Washington Senate Bill SB5718

Washington 2025-2026 Regular Session

• Introduced: 2/10/25
• Refer: 2/10/25

Caption

AN ACT Relating to providing members of the teachers' retirement system plan 3 and school employees' retirement system plan 3 that were never offered a choice of plan 2 the opportunity to irrevocably transfer to plan 2 for future service;

Summary

SB 5718 creates a limited one-time opportunity for certain members of Washington’s Teachers’ Retirement System Plan 3 and School Employees’ Retirement System Plan 3 to irrevocably transfer to Plan 2 for future service. The bill is aimed at members who joined during specified date ranges and were never given a choice between Plan 2 and Plan 3 when they entered the retirement system. Eligible members may make the transfer during a January after the bill’s effective date, but only if they earn service credit for that month. The bill also bars anyone already retired from transferring into Plan 2 and states that the Legislature reserves the right to modify or discontinue the transfer option in the future. In addition, if the state receives IRS guidance indicating the transfer option conflicts with federal law, the transfer authority is suspended until the conflict is resolved through subsequent federal guidance.

Impact

The bill would amend Washington’s retirement statutes governing TRS and SERS by adding new sections that authorize a targeted transfer mechanism from Plan 3 to Plan 2 for future service only. It affects a narrow class of active public school employees and teachers who entered the plans during the specified periods and were not offered a plan choice, while excluding retirees. The bill also includes a federal conformity safeguard that pauses implementation if the IRS determines the option would violate federal tax law or retirement plan requirements.

Sentiment

Based on the bill text and the absence of recorded committee testimony or votes, the measure appears to be a technical and corrective retirement policy proposal rather than a broadly controversial one. Its purpose is framed as providing a missed choice to affected members, suggesting a remedial intent. No formal vote history or hearing record is provided here to indicate opposition or support levels, but the structure of the bill suggests a narrowly tailored, member-specific fix.

Contention

The main potential point of contention is the retroactive or selective nature of the benefit, since the bill grants a transfer option only to members who were never offered a choice and only for future service. Another possible issue is administrative and fiscal impact on the retirement systems, including how the transfer affects plan funding, member benefits, and employer obligations. Federal tax compliance is also a concern, which is why the bill includes a suspension clause tied to IRS guidance. The exclusion of already retired members may also be disputed by those who believe they were similarly affected.