Bill > SB5113

This bill provides ongoing cost-of-living adjustments (COLAs) for Plan 1 retirees in the Teachers' Retirement System (TRS) and Public Employees' Retirement System (PERS), establishing a new funding approach to manage benefit costs. Specifically, the bill provides a three percent annual increase for retirees starting July 1, 2025, and creates a new annual adjustment mechanism beginning July 1, 2026, which will calculate cost-of-living increases based on the Seattle area Consumer Price Index, with caps to ensure the adjustment does not exceed three percent or reduce the original retirement allowance. The bill introduces a unique financing strategy where the costs of previous and new benefit improvements will be amortized over a 15-year period, unlike previous practices of using a 10-year period, with the goal of supporting employer contribution rate stability. The legislature explicitly reserves the right to modify these provisions in the future and emphasizes that retirees do not have a contractual right to future adjustments not currently granted. The bill is designed to provide ongoing financial support for long-term Plan 1 retirees while maintaining a fiscally responsible approach to managing retirement system costs.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=5113&Year=2025&Initiative=false