This bill creates a new "legacy retirement system" by merging the assets, liabilities, and membership of three closed plan 1 systems (LEOFF plan 1, TRS plan 1, and PERS plan 1) into a new chapter of Title 41 RCW and establishes a legacy retirement system account to hold transferred assets. It is a structural and administrative reorganization of existing retirement law that adds a new plan and amends many RCWs; it directs the Department of Retirement Systems to administer the merger consistent with federal tax qualification rules, requires IRS rulings, and states that employer medical liabilities for LEOFF plan 1 and disability board functions are unaffected. The act also includes notice and contingency language tied to IRS determinations; the text provided about the IRS contingency appears to limit or terminate parts of the act if the IRS finds unresolvable conflicts, but the full mechanics are not entirely clear from the excerpts. The bill modifies benefits and funding rules: it provides scheduled cost‑of‑living increases for TRS plan 1 and PERS plan 1 beneficiaries and establishes a new annual adjustment process beginning July 1, 2026 that ties postretirement adjustments to a Seattle CPI ratio with limits (initial increase capped at 3% and year‑to‑year change limited to 3%). It changes actuarial and funding rules including long‑term economic assumptions, asset smoothing constraints, employer contribution formulas and schedules, creation of legacy contribution amortization over rolling 10‑year periods, adjustments to supplemental rates (including a zero supplemental‑rate directive for certain systems beginning fiscal year 2026), and minimum contribution mechanics to be applied when legacy plan assets fall below actuarial liability. The bill also makes procedural and financial administration changes: it expands Department and state actuary duties (rulemaking, IRS submissions, billing employers monthly or by quarter, and reporting employer shares of administrative expense), authorizes use of certain interest earnings to pay legal and medical costs incurred to protect trust funds, defines terms and processes for benefit division and domestic relations orders, establishes a treasury income account with prescribed distribution rules, and revises numerous statutory definitions and cross‑references. Effective dates in the excerpts include July 1, 2025 for Sections 401–404, July 1, 2028 for Section 615, and September 1, 2027 for most other provisions. Several referenced sections and the full merger text (including some section details and the new chapter number) are not included in the provided excerpts, so specific operative language and some timing or contingency details cannot be confirmed from the material supplied.

If enacted, the three closed Plan 1s for teachers, public employees, and police/firefighters would be folded into a single "legacy retirement system" that keeps each group's benefits separate but pools their assets into one legacy account; retired PERS1 and TRS1 members would get several scheduled dollarand percentage increases over 2018–2025 and then move to an annual cost‑of‑living adjustment tied to the Seattle CPI beginning July 1, 2026 (with a 3% initial cap and a 3% year‑to‑year change limit). The Department of Retirement Systems must run the merger so no one loses benefits, ask the IRS for rulings that the merged plan remains tax‑qualified, and if the IRS finds unfixable conflicts some of the new benefit provisions could expire; higher‑education supplemental accounts and many accounting transfers and contribution rules are rearranged so the state actuary, OFM, the state treasurer, and employers handle new billing, transfers, and reporting. The groups most affected are Plan 1 retirees and beneficiaries (who are likely to see the listed lump and ongoing COLA improvements), employers of those plans (who will face a restructured schedule of employer contribution charges to amortize legacy liabilities over rolling ten‑year and other schedules, new minimum contribution triggers beginning around 2029 if the legacy account is underfunded, and continued monthly billing and possible reporting fees), and the Department of Retirement Systems, OFM, the state treasurer and state actuary (who take on new administrative, valuation, and transfer duties). Key implementation details about how assets are merged, exact chapter numbering, and the full text of the IRS‑sensitive merger provisions are not included here, so the timing, final employer cost impacts, and the scope of certain benefit changes remain somewhat uncertain.