PRESS RELEASE: FOR IMMEDIATE RELEASE, 1-26-2017
“There are many plan 1 members, like myself, who are struggling to cover our expenses,” stated Nancy Heley, a public sector retiree from Olympia, “but many are too ashamed and embarrassed to tell their stories.” Nancy was speaking in front of the Washington State House Committee on Appropriations on Thursday on behalf of more than 85,000 public sector retirees in Washington state. She is a member of Retired Public Employees Council (RPEC) that is strongly supporting House Bill 1484 to provide a one-time $2 per years of service credit to public sector retirees in Plan 1. “We are not trying to be greedy,” continued Nancy, “we are only asking the legislature for a bit of relief.”
Out of the 18 public pension plans in Washington State, only two have no COLA protection for retirees to protect their standard of living from being continually eroded by inflation – PERS 1 and TRS 1. For the first 25 years of existence, PERS 1 retirees received a total of 13 ad hoc increases – most of which were for 3%. The Uniform COLA passed in 1995 protected those retirees for the next 15 years. But since 2010 – nothing, when the State Legislature eliminated the Plan 1 COLA. If the legislature fails to act in 2017, it will mark the longest period without a COLA for those retirees in the last 50 years.
The State Actuary found that if someone had retired in 1980, they have lost over 30% of their purchasing power. Just since the last COLA was given in 2010, the Seattle Consumer Price Index reports inflation of 11.6%.
This seriously undercuts the retirement stability of plan 1 retirees, whose pensions are modest, averaging only $23,600 annually. In fact, 53% of plan 1 members make under $24,000 per year and 84% make under $36,000 per year. These pensions also are an economic driver producing $1.47 of economic output into the state economy for every dollar contributed by the state according to the National Institute on Retirement Security.
This leaves many very worried about covering their expenses. We have an aging population that are one medical bill away from falling into poverty.
Florence Reep, who retired after 25 years of service from the Employment Security Department in Mount Vernon, has an annual pension of $14,800 and finished her testimony to the committee by saying “Please help us. We have given many years of service and just ask to receive enough to live with dignity instead of asking for public aid.”
House Bill 1484 has a companion bill SB 5556 that was introduced today.