The Select Committee on Pension Policy voted to adopt a package of economic assumptions recommended by the Office of State Actuary (OSA). Matt Smith, state actuary, introduced the recommendation and emphasized that assumptions are long-term averages used for funding and not short-term forecasts. Frank Serra (OSA) walked the committee through the supporting analysis.

Key recommendation elements the committee adopted: inflation (Seattle–Tacoma–Bellevue regional) 3.0 percent, up 25 basis points from the previous assumption; general salary growth 3.5 percent, up 25 basis points; membership growth left unchanged at 1.0 percent for the population relevant to PERS 1 funding; and an investment rate of return of 7.25 percent for all plans (no change from the statutory rate enacted earlier in the legislative session for most plans).

Matt Smith and Frank Serra explained that inflation modeling used a national baseline plus a regional differential historically observed for the Seattle–Tacoma–Bellevue area; OSA set the recommendation at 3 percent to reflect a national long‑term forecast plus a modest regional premium. Frank Serra noted the regional inflation premium has averaged about 0.3–0.7 percentage points in historical analyses.

The committee discussed timing and budget impacts. OSA staff said the assumption changes would affect contribution rates and budgets beginning in the 2027–29 biennium, not the current enacted biennium. OSA estimated the net impact relative to current law (excluding a prior statutory change to the assumed rate of return) as roughly $450 million in additional total-employer contributions in 2027–29 and about $456 million in 2029–31, split between state general fund and local governments depending on the plans affected.

The committee acted on the recommendations by roll-call votes. For inflation (3.0 percent) the committee recorded 14 ayes, 1 nay and 2 other (absent/excused), and the motion carried. The general salary growth assumption (3.5 percent) was adopted by roll call with 14 ayes, 1 nay and 2 other. Membership growth at 1 percent was approved (15 ayes, 2 excused). The investment return assumption of 7.25 percent for all plans was approved (14 ayes, 1 nay, 2 excused).

Committee discussion repeatedly returned to the notion that assumptions are professional judgments subject to uncertainty; OSA staff said they would update any fiscal notes or projections if PFC or the legislature adopts different assumptions in coming weeks. The Pension Funding Council was noted to be scheduled to meet October 8, when it could act on assumptions under the statutory timeline.