The Legislature passed a law this year to end gain sharing after a final distribution on January 1, 2008. The legislation provides a new benefit for Plan 1 retirees of the Public Employees’ Retirement System (PERS) and the Teachers’ Retirement System (TRS).
If you’re a PERS or TRS Plan 1 retiree, you will receive an additional Uniform Cost of Living Adjustment (COLA) increase July 1, 2009 in addition to the Uniform COLA increase caused by the January 1, 2008 gain sharing event. Both increases are permanent and will be adjusted by three percent each July.
The new law also contains a provision on what would happen if a court were to overturn the legislation. If a court decides the repeal of gain sharing is invalid, the additional COLA will no longer be valid.
The 1998 Legislature passed a law that created gain sharing. If the Washington State Investment Board’s earnings on the state retirement fund average more than 10 percent over a four-year period, the portion over 10 percent is declared “extraordinary gains.” In January of even numbered years, eligible retirees may potentially receive a gain sharing benefit in the form of an increase to their uniform COLA. The law stated that gain sharing is not a contractual benefit and may be subject to future modification or elimination by the Legislature. The 2007 Legislature eliminated gain sharing and added new benefits.
Summer/Fall 2007