The Public Employees Retirement System (PERS) system and Teachers Retirement System (TRS) covers state, county, most local government employees, teachers and other school employees. The employees in these systems and their employers pay into their retirement and the accumulated funds are invested by the Washington State Investment Board. The WSIB has obtained excellent returns, 8.9 percent on average over the last 20 years. Seventy-five percent of funds paid to retirees are from those returns.
Plan 1 PERS and TRS retirees previously received a Cost of Living Adjustment (COLA) like the members of many other plans in the state. That COLA was eliminated in 2011 due to the economic downturn. Retirees in Plan 2 and 3 receive a COLA of up to 3 percent, based on the inflation index each year.
The loss of a regular COLA for Plan 1 retirees has resulted in a loss of more than 20 percent of their purchasing power in the past 10 years. This has been devastating for our most senior retirees.
Workers who have taught our children and provided essential services to all citizens ought to have the retirement system they paid for and were promised. While the goal of Plan 1 retirees is restoration of a recurring COLA, state legislators should support the restoration of a modest one-time 3 percent COLA proposed by the Legislature’s Select Committee on Pension Policy this legislative session.