| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Appropriations Committee | |
SB 5175
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
Brief Description: Providing annual increases in certain retirement allowances.
Sponsors: Senators Pridemore, Schoesler, Fraser, Fairley, McAuliffe, Shin, Jacobsen, Prentice, Franklin and Rasmussen; by request of Select Committee on Pension Policy.
Brief Summary of Bill |
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Hearing Date: 3/28/07
Staff: David Pringle (786-7310).
Background:
A new cost of living adjustment (COLA) was created in 1995 for members of the Teachers
Retirement System, Plan 1 (TRS 1), and the Public Employees Retirement System, Plan I (PERS
1). The annual increase, or Uniform COLA, provides an annual, automatic increase each July 1.
The increase is a uniform amount for each year of service and is payable to retirees who are age
66 or older and have been retired at least one year. The annual increase is also provided to the
TRS 1 and PERS 1 minimum benefit.
The Uniform COLA increases by 3 percent each year, plus in the January of even-numbered
years if there are extraordinary investment returns to provide for a gain sharing COLA increase.
In 1995 it was $.59 per month, per year of service; since then it has increased to $1.14 per month,
per year of service, and will increase to $1.33 per month, per year of service on July 1, 2007. For
example, an eligible retiree with 30 years of service will receive an increase of approximately
$40 in his or her monthly retirement allowance on July 1, 2007.
Since the eligibility for the Uniform COLA is based on the retiree's age on July 1, a person who
was born on July 2 through the end of a calendar year would not be eligible to receive the COLA
in the calendar year that he or she reached age 66, but instead must wait until the following July
to receive the first COLA adjustment.
Summary of Bill:
A PERS 1 or TRS 1 retiree who has been receiving an allowance for at least one year by July 1
receives a Uniform COLA increase beginning July 1 of the calendar year that the retiree turns age
66. This change is effective as of July 1, 2007.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill contains an emergency clause and takes effect on July 1, 2007.