SENATE BILL REPORT

SB 6333

BYSenators Saling, Rasmussen, Wojahn, Patterson, Halsan, Warnke, Garrett, Kreidler, Talmadge, Moore, Stratton, Owen, McMullen, Bailey, Johnson, Kiskaddon, West, Conner, Fleming, Vognild, Smith, von Reichbauer, Gaspard and Bauer

Establishing a cost-of-living adjustment for plan I members of the teachers' retirement system.

Senate Committee on Ways & Means

Senate Hearing Date(s):

Senate Staff:Charles Langen (786-7715)

AS OF JANUARY 20, 1988

BACKGROUND:

Members of the Teachers' Retirement System (TRS), first employed prior to July 1, 1977 (i.e., Plan I), do not have an operative postretirement adjustment provision.  There is a minimum retirement allowance of $13.50 (as of July 1, 1987) which is adjusted annually by Consumer Price Index formula which cannot exceed 3.0 percent initially or more the 3.0 percent of the previous years adjustment thereafter.

SUMMARY:

Beginning July 1, 1989, and every year thereafter, the Department of Retirement Systems (DRS) shall provide an annual cost-of-living adjustment to qualified TRS members' retirement allowance.  To be qualified, the member must be covered under TRS I and have been retired for at least five years.  The adjustment itself shall be the value obtained when the Consumer Price Index (CPI) Seattle, Urban Wage Earners and Clerical Workers, All Items for the calendar year prior to the date of DRS' determination is divided by the same CPI for 1987.  The adjustment, however, is to be limited in that it cannot:  (a) produce a benefit lower than either the original retirement allowance or the minimum retirement allowance as of July 1, 1988; (b) exceed 3.0 percent in the initial annual adjustment; or (c) differ from the previous year's annual adjustment by more than 3.0 percent.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 20, 1988