SENATE BILL REPORT

SB 5380

BYSenators Gaspard, Saling, Warnke, von Reichbauer, Vognild, Johnson, Bottiger, Conner, Bauer, Stratton, Nelson, Newhouse and Rasmussen

Providing cost-of-living adjustment of retirement benefits.

Senate Committee on Ways & Means

Majority Report:  Do pass.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bauer, Bluechel, Craswell, Deccio, Fleming, Hayner, Kreidler, Lee, Moore, Owen, Rasmussen, Rinehart, Saling, Talmadge, Vognild, Warnke, Williams, Wojahn.

Senate Hearing Date(s):February 24, 1987; March 9, 1987

Senate Staff:Charles Langen (786-7715)

                  April 15, 1987

AS PASSED SENATE, MARCH 13, 1987

BACKGROUND:

The Public Employees' Retirement System (PERS) and Teachers' Retirement System (TRS) do not have an operative post-retirement adjustment provision.  Both systems, however, have a retirement allowance floor to assure the retiree of a minimum level for subsistence.  This minimum benefit was revised in 1986 when it was increased to $13 per month per year of service.

SUMMARY:

The minimum benefit of PERS and TRS is increased from $13 to $15 per month per year of service.

Appropriation:    $17.1 million from the general fund-state

Fiscal Note:      available

Effective Date:July 1, 1987

Senate Committee - Testified: No one

HOUSE AMENDMENTS:

The minimum benefit of PERS and TRS is increased from $13 to $13.50 per month per year of service.

Hereafter, using the Plan II COLA formula, the minimum will be automatically increased annually with the maximum increase lidded at 3.0 percent.

There is an appropriation of $6.9 million from the general fund to cover the 1987-89 payout cost and the 1987-89 actuarial cost attributed to this benefit increase.