— End of Session Report —
March 22, 2018
End of Legislative Session Report – 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