HB 1790
In CommitteeHouse
Defined benefit accrual
Increasing defined benefit accrual for specified years of service in the state retirement systems.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill increases retirement benefits for Washington state employees who accrue more than 30 years of service by adding an extra 0.5% per year to their retirement benefit calculation, and raises the base accrual rate for most systems to 2% per year. It also boosts benefits for those who delay taking their retirement payments after reaching 20 years of service.
- Increases the base retirement benefit accrual rate from 1% or 2% per year of service to 2% per year for most systems, and adds an additional 0.5% per year for each year beyond 30 years.
- Applies the extra 0.5% per year beyond 30 years to all major state retirement systems: SERS, TRS, and PERS.
- Adds a 25/100 of 1% monthly compounding increase for members who retire after 20 years of service and delay taking their benefit (i.e., defer retirement payments).
- Amends six existing state laws governing retirement calculations to reflect the new accrual rates and deferred benefit increases.
Who is affected
- State employees in SERS (Plan 1, Plan 2, and Plan 3) — State employees in the Washington State Employees Retirement System (SERS) who have or will accrue more than 30 years of service will receive a higher monthly retirement benefit starting after the bill takes effect.
- Public school teachers (TRS Plan 2 and Plan 3) — Public school employees in the Washington State Teachers Retirement System (TRS) who have or will accrue more than 30 years of service will receive a higher monthly retirement benefit.
- Local government employees — Local government employees (e.g., city, county, or special district workers) enrolled in the Public Employees Retirement System (PERS) or SERS will see increased benefits if they exceed 30 years of service.
- Current and future retirees — Retirees who retired before the bill takes effect will not benefit from the increased accrual rates, but those retiring after the effective date may receive higher benefits depending on their service length.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The increase in the base accrual rate to 2% per year (from 1% in some systems) and the additional 0.5% per year beyond 30 years significantly improves retirement security for long-tenured public employees—many of whom earn modest salaries and rely heavily on defined-benefit pensions for retirement income.
FinancialPeopleRef: Sec. 1(1), Sec. 2(1)(a), Sec. 3(1), Sec. 4(1)(a), Sec. 5(1), Sec. 6(1)(a)The 0.25% monthly compounding increase for retirees who delay collection after 20 years of service rewards delayed retirement and helps offset inflation risk—particularly valuable for workers who cannot afford early retirement and need robust lifetime income.
FinancialPeopleRef: Sec. 2(2), Sec. 4(2), Sec. 6(2)Enhanced retirement benefits may improve retention and recruitment of public safety personnel (e.g., correctional officers, firefighters, police) who work in high-stress, physically demanding roles and often retire before age 60—though this benefit is limited to those with 20+ years.
Public SafetyPeopleRef: Fiscal Impact section; Sec. 1–6Higher retirement benefits for teachers (TRS) may help mitigate chronic teacher shortages in Washington by improving long-term compensation competitiveness, especially for veteran educators in high-cost regions.
EducationPeopleRef: Fiscal Impact sectionImproved retirement security for state and local employees may reduce future reliance on housing assistance programs (e.g., SNAP, LIHEAP) in older age—though this effect is indirect and modest relative to the scale of the benefit increase.
HousingLean peopleRef: Fiscal Impact section
Potential Concerns (5)
The bill significantly increases state retirement system liabilities, raising long-term costs for the Washington State Public Employees Retirement System (PERS), State Employees Retirement System (SERS), and Teachers Retirement System (TRS). These added costs will strain the state’s budget and may require increased general fund transfers, higher employer contributions (e.g., from cities/counties), or future tax increases to maintain system solvency—costs ultimately borne by taxpayers and other public service programs.
FinancialPeopleRef: Sec. 1(2), Sec. 2(1)(b), Sec. 3(2), Sec. 4(1)(b), Sec. 5(2), Sec. 6(1)(b)Local governments (cities, counties, special districts) that contribute to PERS and SERS will face higher employer contribution rates to fund the increased benefit accruals, potentially diverting funds from local services like public safety, infrastructure, or schools—especially impactful for cash-strapped municipalities.
Local GovernmentPeopleRef: Fiscal Impact section; Sec. 1–6 (all systems)Increased retirement system costs may lead to reduced hiring or retention of sworn personnel (e.g., police, firefighters) in local agencies that contribute to PERS, as budgets tighten to cover rising employer contributions.
Public SafetyLean peopleRef: Fiscal Impact sectionIf the state shifts funding burdens to local school districts to offset rising TRS/SERS employer costs, it could reduce resources available for K–12 instruction, facilities, or support staff—though the direct impact is modest due to state-level funding buffers.
EducationLean peopleRef: Fiscal Impact sectionThe bill does not directly affect private-sector employment, but if the state increases general fund taxes or fees to cover retirement system shortfalls, it could indirectly raise compliance or operational costs for small businesses.
Business & EmploymentRef: Fiscal Impact section
Who Is Most Affected
State and local public employees with 20–30+ years of service—especially SERS, TRS, and PERS members—will see meaningful increases in retirement income, particularly if they exceed 30 years. These are often middle-income workers for whom pensions are the primary retirement asset.
Local governments (cities, counties, special districts) will face higher employer contribution rates to PERS/SERS, potentially reducing funds available for frontline services or capital projects. Smaller or fiscally strained jurisdictions will be disproportionately affected.
The state general fund may need to contribute more to maintain pension system solvency, increasing pressure on the state budget and potentially leading to tax increases or cuts elsewhere. However, the state’s strong fiscal position and pension funding ratios mitigate near-term risk.
Retirees who retired before July 1, 2025, receive no benefit under this bill, creating inequity between pre- and post-effective-date retirees with similar service histories.
Future state employees may be deterred by rising public-sector compensation costs and may seek private-sector alternatives, especially if they anticipate lower employer contributions or less predictable benefit structures in the future.