SENATE BILL REPORT
SB 6290
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. |
As of January 23, 2018
Title: An act relating to cost-of-living adjustments for teachers' retirement system plan 1 and public employees' retirement system plan 1 retirees.
Brief Description: Addressing cost-of-living adjustments for teachers' retirement system plan 1 and public employees' retirement system plan 1 retirees.
Sponsors: Senators Hunt, Chase, Van De Wege, Ranker, Kuderer, Hasegawa, Keiser, Palumbo and Saldaña.
Brief History:
Committee Activity: Ways & Means: 1/23/18.
Brief Summary of Bill |
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SENATE COMMITTEE ON WAYS & MEANS |
Staff: Amanda Cecil (786-7460)
Background: The basic retirement allowance of a member of Plan 1 of the Public Employees' Retirement System (PERS Plan 1) or the Teachers' Retirement System (TRS Plan 1) is equal to 2 percent of the member's average final compensation, calculated on the members' highest consecutive two years of compensation, for each year of service. Retirement benefits in the Plan 1s are available to members after 30 years of service at any age, with 25 years of service at age 55, and with 5 years of service at age 60. The original Plan 1 design did not contain a benefit feature annually adjusting retirees benefits, though several ad-hoc retiree benefit adjustments were created by the Legislature prior to 1995.
Between 1995 and 2011, PERS Plan 1 and TRS Plan 1 retirees' benefits could be eligible for an annual increase from a benefit generally referred to as the Uniform Cost of Living Adjustment (COLA), or Uniform COLA. The Uniform COLA was enacted in 1995 to replace a number of prior COLAs, and was a fixed dollar amount multiplied by the member's total years of service. The dollar amount of the Uniform COLA was about $1.88 per year, meaning that a member with 25 years of service would receive an additional $47 per month each year, and the Uniform COLA itself would have increased by 3 percent per year on July 1. Members did not have a contractual right to future increases to the Uniform COLA, and those increases ceased with the repeal of the Uniform COLA in 2011.
Summary of Bill: A one-time increase is provided to Plan 1s members' monthly benefits of 3 percent on July 1, 2018. The 3 percent increase given to members is reduced proportional to optional reductions chosen at the time of retirement.
Appropriation: None.
Fiscal Note: Available.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.