(The Center Square) – A bit of help is on the way for thousands of Washington retirees, who currently receive small monthly distributions.
This week Gov. Bob Ferguson signed House Bill 2124, sponsored by Rep. Travis Couture, R-Allyn, to modernize how small pension benefits are paid out.
“As we’re looking at this affordability crisis that we’re in, with the cost, groceries, rent, insurance, healthcare, childcare, you name it everything is through the roof, with some of the highest cost of living in all 50 states,” said Couture in an interview Wednesday with The Center Square. “Mailing somebody a $50 check is not really measurable relief for someone who has earned this money.”
Under current law, “the Department of Retirement Systems can only offer a one-time “lump sum” payout if the retiree’s monthly benefit is $50 or less. HB 2124 raises that limit to $250, allowing thousands of retirees to choose an immediate, substantial payment rather than waiting for tiny monthly checks,” according to Couture’s press release.
A recent report from the Washington Roundtable found Washington as the fifth most expensive state in the U.S., with prices rising twice as fast as California’s and essentials like housing and groceries up more than 50% in the last decade.
“We updated that threshold so that they could get larger lump sum payments and more flexibility for those pensioners,” said Couture. “It’s a more sizeable amount of their own money.”
Couture, who serves as the House Republican Budget Leader said forcing a senior to wait 20 years to collect a small pension in tiny increments makes no sense in this economy.
“It’s a more sizeable amount so they can actually cover some of these extreme costs that we have in our state right now and on top of that it’s an efficiency, he said.
The Allyn Republican explained that it should save government money because they won’t be mailing out small checks every month.
“When the government is mailing out these micro-checks, it’s a lot of work to stuff the mail and do the administration of all of that,” he said. “So, you’re going to be mailing out less checks now, which is actually good for the taxpayer.”
There are several pension programs in Washington, administered by the Department of Retirement Systems (DRS).
Key plans include PERS, TRS, SERS, LEOFF, and WSPRS, largely consisting of Plan 2 (low-risk defined benefit) and Plan 3 (hybrid defined benefit/contribution) options.
According to DRS information provided to Couture on Thursday, as of the 2024 actuarial valuation about 5,300 PERS 2 retirees had monthly pension benefits that started under $250, meaning all those people — should they choose — would be eligible to take the lump sum payout.
Democrats raided another pension program during the recent legislative session, which ended this month. Lawmakers shifted $4 billion from the Law Enforcement Officers and Firefighters (LEOFF 1) retirement fund surplus. The bill that passed terminates and restructures the plan to unlock the assets so lawmakers could divert the money for general fund expenditures, and into the Climate Commitment Act Fund.
“When you strip away the legislative jargon, this is a $4 billion grab from the retirement security of our first responders,” said Couture, in a Friday post from the LEOFF 1 Coalition.
The bill’s passage comes despite record state revenues and a massive tax increase passed during the previous session. Republican leaders say the maneuver sets a dangerous precedent for every other public pension fund in Washington.
