The bill proposes the merger of three closed retirement plans in Washington State: the law enforcement officers' and firefighters' retirement system plan 1, the teachers' retirement system plan 1, and the public employees' retirement system plan 1, into a new "legacy retirement system." This merger aims to address funding disparities, as the law enforcement officers' and firefighters' plan is overfunded at 149%, while the other two plans are underfunded at 86% and 80%. The legislation ensures that all members will receive benefits at least equal to their original plans and introduces ongoing cost-of-living adjustments. It also includes provisions for the transfer of assets, liabilities, and membership into the new system, while closing the individual funds of the three plans.

Additionally, the bill amends various sections of existing laws to streamline the funding process for retirement systems, establish new retirement funds, and clarify definitions related to retirement benefits. It introduces a new "legacy retirement system account" to finance benefits for the merged plans and mandates annual adjustments to retirement allowances based on consumer price indices starting July 1, 2026. The bill also removes previous requirements for fully amortizing certain retirement plans by specific dates and focuses on long-term funding goals. Notably, it deletes references to the public employees' retirement system plan 1 and the teachers' retirement system plan 1 while inserting provisions for the legacy retirement system account, reflecting a shift towards the new merged system.

Statutes affected:
Original Bill: 41.50.030, 41.50.075, 41.50.110, 41.32.4992, 41.32.489, 41.40.1984, 41.45.020, 41.45.035, 41.45.050, 41.45.060, 41.45.070, 41.45.150, 41.45.200, 41.45.203, 41.45.207, 41.40.330, 11.96A.220, 41.04.445, 41.04.450, 41.04.803, 41.05.320, 41.24.400, 41.50.080, 41.50.235, 41.50.255, 41.50.500, 41.54.010, 41.54.040
Substitute Bill: 41.50.030, 41.50.075, 41.50.110, 41.32.4992, 41.32.489, 41.40.1984, 41.45.020, 41.45.035, 41.45.050, 41.45.060, 41.45.070, 41.45.150, 41.45.200, 41.45.203, 41.45.207, 41.40.330, 11.96A.220, 41.04.445, 41.04.450, 41.04.803, 41.05.320, 41.24.400, 41.50.080, 41.50.235, 41.50.255, 41.50.500, 41.54.010, 41.54.040