A Thurston County Superior Court decision to reinstate annual raises for members of two state pension plans should be overturned.
In 2011, the Legislature canceled these raises for all but the lowest-paid beneficiaries in order to balance the state budget. Its action should be sustained.
The pensions are the Public Employees’ Retirement System Plan 1 and the Teachers’ Retirement System Plan 1. They are the state’s most generous plans for these classes of employees.
Because of the plans’ cost to the state, they were closed to new hires in 1977 and replaced with less-generous plans. Most of their beneficiaries are retired. (An exception is outgoing Gov. Chris Gregoire.)
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The rule for pensions is that benefits cannot be taken away from employees who have earned them. But the benefit at issue here is not the core pension, but an add-on based on years of service. The added benefit was created 18 years after the plans were closed to new members, so no one joined the state expecting it.
The law creating the benefit in 1995 said it could be taken away, and in 2011, legislators voted to do so. Retirees could keep receiving all the raises granted under it but would be granted no new ones.
That put these Plan 1 members on the same footing as members of typical private plans, which have no cost-of-living or other escalators. The state’s Plan 2 and Plan 3 pensions, which are less generous than the Plan 1 pensions overall, have cost-of-living adjustments capped at 3 percent a year.
In his ruling, Judge Chris Wickham said the Legislature cannot offer a pension benefit and reserve the right to take it back. He allowed, however, that the Washington Supreme Court might disagree with him, and distinguish pension add-ons “from the core retirement rights” of pensions.
A disagreement is in order.