OLYMPIA, Wash. (AP) — Washington lawmakers have approved a plan to reduce benefits for future state workers who take early retirement.
The state House finalized the plan shortly before 11 p.m. on Tuesday night, finalizing a deal that had eluded lawmakers for months and delayed final action on the state budget.
State workers who retire before age 62 are already penalized with lower pension benefits. Under the new bill, those penalties will increase to as much as a 50 percent reduction for workers retiring at the age of 55.
The changes only apply to workers hired starting in May 2013. The plan is expected to save the state an estimated $1.3 billion over 25 years.
Lawmakers also agreed to reduce the assumed rate of return in the pension system to 7.7 percent instead of 8 percent. Some lawmakers viewed the 8 percent figure as overly optimistic.