The bill aims to implement ongoing cost-of-living adjustments (COLAs) for retirees under Plan 1 of the Teachers' Retirement System and the Public Employees' Retirement System in Washington State. It introduces a new funding policy that consolidates the costs of previous COLAs with new ongoing adjustments, allowing these costs to be amortized over a 15-year period. Beneficiaries will receive annual increases based on their retirement date, with adjustments ranging from 1.5% to 3% of their monthly benefits, subject to maximum caps. New sections are added to both retirement system chapters to establish a systematic approach for determining annual adjustments based on consumer price index changes starting July 1, 2026.

The bill also amends existing laws to clarify the amortization of costs associated with benefit improvements effective after June 30, 2025, specifying that these costs will be amortized over a fixed 15-year period, while other improvements will continue to follow the existing 10-year policy. It reserves the right for future amendments or repeals, ensuring no member or beneficiary has a contractual right to post-retirement adjustments not granted prior to such changes. Additionally, the bill mandates that employer contribution rates for higher education institutions must adequately fund projected costs for supplemental retirement benefits starting in 2035, and a new supplemental rate will be charged to cover the costs of benefits granted under specific sections of the act, calculated as a level percentage of pay over a fixed 15-year period. The act is deemed necessary for the immediate preservation of public peace, health, or safety, and is set to take effect on July 1, 2025.

Statutes affected:
Original Bill: 41.32.4992, 41.32.489, 41.45.060, 41.45.030