The state’s contributions to 10 state pension plans have increased from $1.6 billion in 2014 to $3.3 billion in 2023, a 61% increase once adjusted for inflation
Tom Gantert
The Center Square Washington
The state of Washington’s contributions to its multiple pension plans offered to its employees have doubled in cost over the past nine years.
The state’s contributions to 10 state pension plans have increased from $1.6 billion in 2014 to $3.3 billion in 2023, a 61% increase once adjusted for inflation.
The varied retirement pensions that includes eight retirement systems and 15 retirement plans pay out $6.4 billion a year to an estimated 217,000 retirees, according to the latest state audit that covers through June 2023.
The state pointed out that the pension plans’ combined funded ratio has increased from 87% to 96% from 2014 to 2022.
The state said there were multiple reasons for the increase in contributions.
From 2014 to 2022, there has been a significant increase in the number of members earning benefits as well as the number of people receiving pensions. There were 300,000 active members in 2014 and that increased to 340,000 in 2022.
“All else being equal, the more active employees earning benefits, the more money required to fund those benefits during their working career,” said Luke Masselink of the Office of the State Actuary.
The number of retirees and beneficiaries receiving a state pension has increased from 157,000 in 2014 to 217,000 in 2022.
Several other factors played a part in increased contributions.
In 2023, the state increased the assumption of how long people would live while receiving a pension. That led to higher costs projections.
The state has reduced its expected rate of return on investments, which also led to higher contributions.
The state used a 7.8% expected rate of return on investments in 2014, and by 2022, they had gone to a more conservative 7% rate of return.
Investment returns can vary greatly from year to year. For example, the state pension plan PERS Plan 1 lost $57.3 million in investments in 2020, but saw that increase to $976.6 million in 2021 and $496 million in 2022.
This report was first published by The Center Square Washington.
Also read:
- Ridgefield American Legion Post 44 names its Legionnaire of the Year
Ridgefield American Legion Post 44 named Jade Bourke its 2025 Legionnaire of the Year, honoring his leadership, military service, and longstanding contributions to Ridgefield and nearby communities. - Clark County Auditor Greg Kimsey announces he won’t seek re-election
Clark County Auditor Greg Kimsey announced he will not seek re-election after more than 25 years in office, citing confidence in his staff and a desire to continue public service in other ways. - Letter: Has $450 million been wasted on a bridge that’s too low for the Coast Guard with a foundation too costly to build?
A Seattle engineer questions whether hundreds of millions of dollars have been spent on a bridge design he argues is unnecessarily risky and costly compared to an immersed tunnel alternative. - Washougal School Board Member Jim Cooper to resign on Jan. 30
Washougal School Board member Jim Cooper announced he will resign effective Jan. 30 after more than five years representing District 1. - Opinion: Fix Washington – House Republicans lead the charge against liberal chaos
Nancy Churchill argues that one-party Democratic control has driven up costs, weakened public safety, and harmed schools, and says House Republicans are offering a path forward through their Fix Washington agenda. - Opinion: Biden agreed with Trump on Maduro, so why aren’t liberals celebrating?
Lars Larson questions why American Democrats are reacting with outrage to the arrest of Venezuelan dictator Nicholas Maduro despite prior bipartisan agreement on prosecuting him. - Shooting suspect self-surrenders to Vancouver Police
Vancouver Police arrested a suspect who self-surrendered following a fatal shooting outside an area sports bar, with investigators continuing to review the case.
It means that every resident of Washington State pays roughly $421 this year to pay for the state retirement plans. A family of 4 pays $1,695 this year. We pay it when we go to the store, or the gas station, or when we pay our phone bill, and with our property tax. This spending takes precedence over fixing our roads or solving the homeless problem.