This bill amends existing retirement statutes and adds new provisions to provide specified past and future cost-of-living adjustments (COLAs) and to change how employer contribution rates and amortizations are calculated. It amends RCW 41.32.4992 and 41.40.1987 to specify a sequence of percentage increases and dollar caps for TRS plan 1 and PERS plan 1 beneficiaries for years beginning with increases effective in 2018, 2020, 2022, 2023, 2024, and 2025, and it adds new annual automatic COLA sections to chapters 41.32 and 41.40 RCW. The new COLA regime directs the department to calculate an annual adjustment for eligible plan 1 retirees and beneficiaries (those with a retirement allowance in effect at least one year) using a ratio of two Seattle-area consumer price indices; the adjustment is applied beginning with the July payment each year, may not reduce a retirement allowance below the original amount, is initially capped at 3 percent, and may change by no more than 3 percentage points from the prior year. The COLA is to be compounded with certain election-based benefits referenced in the statutes. The bill also modifies actuarial and contribution rules by amending RCW 41.45.060 and 41.45.070 and related sections. Employer contribution rates are defined as the sum of components including normal cost, amortization of plan 1 unfunded liabilities (on a rolling ten-year basis), and amortization of benefit improvement costs. Benefit improvements effective after June 30, 2025 are generally amortized over a fixed ten-year period; remaining costs for benefit improvements effective July 1, 2018 through June 30, 2025 are to be amortized over a fixed 15-year period with related contribution rates effective September 1, 2025; certain costs created by this act are also amortized over 15 years and not subject to statutory minimums or maximums. The state actuary is directed to prepare final valuations, supplemental rates for additional benefits are to be charged to employers as specified, and the council adopting rates must notify OFM and the Department of Retirement Systems. The bill preserves certain historical exemptions and supplemental rate rules (including a ten-year method for automatic postretirement adjustments dating to July 1, 2009). The act amends RCWs 41.32.4992, 41.40.1987, 41.45.060, and 41.45.070 and adds new sections to chapters 41.32 and 41.40 RCW; it contains an emergency clause and is stated to take effect July 1, 2025. The provided extracts are incomplete: section 6 ends mid-sentence, the specific department and council names are not always identified in these extracts, several cross-referenced sections and a chapter citation for “Laws of 2025” are missing, and some implementation details and full statutory interactions cannot be confirmed from the material provided.

If enacted, most plan 1 retirees in the Teachers' and Public Employees' retirement systems will start receiving an automatic annual cost-of-living adjustment beginning July 1, 2026 that is calculated from Seattle-area CPI data, applied cumulatively with certain elected benefits, capped so it never reduces a retiree below their original allowance, limited to 3% for the initial annual adjustment, and limited to a 3% year-to-year change. The Department (unspecified in the text) and the state actuary will be required to compute each retiree’s original allowance and the CPI ratio used for the annual increase and begin applying those adjustments in July payments; the bill also contains an emergency clause making the act effective July 1, 2025. State and local employers will likely face higher and more front-loaded contribution obligations to pay for these and other benefit improvements: employer rates will include portions to amortize plan 1 unfunded liabilities over a rolling ten-year period and to amortize costs of benefit improvements over fixed tenor fifteen-year periods, with contribution rates for the costs created by this act becoming effective September 1, 2025 and in some cases not subject to statutory minimums or maximums. The PERS plan 1 supplemental rate is charged across PERS, SERS, and PSERS employers and the TRS plan 1 supplemental to TRS employers, so school districts, public safety agencies, and other public employers should expect new supplemental charges; some higher education costs begin partial funding in 2035. The bill leaves unclear the specific department and council formal names and some implementation details of the 15-year financing policy, so exact employer dollar impacts and administrative steps will depend on forthcoming actuarial calculations and agency rulemaking.