Senate Bill 5113 amends multiple retirement statutes and adds new sections to chapters 41.32 and 41.40 RCW to create an ongoing annual cost-of-living adjustment (COLA) for PERS plan 1 and TRS plan 1. The bill prescribes how the COLA is calculated beginning July 1, 2026 using the ratio of two calendar-year Consumer Price Index (Seattle area) averages, defines an “original dollar amount” for each allowance, caps the initial annual adjustment at 3 percent, prohibits an adjustment that would reduce an allowance below the original amount, and limits year-to-year change in the adjustment to 3 percentage points. The bill lists a series of prior, one-time COLA increases (effective 2018–2025 with specified caps for some years), excludes beneficiaries who receive benefits under certain cited RCWs, requires cumulative application where members elected specific alternative benefits, and states the legislature may later amend or repeal the new COLA provisions. The bill also establishes funding and contribution rules. It directs that remaining costs of benefit improvements effective July 1, 2018 through June 30, 2025 be amortized over a fixed 15-year period as of July 1, 2025, and generally requires benefit improvements effective after June 30, 2025 to be amortized over a fixed ten-year period. For the consolidated prior COLA costs combined with the new ongoing COLA the bill specifies a 15-year financing period; contribution rate components are defined to include normal cost, amortization of unfunded liability, and amounts to amortize benefit improvements, with certain supplemental rates charged to employers. The state actuary is required to prepare valuation results and the council must adopt contribution rates, with some contribution rates effective September 1, 2025. The act amends RCW 41.32.4992, 41.40.1987, 41.45.060, and 41.45.070, creates new sections in chapters 41.32 and 41.40, and includes an emergency declaration; Section 8 states the act takes effect July 1, 2025. The provided material is incomplete in places: portions of RCW 41.45.060 are cut off, the detailed statutory language implementing the 15-year financing mechanics is not fully shown, and the formal agency or council names referenced are not specified in these extracts.

If enacted, current PERS and TRS plan 1 retirees and beneficiaries would start receiving an annual cost-of-living adjustment beginning July 1, 2026 that is calculated by comparing Seattle-area CPI averages (index B/index A) and applied to each person’s original benefit, but the first year’s increase cannot exceed 3 percent, year-to-year changes cannot differ by more than 3 percent, and no adjustment may reduce a benefit below its original dollar amount. The bill also recognizes and preserves a sequence of past one-time COLA increases from 2018–2025 (some with dollar caps) and excludes certain benefit types from these new automatic adjustments; people who elected certain alternative benefits will have adjustments compounded so their allowance reflects both changes. Employers and the state would see higher and earlier contribution obligations to pay for both the consolidated past COLA costs and the new ongoing COLA: remaining costs from 2018–2025 and specified 2025–2026 benefit improvements are to be amortized over a fixed 15-year path with contribution rates effective September 1, 2025, while benefit improvements after June 30, 2025 are generally amortized over a fixed ten-year period. That means school districts, state agencies, public safety employers, and institutions of higher education (which must begin funding part of supplemental retirement costs starting in 2035) will face supplemental rates charged as a level percentage of payroll; the state actuary, the retirement council, and the Department of Retirement Systems must prepare valuations, adopt and collect rates, and notify OFM. The bill text provided omits precise funding mechanics for the 15-year consolidation and some cross-referenced sections, so exact contribution impacts and timing for some employer groups are not fully specified here.