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SB 5350

Providing a benefit increase to certain retirees of the public employees' retirement system plan 1 and the teachers' retirement system plan 1.

2023-2024 Regular Session Introduced by Annette Cleveland and 28 co-sponsors

One-time 3% COLA (capped at $110/mo) for eligible PERS Plan 1 and TRS Plan 1 retirees; study for ongoing COLA in 2023–25, with employer contribution effects delayed to 2027.

Effective date 7/1/2023.
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Bill Summary · SB 5350

SB 5350 — Summary (2023, Chapter 397)

Title: Providing a benefit increase to certain retirees of PERS Plan 1 and TRS Plan 1
Effective date: July 1, 2023 (emergency clause)
Enacted: 2023 Regular Session; Governor signed May 9, 2023

Purpose / Intent

To restore some purchasing power lost to inflation for retirees in Public Employees' Retirement System Plan 1 (PERS 1) and Teachers' Retirement System Plan 1 (TRS 1) by providing a one-time cost‑of‑living adjustment (COLA) and to direct study and recommendation of a sustainable, ongoing COLA for Plan 1 beneficiaries.

Key provisions

  • One-time COLA: Grants a one-time 3% increase to monthly retirement benefits for eligible PERS Plan 1 and TRS Plan 1 beneficiaries, capped at $110 per month. Effective for payments beginning July 1, 2023.
  • Eligibility: Beneficiary must be retired (or a beneficiary) with an active retirement allowance on or before July 1, 2022. The increase does NOT apply to members receiving statutory minimum benefits.
  • Contribution timing: The employer/state contribution rate impacts attributable to this benefit increase are delayed until July 1, 2027; no supplemental contribution rate will be charged for these benefits during the delay (amendment adopted in House).
  • Study directive: The Select Committee on Pension Policy must study and recommend an ongoing COLA for Plan 1 during the 2023–2025 biennium. Any recommendation must consider employer contribution‑rate stability and be coordinated with reduction or elimination of the plans’ unfunded actuarial accrued liability (UAAL).
  • Appropriation: None specified; fiscal note available.

Who is affected

  • Directly benefits: PERS Plan 1 and TRS Plan 1 retirees/beneficiaries who retired on or before July 1, 2022 and who are not receiving minimum benefits. Statewide Plan 1 population context: ~74,000 retirees total, roughly 12,000 on the basic minimum benefit and ~5,600 on the alternate minimum (those on minimums are excluded from this one-time COLA).
  • Indirectly affected: Employers and the state (pension funding and future contribution rates), with a delayed budgetary impact until July 1, 2027.

Procedural / timeline notes

  • Unanimously passed both chambers (Senate 48–0; House 98–0), delivered to and signed by the Governor May 9, 2023; chaptered as Chapter 397, 2023 Laws.
  • The one-time benefit took effect July 1, 2023. The study and recommendations by the Select Committee are to occur during the 2023–2025 biennium. Contribution impacts are deferred until July 1, 2027.

Context & debate

  • History: Several prior one-time increases were provided after repeal of the older UCOLA (2018, 2020, 2021).
  • Supporters: Framed the COLA as necessary to preserve retirees’ purchasing power and fairness for Plan 1 beneficiaries.
  • Opponents: Raised concerns that benefit increases could pressure plan funding and employer contribution rates, potentially risking plan solvency if not coordinated with UAAL reduction.

Compiled from official sources — confirm details with the bill’s official record.

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