In 2011, due to the recession’s impact on the budget, the state of Washington eliminated the cost-of-living adjustment (COLA) for the oldest public sector retirees. They also cut employers’ health insurance contribution for Medicare-eligible retirees who had coverage through the Public Employee Benefit Board (PEBB). Proposals have finally passed to provide some relief.
SSB 6340 will provide a one-time 1.5 percent COLA to Plan 1 pensions with a cap of $62.50 per month. Plan 1 retirees will see that increase in their July pension payout. In addition, the final state budget includes an increase to the PEBB Medicare Supplement of $18 per month. It will be effective January 2019.
While these proposals are nowhere near enough to address the 25 percent loss of purchasing power for Plan 1 retirees, nor the dire financial position many PEBB Medicare retirees face due to massive increases in premiums, it is the first increase they have received since the cuts were made.
Washington’s public sector retirees should be proud of the work they have done to educate lawmakers about the importance of stabilizing these pensions. According to the National Institute on Retirement Security, there is an $8.95 economic output for every dollar contributed by the state, cities, and counties. These pensions are therefore important not only to those who have earned them, but also to our state’s overall economic health. It is a step in the right direction, and seniors should take note of the immense political power they have when they work together.
(Britton-Sipe is the Executive Director of the Retired Public Employees Council of Washington)