislatures and whether the funding would produce meaningful COLA payments.
The Senate Finance Committee advanced SB2613 after extended debate. The bill would create a Tier 5 COLA account managed by the Public Employees' Retirement System (PERS) and direct transfers of $5,000,000 from the general fund on each July 1 from 2026 through 2035 into the account (for a $50,000,000 prefunding target).
Senator Sparks, the sponsor, said the measure is intended to prefund a COLA account for future Tier 5 retirees and to demonstrate the Legislature's intent to stabilize the retirement system. "It puts $50,000,000 over 10 years that will be invested and continue to grow," he said, adding the money would be managed by PERS' investment team.
Senator Blunt argued the bill was a symbolic gesture that would not replace a "real COLA" and presented illustrative math to show a limited per-retiree benefit under optimistic investment assumptions; he said he would not vote for it. "This is just a talking point, and that's all it is to it," he said.
Senator Sparks disputed the math and said the bill is consistent with legislative direction and prudent prefunding: he noted Tier 5 has no current retirees and that the prefunding would grow before the account is needed. The committee also discussed whether a general bill can obligate future legislatures; counsel and the Chair explained that the bill transfers specified sums into an account and that the language in section 2 directs the state treasurer to transfer $5,000,000 on each listed date.
During debate the Chair read section 2 aloud: that on July 1, 2026 and every July 1 thereafter through July 1, 2035, the State Treasurer, in conjunction with the State Fiscal Officer, shall transfer $5,000,000 from the general fund to the PERS Tier 5 COLA account created by the act. Committee members asked for actuarial projections and Sparks agreed to request analyses from PERS and actuaries.
The committee found the title sufficient and advanced SB2613 by voice vote; the transcript records "The ayes have it." No numerical roll-call tally was recorded in the transcript. Senators asked the sponsor to provide projections and actuarial detail for committee members to share with constituents.
Next steps: SB2613 moves to the full Senate; the sponsor has requested actuarial projections to clarify the bill's effect over time.
