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SCPP Endorses PERS/TRS 1 COLA for 2024, Other Pension Enhancement

SCPP Endorses PERS/TRS 1 COLA for 2024, Other Pension Enhancement

On Tuesday, November 14, the Select Committee on Pension Policy (SCPP) endorsed two proposals to enhance pensions for retired public employees.  Both proposals will be introduced as bills during the 2024 Legislative Session, which begins in January.

PERS/TRS 1 COLA

The SCPP endorsed a proposal to provide PERS 1 and TRS 1 retirees with a one-time 3% cost of living adjustment (COLA) not to exceed $125 per month.  If enacted by the Legislature, the COLA will occur in July 2024.  When the legislature repealed the Uniform COLA in 2011, PERS/TRS 1 became the only state-managed pension plans to not receive annual automatic COLAs.  Since then, RPEC has played a major role in passing one-time COLAs in 2018, 2020, 2022, and 2023.  The $125 per month maximum benefit that the SCPP selected for 2024 is double the maximum benefit attached to the COLAs passed in 2018 and 2020.  If passed by the Legislature, the 2024 COLA will be the largest COLA received by PERS/TRS 1 retirees since 2010.  It will provide short term relief as the SCPP prepares to recommend an automatic ongoing COLA proposal to the Legislature in the 2024 interim.

RPEC President Clair Olivers testified in support of a one-time COLA in 2024 and encouraged the Legislature to remain focused on restoring an ongoing COLA in 2025.  After hearing public comment, RPEC member Bev Hermanson, one of the two retiree representatives on the SCPP, moved to have the committee endorse the proposal.  Both SCPP Chair State Representative Joe Fitzgibbon (D, Seattle) and Senator Steve Conway (D, Tacoma) spoke in favor of the motion, which was unanimously adopted by the committee.

The one-time COLA’s unanimous approval can be attributed to RPEC’s advocacy.  For years, members have engaged with their legislators, educating them, and winning their support.  Members have generously donated their time and resources to help elect pro-retiree candidates to the State Legislature and establish RPEC as a substantial force in state politics.  This summer, members succeeded in a pressure campaign to enlist the support of local elected officials that resulted in the Pierce County Council, the Grays Harbor County Board of Commissioners, and the Mayor of Wenatchee all formally requesting that the SCPP restore an ongoing COLA.  RPEC also orchestrated a letter signed by five powerful public employee unions calling for the restoration of an ongoing COLA.  And members showed up in force last week, with over 1,550 people registering their support on the Legislature’s website.  Others shared their personal stories by submitting written testimony to the SCPP.  RPEC will keep the pressure on throughout the 2024 Legislative Session and until all retired public employees in Washington State receive annual COLAs.

End Month-of-Death Pension Prorating and Clawbacks

The SCPP endorsed a proposal to end the practice of prorating final pension payments to deceased retirees.  The Department of Retirement Systems (DRS) makes pension payments on the last business day of the month.  When DRS learns that a retiree has died, they prorate the payment based on the amount of the month that the retiree was alive.  For example, if a retiree died on the seventh day of a thirty-day month, their final pension payment would only be 7/30ths of the usual amount.

DRS is not always notified immediately when a retiree dies.  If DRS learns after the fact that a full pension payment was made on the month that a retiree died, they will “claw back” a portion of the final pension to adjust it to the prorated amount.  These clawbacks cause unnecessary headaches for surviving family members tasked with settling their loved one’s affairs and are burdensome for DRS to facilitate.

The practice of prorating pension payments can have catastrophic consequences for surviving family members of deceased retirees who get their health insurance through the Public Employees Benefits Board (PEBB).  Many retirees pay their monthly PEBB premiums by having money automatically deducted from their pensions.  If a PEBB member dies early in a month, their prorated pension may not be enough to cover their insurance premium, causing their insurance to lapse in their final month of life.  End of life medical care is typically extremely expensive, and without health insurance, surviving family members are stuck with the bill.

The SCPP unanimously endorsed a proposal that would end the practice of prorating month-of-death pension payments, meaning that retirees would receive full pension payments for their final month of life.  RPEC President Clair Olivers submitted written testimony supporting this priority.

Next Steps

Having been endorsed by the SCPP, both proposals will be introduced as bills in the 2024 Legislative Session.  Please consider attending RPEC’s Legislative Day on January 22nd to meet with your legislators about these bills and other priorities we will be supporting.  Click here to register for the event.

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