An unanticipated spike in inflation in 2021 and 2022 impacted vendor costs for the agency’s multi-biennia project to replace its 30-year-old pension administration system. Current budget authority for the project was based on detailed market analysis completed in 2020 which was the basis for the decision package submitted in 2020 and approved/funded in early 2021. Inflation, that had averaged less than 2.0% for more than a decade, spiked to 7.0% and 6.5%, providing a different context for vendors. The cumulative impact of inflation appears in the 2025-27 biennium, because the project’s contract is deliverable-based and contains holdback provisions. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State)

The Department of Retirement Systems (DRS) requests funding to hire additional FTEs for the agency’s fiscal team to support an increasing number of pension transactions that have manual financial processes. These include facilitating customer benefit payments, state financial and federal tax reporting, the collection of timely and accurate contributions to the state’s pension systems, and vendor payments. While the various transactions have increased between 30 and 70 percent over the past decade, the associated FTEs in the fiscal area have been reduced. (Dept of Retirement Systems Expense - State)

An adjustment is made for pension contribution rates, including to fund a benefit increase of 3%, up to a maximum of $110 per month for eligible Public Employees' and Teachers' Retirement Systems Plan 1 members. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State)

Funding is provided for administrative costs associated with review and implementation of a bill including the merger of assets and liabilities of the Law Enforcement Officers' and Firefighters Plan 1 and Plan 2. (Dept of Retirement Systems Expense - State)

Funding for bargaining includes a 3%/2% general wage increase, targeted job classification increases, wildfire disaster leave, expanded bereavement leave, and paid vaccine travel time during pandemic emergencies. The agreement also includes: an additional $1 per hour supplemental shift premium for eligible employees who are assigned to a facility that provides direct care to residents, patients, and/or clients and whose duties are performed on location on evenings and weekends; 5% premium pay for employees who are assigned to a 24/7 facility that provides direct care to residents, patients, at-risk youth, and/or clients and whose duties are required to be performed on location, which will be in effect for the 2025–27 biennium; three additional steps on the nurse salary schedule; and an increase to the annual lump-sum payment for employees in LNI risk codes 7200/7201 from $500 to $750. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State)

Funding is provided for wage increases for state employees who are not represented by a union or are not under a bargaining agreement that is subject to financial feasibility determination. It is sufficient for a general wage increase of 3%, effective July 1, 2025, and a general wage increase of 2%, effective July 1, 2026. This item includes both general government and higher education workers. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State, OASI Revolving Account - Non-Appropriated)

Funding is provided for classified state employees who are not represented by a union or not covered by a bargaining agreement subject to financial feasibility determination, for pay increases in specific job classes in alignment with other employees. (Dept of Retirement Systems Expense - State)

This item adjusts the employer funding rate for public employee insurance benefits to reflect policy-level decision packages. It increases the rate by $8 per month in the first fiscal year and decreases the rate by $34 per month in the second fiscal year, compared to the maintenance-level update, for a total rate of $1,315 in the first year and $1,355 in the second year. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State, OASI Revolving Account - Non-Appropriated)

An adjustment is made to the base pension rates, as set out in a proposed bill addressing the calculation of the base rate for the 2025–27 biennium, as well as amortization of Plan 1 benefit increases. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State)

Adjustments are made for each agency's anticipated share of charges for archives and records management services provided by the Secretary of State's Office. (Dept of Retirement Systems Expense - State)

Adjustments are made for each agency's anticipated cost of audits performed by the State Auditor's Office. (Dept of Retirement Systems Expense - State)

Adjustments are made for each agency's anticipated cost of legal services provided by the Attorney General's Office. Because legal services expenditures are based on consumption, funding provided in the central service model is not all inclusive. The methodology to estimate consumption is a two-year average and allows for analysis to incorporate unique agency circumstances. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State)

Adjustments are made to reflect each agency's anticipated share of charges from Washington Technology Solutions for the Office of Cybersecurity, state network, enterprise and small agency IT services, enterprise architecture and data management, Microsoft 365 licenses, and other items. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State, OASI Revolving Account - Non-Appropriated)

Adjustments are made to reflect each agency's anticipated share of charges from the Department of Enterprise Services for Capitol Campus costs; real estate, risk management, and small agency services; the Perry Street and Capitol Campus child care centers; enterprise applications, and other items. (Dept of Retirement Systems Expense - State)

Adjustments are made to reflect each agency's anticipated share of charges from the Office of Financial Management for existing statewide applications, the One Washington program, and other central services. See Chapter 11 of the 2025–27 OFM Budget Instructions for allocation methodologies. (Deferred Compensation Admin Account - Non-Appropriated, Dept of Retirement Systems Expense - State, OASI Revolving Account - Non-Appropriated)

Adjustments are made to reflect each agency's anticipated share of charges from the Office of the Governor for the Office of Equity. (Dept of Retirement Systems Expense - State)