Washington Pension Calculator

State and local government employees collect taxpayer-guaranteed pension benefits that are far more generous than those available to most private-sector workers. The cost of traditional defined-benefit public pensions is unsustainable and has severe financial consequences that will affect generations of Americans. Use the calculator below, on the left-hand side of the page, to estimate the pension that you would collect after a career as a general government employee and to see how much money you would need to save on your own (your total annuity cost) to replicate that guaranteed income stream in the private sector.

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Public employees in Washington receive a good pension, generously provided by the hard-working taxpayers of our state.  In many cases a state pension is more generous than the typical retirement benefit of the private-sector workers who fund it.  The purpose of this online calculator is to inform citizens and policymakers about the cost of Washington’s public pension plans and to allow comparisons to be made with public pensions in other states. This calculator is for illustration purposes only and is not designed to show the pension benefits of any particular public employee. For public employees who wish to know their own pension benefit, please visit the Department of Retirement Services.

Washington’s Pension Outlook—$5 Billion in Unfunded Liabilities

Two of Washington’s nine pension plans are already in the red with unfunded liabilities totaling more than $5 billion. This does not include an additional $7 billion in unfunded post-retirement benefit liability, primarily for retiree health care. Unlike pensions, however, these other retirement benefits are not a contractual right, meaning lawmakers could make changes to reduce costs as necessary. These unfunded liabilities have both short- and long-term consequences for taxpayers and are in addition to the state’s current budget problems. Olympia is facing a nearly $1 billion projected budget shortfall for 2013-15, even through tax revenue is expected to grow by $1.5 billion. The current biennial budget is $31 billion.

A significant driver of the budget shortfall is the projected rise in the cost of state pension contributions. The state’s Office of Financial Management estimates that an additional $366 million in pension payments, over and above current projections, will be required in the 2013-15 biennium. These additional pension costs are expected to grow to $721 million by 2015-17.

Policy Recommendation:  Reform the Public Pension System

For future pension benefits, Washington should transition to a defined-contribution plan, similar to a 401(k), for new hires. These plans are now common in the private sector because they provide a retirement benefit for employees while helping companies accurately project future pension costs. The great advantage of defined-contribution plans is they give workers direct ownership of their own retirement money.  Employees in such plans are not forced to rely on political conditions that might change in the future.

Adopting a defined-contribution plan would prevent the unfunded-pension problem from getting worse while lawmakers seek to resolve the $5 billion liability of the state’s two closed plans. Effective pension reform should be based on the following principles:

  • Do not skipped any pension payments
  • Close the current defined benefit plan
  • Direct all savings toward paying down unfunded pension liabilities
  • Enroll new hires into a defined-contribution plan
  • Constitutionally require the actuarially-recommend pension payment and require a supermajority vote to enact new benefits.

Washington’s multibillion-dollar pension problem was not created overnight, so it will take time to eliminate these unfunded liabilities. Starting these reforms will require the conviction to do what is in the best interest of all citizens and workers, not just special interests. If lawmakers fail to adopt effective pension reform in time, Washingtonians may soon face the same pension-debt crisis that threatens state budgets around the country.

Sponsored by the Manhattan Institute's PublicSectorInc.org for Washington Policy Center.