SENATE BILL REPORT

SB 5261

BYSenators Saling, Rasmussen, Bailey, Gaspard, Rinehart, Wojahn, Conner, Nelson, von Reichbauer, Benitz, Kreidler, Moore, Bauer, Murray, Talmadge, Stratton, Anderson and Vognild

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 30, 1989

BACKGROUND:

Other than for those retired teachers receiving the minimum retirement allowance, no cost-of-living adjustment is available for members of the Teachers' Retirement System (TRS) who were first employed prior to October 1, 1977.

SUMMARY:

Beginning July 1, 1989 and annually thereafter, the Department of Retirement Systems (DRS) shall determine the following information for the retirement allowance received by each TRS retired member who was first employed prior to October 1, 1977 and who has been retired at least five years:  (a) the dollar amount of the minimum retirement allowance received as of July 1, 1989; (b) the Consumer Price Index-Seattle, for urban wage earners and clerical workers, all items (CPI-SEA) for the 1987 calendar year (Index A); (c) the CPI-SEA for the calendar year prior to the date of determination of the COLA (Index B); and (d) the ratio obtained when Index B is divided by Index A.  If the ratio is greater than 1.67, the ratio shall be the annual adjustment to the retirement allowance and shall be applied beginning with the July payment.  In no event, however, shall the annual adjustment (a) produce a retirement allowance which is lower than the minimum retirement allowance as of July 1, 1989, or that amount upon retirement after July 1, 1989; (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 27, 1989

Effective Date:The bill contains an emergency clause and takes effect immediately.