Bill > SB5085

This bill addresses the merger of three closed retirement plans in Washington state. Here's a summary: This bill creates a new "legacy retirement system" by merging the law enforcement officers' and firefighters' retirement system plan 1, the teachers' retirement system plan 1, and the public employees' retirement system plan 1. The legislature found that these plans have different funding structures, with the law enforcement officers' and firefighters' plan being overfunded (149%), while the teachers' and public employees' plans are underfunded (86% and 80% respectively). The merger aims to improve the funded status of the underfunded plans using excess funds from the overfunded law enforcement plan. The bill establishes that the new legacy retirement system will have three separate tiers maintaining the original benefits of each merged plan. Specifically, the law enforcement officers' and firefighters' retirement system plan 1 members will continue to receive the same benefits they would have received before the merger. The teachers' and public employees' retirement system plan 1 members will also maintain their existing benefits, with additional cost-of-living adjustments being added. The bill provides for the transfer of all assets, liabilities, and memberships of the three plans into the new legacy retirement system. It also includes provisions to ensure that the merger complies with federal internal revenue code requirements and does not negatively impact existing benefits. Additionally, the bill introduces new cost-of-living adjustment mechanisms for the teachers' and public employees' retirement system plan 1 members, providing annual increases based on the consumer price index. The merger is intended to create a more stable and sustainable retirement system, with the excess funds from the law enforcement officers' and firefighters' plan helping to shore up the financial positions of the other two plans. The bill takes effect at different stages, with most provisions becoming operative on September 1, 2027, and some specific sections taking effect earlier or later.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=5085&Year=2025&Initiative=false