HB 1390, which provides a cost of living adjustment (COLA) for Plan 1 retirees of the Public Employees’ Retirement System (PERS), was voted out of the House Appropriations Committee last week. The bill includes a one-time permanent 3 percent COLA, capped at a maximum increase of $62.50 per month for all retirees not receiving a minimum benefit.
A one-time, permanent 3 percent COLA for PERS 1 retirees will cost local governments:
- $13.3 million in the 2019-21 biennium;
- $15.3 million in the 2021-23 biennium; and
- More than $80 million over ten years.
This increase would be in addition to the 1.5 percent COLA increase granted to PERS 1 retirees in 2018, which amounts to an additional cost of $12 million in the 2019-21 biennium, and more than $65 million over the ten-year period. This would be on top of the $175 million local governments already pay in PERS 1 unfunded liability costs per year.
AWC opposes the bill’s across-the-board benefit increase approach and has instead encouraged a more targeted method to assist the Plan 1 retirees that are most in need of financial assistance.