OLYMPIA — Retired teachers and other public employees who established state pensions before 1977 might receive a one-time, 3% increase in retirement benefits this year — up to $110 dollars per month, under a bipartisan bill this legislative session.
The Public Employees’ Retirement System (PERS) and the Teachers’ Retirement System (TRS) on Plan 1 includes teachers and public employees who started in Washington prior to 1977. Senate Bill 5862 is sponsored by Sen. Perry Dozier, R-Waitsburg, and passed unanimously in the Senate Ways & Means committee Feb. 9. It now waits for the Rules committee to pull the bill to the Senate floor. If passed, it would go through the same committee and floor process in the House.
PERS/TRS Plan 1 is the only state pension plan without an automatic cost-of-living-adjustment (COLA) that makes the incoming money keep up with inflation. Plan 1 previously had an automatic COLA, but it was repealed by the legislature in 2011 and has not been restored since, though a proposed bill last session attempted to do so.
There have been five one-time COLAs passed since, all in the last 8 years, ranging from a 1.5% increase to 3%. This year, advocates are asking for a one-time, 3% increase.
Sen. June Robinson, D-Everett and sponsor of last session’s automatic COLA bill, said she and other legislators are figuring out how this bill fits into the larger budget picture. There is a multibillion dollar budget shortfall the legislature must close by the end of session March 12.
“There’s a lot of people who would like to provide a COLA,” Robinson, who is also chair of the Ways & Means committee, said, “and we’re trying to work through the finances of how to be able to do that,”
In the current draft, the state would pay the $220 million from its general fund over the next 15 years.
There are 65,134 PERS/TRS Plan 1 retirees in the state, and on average, they are 79.8 years old.
“Every year without a COLA pushes us closer to the poverty line because we cannot keep pace with increasing medical costs, taxes, and utility bills,” said Lee Ann Prielipp on behalf of Washington Education Association-Retired, in support of SB 5862 on Feb. 5.
For most of these retirees, returning to work is not feasible, Prielipp said. Others who testified in support named friends in their 80s and 90s, however, who took up jobs to make ends meet.
No one signed in to testify against the bill.
Phyllis Farrell is a director-at-large for the Washington State Senior Citizen’s Lobby. Farrell said she remembered when the state was in a jam for money and did not provide raises when she was a teacher in the 1980s.
“That’s the compromise I remember: ‘We can’t give you a raise, but we’ll support you with benefits and good pensions,’” she said. “So I feel like that contract to be able to retire with some measure of dignity has been broken.”
It’s an equity and fairness issue, Farrell said. Most of these retirees are women and made low wages during their decades of public work. The pension is calculated based on those wages, so the pensions started low too.
Citing data from the Department of Retirement Systems, Farrell said 63% of those covered by PERS/TRS Plan 1 have pensions below $30,000 annually and 91% have pensions less than $48,000, according to the Washington State Labor Council. Also, even with the one-time COLAs, Plan 1 retirees’ pension incomes have lost more than 40% of its actual value, or “purchasing power.”
Bob Kirkman taught 5th grade in the Chehalis School District for 38 years and is on Plan 1.
“It makes you feel devalued,” Kirkman said. “For one reason or another, I think they’re just waiting for all the Plan 1 members to die off.”
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Article by: Annika Hauer
Author: Washington State Journal
