We wrote last week about several of the pension bills moving through the process that impact cities. Here we update you on the bills’ progress as we head into floor action.

PERS 1 COLA

HB 1721/SB 5676 are companion bills that provide a one-time 3% COLA (cost-of-living adjustment) to PERS plan 1 and TRS plan 1 retirees, capped at $110 per month. AWC opposes these bills only because they fund the COLA through increased employer contribution rates—paid by cities—instead of using state funds.

HB 1721 is waiting to be scheduled for a floor vote in the House.

SB 5676 passed off the Senate Floor on a 47-0 vote on February 2. It now heads to the House for consideration.

LEOFF 2 benefit improvements

HB 1701/SB 5652 are companion bills that provide for new pension benefit enhancements for LEOFF 2 members using the Benefit Improvement Account (BIA). The bills would create two types of benefit improvements funded by the BIA:

• A lump sum benefit of $100/month of service for current retirees; and
• A gradually increasing retirement benefit multiplier from 2% to 2.5% for 15 to 25 years of service for new members.

Current members will have a choice between the two benefits. The bills also establish a new minimum contribution rates policy that reduces employer contributions depending on the plan’s funded status. Benefits improvements are ultimately funded by a one-time transfer from the LEOFF 2 account to the BIA. AWC is neutral on these bills because there is no fiscal impact on cities due to LEOFF 2 being more than fully funded.

Both versions of the bill are waiting to be scheduled for floor votes in their respective chambers.

LEOFF 1 benefit improvements

SB 5791 makes LEOFF plan 1 members eligible for a similar lump sum benefit offered to plan 2 members in the above bills. The bill was amended in committee to remove references to the LEOFF 2 benefit improvement scheme, and only creates a benefit for LEOFF 1 members.

SB 5791 is waiting to be scheduled for a floor vote in the Senate.

ROTH options for deferred compensation plans

HB 1752 requires the Department of Retirement Systems to offer public employees post-tax ROTH investment options in addition to the traditional pre-tax deferred compensation plans. These savings plans are optional and in addition to the employee’s standard pension. A floor amendment was adopted to require DRS to offer ROTH plans starting December 1, 2023.

HB 1752 was passed off the House floor on a 96-0 vote on February 2. It now heads to the Senate for consideration.

Interruptive military service credits

HB 1804/SB 5726 are companion bills that expand the interruptive military service credit to public employees who were awarded an expeditionary medal during a period of armed conflict in addition to those that received a campaign medal. An interruptive military service credit allows public employees to get a subsidized retirement contribution for the period where they take a leave of absence for military service if the employee returns to work after being honorably discharged.

HB 1804 passed off the House floor on a 96-0 vote on February 2. It now heads to the Senate for consideration.

SB 5726 was heard in the Senate Transportation Committee on January 31, but has not yet been scheduled for a committee vote.

Disability benefits

HB 1669/SB 5748 are companion bills that allow a PERS plan member that is totally disabled to receive a retirement allowance of 70% of their final average salary. The employee seeking the disability benefit may be subject to comprehensive medical exams to determine continued eligibility for the benefit.

HB 1669 is waiting to be scheduled for a floor vote in the House.

SB 5748 is waiting to be scheduled for a floor vote in the Senate.