An Olympia retiree group and two major labor unions plan to sue next month in an attempt to win back the cost-of-living adjustments for 109,000 retirees that lawmakers voted to cut this year.
The COLAs were for the Teachers Retirement System Plan 1 and Public Employees Retirement System Plan 1, which have the biggest unfunded liabilities of the state-run pension funds.
“It’s not whether we are going to pursue legal action; it’s when and how,” said Cassandra de la Rosa, executive director of the 9,500-member Retired Public Employees Council of Washington.
The Washington Federation of State Employees and Washington Education Association plan to sue in October over the same issue, and that suit could incorporate the retirees council as well, federation spokesman Tim Welch said. The WEA confirmed it also is part of the action on behalf of retired teachers.
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Ending the COLAs saved the state about $400 million in pension contributions this biennium alone – and cut unfunded liabilities by $7 billion over 25 years.
Budget writers in the Legislature have said they are confident the repealed COLAs can pass legal muster, because the original 1995 legislation lets the Legislature change the rules.
De la Rosa pointed to the same 1995 law. She said its clause describing the Legislature’s rights is “similar if not identical” to the “reservation clause” in another pension-benefit repeal that a King County judge has already struck down.
The latter case dealt with “gain-sharing” benefits for retirees, and it remains in litigation in King County.
De la Rosa said “roughly half” of the value of the Plan 1 living adjustments is traceable “to legitimate gain-sharing distributions” earned previously by members and paid out as part of yearly COLAs.