2022 Pension-Related Legislation
SHB 1701: LEOFF 2 Tiered multiplier or lump sum
Beginning January 2023, this bill provides additional pension benefits in Plan 2 of the Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System. The additional benefits include a lump sum benefit of $100 per service credit month for members or beneficiaries of members who were retired as of Feb. 1, 2021. For those who retire after Feb. 1, 2021, they will have an option of the lump sum or an increase to their benefit multiplier to 2.5% for the 10 years of service from years 16 through 25.
Members and beneficiaries of members who retire with a line-of-duty disability will receive the greater of a one-time lump sum benefit equal to $100 per service credit month or $20,000. Retirees or their beneficiaries receiving a one-time lump sum payment may use the funds to purchase an optional actuarially equivalent life annuity benefit.
DRS will contact affected retirees later this summer regarding their payment options, and will update benefit estimate tools and retirement applications to reflect these changes.
SB 5676: One-time adjustment for TRS 1 and PERS 1
This bill provides retirees of Plan 1 of the Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS), who received a monthly benefit on July 1, 2021, a one-time benefit adjustment of three percent multiplied by their monthly benefit, not to exceed $110, effective July 1, 2022. Members will see this increase on their July 31 pension check. This increase only applies for members that are not receiving a minimum benefit.
HB 1669: PSERS catastrophic disability benefit
This bill would establish a catastrophic disability allowance under the Public Safety Employees’ Retirement System (PSERS) Plan 2 equal to 70% of the member’s average final compensation. The bill provides that the combined benefits from PSERS Plan 2, Social Security, and Workers’ Compensation cannot exceed 100% of the member’s average final compensation, with any amount that exceeds 100% offset from the PSERS Plan 2 benefit. Regardless of the offsets, the PSERS Plan 2 benefit may not be less than the member’s accrued retirement benefit. A totally disabled member is subject to medical and financial examinations and disclosures to the Department of Retirement Systems to ensure continued eligibility for the benefit. If a member is later able to engage in substantial gainful activity, the benefit reverts to the PSERS actuarially reduced earned disability benefit. This bill is effective June 9, 2022.
ESHB 1699: Increasing the limit for retirees who return to work to 1040 hours for certain employment within schools
Effective immediately through July 1, 2025, the bill allows PERS, SERS and TRS retirees to work in schools districts up to 1040 hours and continue to receive their pensions as retirees. These retirees are eligible to work within school districts in non-administrative positions or in second-class school districts as superintendents or administrators.
EHB 1752: Adding a Roth option to the Deferred Compensation Program
DRS will offer a Roth option within the Deferred Compensation Program (DCP), no later than December 2023. DRS will provide additional communication to the employer community regarding system requirements later this summer and educational material to customers in mid-2023.
SSB 5791: Providing a lump sum benefit to LEOFF 1 retirees
A lump sum benefit of $100 per service credit month for LEOFF 1 members and their beneficiaries, will be payable by January 31, 2023. DRS will contact affected members later this summer regarding distribution options. If a LEOFF 1 member dies after this bill is effective but before the distribution of the lump sum benefit takes place, the distribution will be made to the member’s designated beneficiary. Members and beneficiaries of members who retire with a line-of-duty disability will receive the greater of a one-time lump sum benefit equal to $100 per service credit month or $20,000.