Blog

Increasing the assumed investment return reduces pension contributions now, but could result in future increases to contributions

The Legislature has passed ESSB 5357, which would increase the state’s assumption of investment returns that is used to determine the funded status of pension plans to 7.25%. This is a backward step in a 15-year effort to reduce the assumption so that it better reflects the level of risk. In 2010, Washington assumed 8% […]

Should the state use the LEOFF surplus to help close the shortfall, use it to fund new PERS and TRS pension benefits, or hide it?

The state is sitting on a large surplus in the Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System Plan 1. The various budget proposals differ in how they would use it. LEOFF 1 has been closed to new members since 1977 and only three members are still working. As of June 30, 2023, it […]

Audit recommends changing the paid family and medical leave rate formula again

In 2022, Washington’s paid family and medical leave (PFML) program experienced cash deficits. Solvency concerns resulted in several program changes that year, including actuarial reporting requirements. (We discussed the program and its solvency problems in a 2022 policy brief.) In 2023, the Legislature appropriated $200 million from the general fund-state to the family and medical […]

Paid family and medical leave premium will increase to 0.92% next year

The paid family and medical leave (PFML) premium rate will increase to 0.92% in 2025. The Employment Security Department (ESD) made the announcement during today’s meeting of the PFML Advisory Committee. Although the 2025 rate is significantly higher than the current 0.74% rate, ESD still expects to see short term deficits in the PFML account […]

Paid family and medical leave premium rate is projected to increase to 0.91% next year (and it could hit the statutory maximum in 2027)

According to the Employment Security Department, the paid family and medical leave (PFML) premium rate may rise to 0.91% next year. (This is not yet final because the rate is based on the account balance on Sept. 30. The final rate will be announced in October.) The PFML actuary, in a PFML advisory committee meeting […]

Average workers’ compensation rates could increase by 3.8% in 2025

The Department of Labor & Industries (L&I) proposes increasing the average workers’ compensation rate by 3.8%. Under the proposal, rates would increase for 283 of 326 risk classes next year. According to L&I, “The proposed increase is slightly less than what L&I expects to pay out for 2025 claims, so the agency will make up […]

Pension Funding Council adopts lower state pension contribution rates for 2025–27, could save $205 million in the GFS

Yesterday the Pension Funding Council (PFC) adopted state pension rates for 2025–27. The employer contribution rates will decline for each pension system from FY 2025 to FY 2026, and they will either decrease further or stay the same in FY 2027 (depending on the system). For example, the employer contribution rate for the public employees’ […]

A 5.9% increase in Washington’s average annual wage will impact state benefit programs

According to the Employment Security Department (ESD), Washington’s average annual wage was $89,138 in 2023, a 5.9% increase over 2022. ESD reports, “The increase was driven by a 2.5% increase in employment and an 8.5% increase in total wages and salaries, which grew by nearly $24.6 billion in 2023.” The state average wage is used […]

Washington will join 15 other states with an auto-enrollment retirement program

This year the Legislature passed, and the governor signed, ESSB 6069. The legislation establishes “Washington Saves,” an “automatic enrollment individual retirement savings account program.” Under the program, employees will be allowed to contribute to an IRA that is facilitated by the state through automatic payroll deductions. For employees of covered employers, enrollment will be automatic, […]

Washington’s workers’ compensation benefit costs are still the highest in the country

According to the National Academy of Social Insurance (NASI), Washington’s workers’ compensation benefit costs per covered worker are still the nation’s highest. Benefit costs in Washington were $849.67 per covered worker in 2021 (up from $824.53 in 2020). The second highest was $772.41 per covered worker in Wyoming. As a share of covered wages, benefit […]