Legislative Updates are published as conditions warrant. All new updates will be available on this webpage and are emailed to WSSRA members who request legislative information.
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END OF SESSION UPDATE 2018
March 22, 2018
The 2018 Legislative Session was the best legislative session school retirees have had since 2010. All school retirees will see an increase in their pensions this July. Additionally, all Medicare Eligible Retirees will receive increased assistance on their PEBB supplemental insurance. The Medicare Eligible Healthcare benefit is being increased from $150 per month to $168 per month.
It was a busy three months. When the session started the outlook was grim. A neutral state budget outlook and potentially huge financial pitfalls loomed. We were concerned that important retiree benefit restorations would again go unfunded. In December of 2017, the Select Committee on Pension Policy endorsed a Plan 1 COLA at a 3% level. Governor Inslee funded that 3% benefit increase, but he made his budget contingent on the passage of his carbon tax proposal. At that point, the state was basically missing a billion bucks.
Fortunately, the worst-case budget scenario never came to fruition and state tax revenue came in $1 billion higher than expected.
Changes for Plan 1 Retirees
- Upon a unanimous final vote, legislators passed a 1.5% increase for TRS 1 and PERS 1 retirees. The increase stops accumulating at $50,000 in annual pension income. Meaning that any retiree earning a pension of over $50,000 will receive a maximum increase of $750 per year. This benefit will take effect July 1st.
- Plan 1 minimum benefit levels will increase by 3% on July 1st. The Basic Minimum Benefit that all Plan 1 retirees are entitled to will go from $57.50 per month, per year of service credit to $59.89 per year of service credit. The Alternative Minimum Benefit for retirees who have been retired at least 20 years (with twenty-five years of service) will increase to $1,902 per month.
Changes for Plan 2 & 3 Retirees
- Retirees in Plans 2 & 3 will receive an inflation-based COLA on July 1st.
- Legislation to allow coaches and classified retirees the ability to work in retirement before age 65 died. HB 1827 was a large education policy bill that incorporated the post retirement provisions as part of the package. That bill passed the House but died in the Senate. Senate Bill 5310 exclusively dealt with post-retirement school employment. That bill passed the Senate but died in the House. We will sponsor this legislation again next session.
- HB 1560 would have made the defined benefit pension in Plan 2 the default pension option for new school employees who do not pick a retirement plan. The bill passed the House but died in the Senate. The Senate Ways and Means Committee chair requested it be sent back to the Select Committee on Pension Policy for additional work in the 2018 legislative interim.
Improvements for All TRS & PERS Retirees
- The increase in the Medicare Eligible Healthcare Benefit to $168 will help all school retirees over the age of 65 who participate in PEBB Medical Insurance. This benefit increase takes effect January 1st, 2019 and will help cushion against any rate increases in PEBB next year.
- The Legislature made the full actuarially recommended pension payment to the pension funds. This is important for getting the unfunded liability in TRS 1 and PERS 1 paid off. Skipped payments in the 1990’s and 2000’s caused much of the shortfall in the first place.
Intangibles & Next Steps
School retirees made progress this year in ways that are hard to quantify. It is clear that your messaging is getting through to legislators. All 147 of them talked about the barrage of retirees who have been contacting them about pension and healthcare benefits. Also, we had big advocacy efforts from legislators in both political parties. You deserve bipartisan support on your issues, and this year you got it.
After dissecting the budget and all the bills that were passed late last night, we will begin preparing for the 2019 Legislative Session. Important interim lobbying will take place at the Select Committee on Pension Policy, the Governor Inslee’s Office, and on the campaign trail. All of which is to lay the groundwork for the 2019 Session to make sure your concerns are represented in the 2019-2021 operating budget.
What the Legislature provided retirees this year is an improvement, but not what retirees requested or what you deserved to receive. We’ll keep up the fight until retirees get the medical and pension benefits they need to live a comfortable, dignified retirement.
Peter Diedrick, Legislative Director
Washington State School Retirees’ Association
2017 END OF SESSION UPDATE
April 14, 2017
The 2017 Washington State Legislative Session is now in its final stage. Bill cutoffs have passed, and any legislation that has not passed or is not tied to the budget is considered dormant for the remainder of the year. The rest of the legislative session will be devoted to budget and McCleary negotiations. The 2017 Regular Legislative Session is scheduled to adjourn Sunday, April 23rd.
LEGISLATIVE BUDGET PROPOSALS
Senate Republicans and House Democrats have released their respective 2017-2019 operating budget proposals. The budgets are wildly different from each other. However, both account for a budget deficit of approximately $1 billion, and funding to resolve the McCleary ruling. The Senate budget appropriates $43 billion and pays for McCleary through a statewide property tax and reductions in social service spending. The House budget spends $45 billion and covers extra expenses through tax loophole closures and the creation of a capital gains tax on nonretirement, large volume stock and investment gains. The tax rate would largely mirror Idaho’s capital gains rate.
The House and Senate budget proposals both offer gains to school retirees. Within current budget constraints, cuts could easily have been on the table. Fortunately, retirees are in the position to be advocating for benefit enhancements.
The House budget restores health benefits that were reduced in 2011. At that time, legislators cut the Medicare Eligible Healthcare Benefit from $183 per month to $150 per month. The House budget increases the benefit to $166 per month in CY 2018, and returns it to the full $183 per month in CY 2019.
The Senate budget proposal increases minimum benefits for TRS 1 retirees. TRS 1 retirees who have 25 years of service and have been retired for 20 years or those who have at least 20 years of service and been retired 25 years will get an additional $27 per month in their pension checks. We are working to get this potential enhancement expanded to a larger population of retirees.
STATUS OF WSSRA’S GOALS & LEGISLATION
- Medical Benefits. Medicare retirees who purchase Medicare supplemental insurance from the Public Employees Benefits Board (PEBB) receive a discount on their medical insurance of up to $150 per month. This discount was lowered from $183 per month in 2011. The House budget proposal restores this benefit. The Senate budget proposal retains it at the $150 level.
- Plan 1 COLA. WSSRA’s request legislation, SB 5556 & HB 1484, have stalled due to their cost. Those bills would have provided an increase of $2 per month per year of service credit for all TRS 1 & PERS 1 retirees. The State Actuary priced that benefit enhancement at $38 million per two-year budget. These bills are not dead, but sitting dormant unless they are funded in the state budget. A less costly proposal, SB 5833, was sponsored by Senator Honeyford (R-Yakima). This bill would provide an additional $27 monthly increase to TRS retirees who receive the Plan 1 Alternative Minimum Benefit. SB 5833 was priced at $4 million per two-year budget. It passed the Senate unanimously and has been accounted for the Senate budget proposal.
- Protecting Pensions. At this point, there are no proposed bills to reduce benefits or close pension funds.
- Making Pension Payments. State budget writers are on track to make the actuarially recommended pension payments to the state’s pensions funds. This will keep pensions well-funded, and keep costs from getting driven up in the future.
- Plan 2 Default. The House passed HB1560 to make TRS/PERS 2 the default plans for new school and state employees who do not choose a retirement plan. This would offer a more stable retirement for retirees, and offer a small savings the state budget. HB 1560 has not been taken up by the Senate.
The legislative session is scheduled to adjourn on April 23rd, but that date appears to be a rosy projection. Independence Day would likely be a more accurate guess. Staff at the capitol have been instructed not to plan summer vacations, so that does not bode well for a timely adjournment.
Please feel free to contact your legislators at any time and ask for their support. The legislative hotline number is (800) 562-6000. All legislator contact information is available at www.leg.wa.gov or on our webpage www.wssra.org.