This bill adds new transfer rights and changes administrative procedures for members of Washington’s public retirement systems. It creates new sections in chapter 41.32 RCW (Teachers’ Retirement System, plan 3) and chapter 41.35 RCW (School Employees’ Retirement System, plan 3) that allow certain plan 3 members who joined within specified date ranges and were never offered a choice between plan 2 and plan 3 to make an irrevocable choice in a January after the section’s effective date: for TRS members who joined July 1, 1996–June 30, 2007 the choice is to transfer to plan 2 if the member earns service credit for that January; for SERS members who joined September 1, 2000–June 30, 2007 the text permits an irrevocable choice “to transfer to plan 3” (the provision also states that a person previously retired from plan 3 may not transfer to plan 2). The Legislature expressly reserves the right to later modify or discontinue these transfer rights. The bill amends existing statutes RCW 41.32.835 (teachers), 41.35.610 (classified employees), and 41.40.785 (public employees) to standardize a 90‑day deadline for newly employed persons in an eligible position to make an irrevocable choice between plan 2 and plan 3; if no choice is made by day 90 the member becomes a plan 2 member (or resumes prior plan membership if previously established). For administrative purposes, members who have not elected plan 3 are reported in plan 2 with member and employer contributions until election or default to plan 3, and upon becoming plan 3 all service credit and employee accumulated contributions transfer to the plan 3 defined benefit and defined contribution accounts. The amendment to RCW 41.40.785 applies to employees who become employed in an eligible position on or after January 1, 2026. The bill includes a procedural suspension mechanism: if the Internal Revenue Service issues guidance that a provision conflicts with federal law, the conflicting provisions are suspended until subsequent IRS guidance resolves the conflict. The text provided does not state the bill’s effective date, does not identify the specific “department” responsible for reporting contributions, and contains an apparent inconsistency in the SERS transfer provision (permitting a transfer “to plan 3” while also prohibiting persons previously retired from plan 3 from transferring to plan 2) that cannot be resolved from the extracted material.

Certain former Plan 3 members who joined during the 1996–2007 (teachers) or 2000–2007 (school classified) windows and were never offered a choice will get a recurring January opportunity to switch their future service into Plan 2, while people already retired from Plan 3 cannot move. New hires in eligible positions (teachers, classified staff, and public employees hired on or after Jan. 1, 2026) will have 90 days to pick Plan 2 or Plan 3, otherwise they will be reported and treated as Plan 2 until a later election; when someone becomes Plan 3 their prior service credit and employee contributions move into Plan 3 accounts. Practically, that means affected members gain a one-time path to a different benefit structure, employers and the retirement system must handle more election processing and transfers, and retiree status limits who can change plans. These shifts could change future retirement liabilities and contribution flows and create added administrative and actuarial work for the retirement systems and employers; costs and funding needs may move depending on how many members switch. The bill also allows suspension of the transfer rules if IRS guidance finds a conflict and reserves the Legislature’s power to change the transfers, so timing and availability of the transfers are uncertain. Key details not provided here include the bill’s effective date, which department administers the reporting, and an apparent inconsistency about one transfer provision that cannot be resolved from the extracted text.