This 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. The bill specifies percentage increases to monthly benefits based on retirement dates, with adjustments ranging from one and one-half percent to three percent, and includes caps on maximum increases. Additionally, it establishes a process for annual adjustments based on consumer price index changes starting July 1, 2026.

Furthermore, the bill amends existing laws to clarify the amortization of costs related to benefit improvements, stating that costs incurred after June 30, 2025, will be amortized over a fixed 10-year period, while prior costs will be amortized over 15 years. It also outlines the calculation of employer contribution rates necessary to fund these adjustments and emphasizes that no member or beneficiary has a contractual right to future adjustments not explicitly granted. The legislation introduces a supplemental rate to cover the costs of benefits granted under specific sections, calculated as a level percentage of pay over the same 15-year period, 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