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Published on Tuesday, November 20, 2012

Pension ruling could hobble state budget

In 2011, HB 2021 eliminated the annual cost of living increase in benefits to retirees in two older state pension plans as part of a bipartisan effort to reduce the budget shortfall. Those affected by the decision include members of the Public Employees Retirement System Plan 1 (PERS 1) and Teachers Retirement System Plan 1 (TRS 1) currently in the plan, or who left the government service on or after 1995. The law intends to save the state general fund $525 million in 2013-15.

On November 9, 2012,Thurston County Superior Court Judge Chris Wickham filed his decision that the Legislature acted illegally in eliminating this annual increase, but has yet to issue the final order. After the final order is issued, the state can appeal which could take months or even years to reach a final ruling. Rep. Ross Hunter, House budget chairman, is confident the state will appeal. He and other lawmakers believe they reserve the right to change or cut these increases in reference to a 17-year-old provision that indicates there is no contractual right to the increase in an annual cost of living increase.

Read Olympian article: Pension ruling could hobble state budget.

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