SB 6668 – Why Merge?

On February 24, 2016 SB 6668 was introduced. It seems a simple proposition designed to mend a serious unfunded liability in the Teachers Retirement System Plan 1 (TRS 1). That system has a significant deficit and is funded only at the level of 69%.

The bill proposed to take all of the money out of the Law Enforcement and Fire Fighters Pension Plan 1 (LEOFF 1) and put it into TRS 1. LEOFF 1 would cease to exist except as a subset of the TRS 1 statute. Wow! That lowers the unfunded liability of the TRS 1 system to a funding level of 87% even counting those 8,000 LEOFF 1 folks who were put into the TRS 1 system. Of course, those LEOFF 1 folks went from being 127% funded to being 87% funded.

But, no worry – the legislators promise the LEOFF 1 folks that there will be no change in benefits and that all pension obligations will be paid. Everything will be exactly the same except you just won’t have any money to insure that. Rather you will have the promise of our legislators.

But wait – there’s more! Just to show the LEOFF 1 folks that they are acting in good faith the legislators will give each LEOFF 1 member $5,000 on September 1st.

So, TRS 1 is fixed and LEOFF 1 has the promise. Why isn’t everybody happy?

Well, the whole thing is built on a lie, so there is little substance upon which to build the trust to believe the promise. TRS 1 has already been fixed. The employer contribution rate had been changed to provide the necessary money to fully fund TRS 1 by 2027. The legislators promised the teachers they would fix the underfunded pension and they did. So now that promise is thrown out and a new promise takes it place. The new promise is we will take the money from a different pension system so that the employers will not have to pay the new pension contribution rates.

The real reason is pretty easy to figure out – it is a money grab. It is abundantly clear if you read the bill and the Fiscal Note for the bill. First, the state is the biggest employer for the teachers. Second much of the non-state employer contributions come from the state as a pass through. So, if you lower the contribution rates for the employers you get to keep that money and not have to pay it into the TRS 1 pension plan. You can do anything you want with that money.

And, it is a lot of money. By dropping the rate to 4.24% they get to keep $75 million at the state level alone between September and January 1st Next year and each year thereafter they get to keep $200 million. Of the project period of the bill the state gets to keep $1.5 billion. That’s right – billion. Throw in the local jurisdictions and it is over $2 billion.

But we are promised that everything will be fine. Just like the teachers were promised that TRS 1 would be funded. Oh, that promise was not kept. Well, they promised to fund LEOFF 1 too – then they did not fund it for the first five years.

Pensions run for a very long time – longer that legislators stay in office. So even those genuine promises cannot and will not be kept because different legislators with different challenges will have to try to keep them. They won’t because they did not make them and because they have other priorities.

This bill is about money. It is about money right now. That is why it is on the fast track for passage. That is why it is a budget bill. If it were just a pension bill we would have hearings and time to try to find alternate solutions. But it is a money bill and the legislature is set to adjourn in a couple of weeks. There is little time to act.

Right now please go to and find your representative and send him/her an email. Call the legislative hotline – (800) 562-6000 – and ask they oppose this bill.

Contact every LEOFF 1 person you know and make sure they are subscribed to LEOFF1.Net.

There are a lot of folks out there who are not in touch. We need to reach out and help each of them to express their opposition to SB 6668. If you do something right now to expand the number of contacts, we might have a chance. Think about what 7,000 phone call to the hotline would do for our cause.

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