Thursday, February 29, 2024

Senate Passes Plan 1 COLA

Senate Passes Plan 1 COLA

On the afternoon of Monday, February 27, the Washington State Senate unanimously passed two bills that grant a one-time cost of living adjustment (COLA) to Plan 1 retirees and lay the groundwork for a recurring COLA.

Senate Bill 5350 provides PERS 1 and TRS 1 retirees with a 3% COLA in July 2023 not to exceed $110 per month.  The bill also directs the Select Committee on Pension Policy (SCPP) to study and recommend to the legislature a recurring COLA proposal for Plan 1 retirees.

Senator Steve Conway (D, Tacoma), the bill’s primary sponsor, and Senator Lynda Wilson (R, Vancouver), a ranking Republican on the Senate Ways & Means Committee, both spoke in support of the bill.

RPEC played a key role in formulating SB 5350, which was developed by the SCPP in 2022.  Countless RPEC members participated in SCPP meetings by testifying, writing emails and letters, and signing in online to voice their support for a recurring COLA.  At RPEC’s request, the language to include a path to a recurring COLA was added to the one-time COLA proposal.

On Monday, the Senate also passed Engrossed Substitute Senate Bill (ESSB) 5294, which impacts the paydown of the Plan 1 unfunded liabilities.  Originally, the bill would have abruptly stopped the unfunded liability paydowns when the plans were anticipated to become fully funded.  At RPEC’s recommendation, the bill was amended in the Senate Ways & Means Committee to gradually reduce funding over a longer period of time.

Speaking in support of the bill, Senate Ways & Means Committee Chair Christine Rolfes (D, Kitsap County), said the bill “put the state on sounder financial footing moving forward and increase the state’s flexibility and our ability to respond to future costs, potentially including additional one-time or permanent COLAs for PERS and TRS Plan 1 retirees.”

Senators Wilson & Conway joined Senator Rolfes in voicing their support for the bill.  Before final passage, the Senate adopted a minor technical amendment.  Both bills will now go to the Washington State House of Representatives.

On Thursday, February 23, the House Appropriations Committee passed SHB 1057 and HB 1201, the respective companion bills to SB 5350 and ESHB 5294.  These bills now wait to be pulled from the House Rules Committee and placed on second reading to be brought to the House floor for a vote.  As amendments have caused the Senate and House versions of the bills to differ, the two legislative bodies will need to negotiate which versions of the bills will move forward.

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