The Senate's vote this morning on one of Gov. Chris Gregoire's pension reform bills drew divided support from Democrats and Republicans. Substitute House Bill 2021 gets rid of automatic yearly increases in pension payments to the state’s Teachers Plan 1 and Public Employees Plan 1 participants. But it adds a higher minimum payment for those who retired long ago.
Proponents say eliminates almost $4 billion in future Plan 1 pension liabilities (of about $7 billion on the books). It also saves around $524 million in state contributions from all funds in the short short term. About 108,703 people are affected by the decision eventually, including more than 90,000 already retired.
The bill has provisions to lift the alternative minimum benefit to $1,500 per month for PERS 1 and TERS 1 participants who have been retired for at least 25 years and have at least 20 years' state service.
Eight Democrats and nine Republicans voted against it, including Sen. Karen Fraser of Thurston County and Sen. Steve Conway of Tacoma. Fraser said many retirees count on the increases so she wants to revisit the cost-of-living adjustments in the future when financial times are better.
Conway said the vote to eliminate automatic adjustments, which had been law since 1995, would leave open the possibility of returning to the issue year by year. But he said the bulk of savings are based on permanently ending increases to the payments.
Sen. Doug Ericksen of Ferndale voted in favor of the bill and objected to claims the change will be permanent, saying “nothing is permanent in Olympia It simply says we will come back as a Legislature every year and make the determination” on giving a COLA.
Ways and Means chairman Ed Murray, D-Seattle, said the issue should be revisited in the future.
Among South Sound lawmakers, Randi Becker of Eatonville was the lone Republican voting in favor. Democrats in favor included Jim Kastama of Puyallup, Derek Kilmer of Gig Harbor, and Debbie Regala of Tacoma. Locals voting against were Republican Dan Swecker of Rochester and Democrats included Tim Sheldon of Potlatch, Fraser and Conway.
An emergency clause was attached to the bill and it takes effect July 1.