Editor’s Note: WACOPS is essentially a lobbying organization that represents most of the Police Officers and Deputy Sheriffs in the state. COMPAS and FOP are similar and represents officers from Seattle, King County and some small jurisdictions. I post this information so that you will have a clear understanding of the concerns of our LEOFF 2 brothers and sisters.
Since March 12, we have been sending you regular updates regarding two emerging LEOFF 2 Pension issues. Anytime issues are before the Legislature they are dynamic and evolve quickly. These issues are no different. As a member of WACOPS I hope you will trust us as your best source of accurate information on these and other legislative matters.
In the last month we have learned of two ideas that are developing. One is a plan to replace the current budget-dependent benefit improvement account methodology with a predictable and measurable alternative. The other is a discussion coming from the Senate to merge the LEOFF 1 plan with LEOFF 2.
LEOFF 1 and LEOFF 2 Merger — DEAD
On March 14, Senator Van De Wege held a meeting of the LEOFF 1 and LEOFF 2 stakeholders to discuss the concept of a merger. As you know WACOPS and the WSCFF sent a letter earlier this month expressing concern that the concept violates several of the Merger Principles adopted by both organizations in 2016.
A second meeting was held last Friday, March 22 with almost no movement on the part of any of the parties. The Employers seemed most inflexible, and for good reason. The proposal gave them no holiday, and it raised their contribution significantly in the coming years. The only real change to the original proposal was to write a larger check to each of the LEOFF 1 retirees ($20,000). LEOFF 2 had little to gain and much to lose. In fact, of the 10 merger principles the only ones violated by the proposal were the principles related to LEOFF 2.
Yesterday, Senator Van De Wege sent an email to all the stakeholders informing them that he has pulled the idea and a merger will not move forward this year.
Benefit Improvement Account (BIA) – HB2144 and SB5983
In Washington there are three law enforcement advocacy groups that have LEOFF 2 members. At almost 4,500 members we are the largest law enforcement labor advocacy group and we represent, by far, the largest number of LEOFF 2 members. The second largest LEOFF 2 representative is the Council of Metropolitan Police and Sheriffs (COMPAS). Like WACOPS, their membership is exclusively LEOFF and they have about 2,000 members.
Both WACOPS and COMPAS regularly attend LEOFF 2 Board meetings and our members are regularly briefed by the LEOFF 2 staff on matters related to the pension system. LEOFF 2 issues are not an afterthought or something we only consider during session. You’ve told us your pension is a priority and we take that seriously.
As you know, each year the WACOPS members identify the organization’s legislative priorities. Since the passage of the BIA in 2008, it has been a priority of WACOPS to see the account funded. It’s a priority for you because you remain committed to the goal; creating a down payment for a future benefit improvement.
Now, more than 10 years since its passage, the BIA is unfunded, is a growing liability for the State, is not fought for by the local jurisdictions, and has been beyond the collective lobbying power of LEOFF stakeholders. The question now is, what to do?
After being approached with the idea of a significant transfer of LEOFF surplus to the BIA the WACOPS Government Relations Committee was supportive. GRC Chair, Darell Stidham, took the idea to the WACOPS Board of Directors and it was agreed this is a reasonable solution to the problem. The goal is a benefit improvement in the future. The method is to have a protected account with reserved dollars to become a BI or to serve as a down payment for one. The means to get there was the system set in place in 2008. The members have repeatedly said they want to see progress toward a benefit improvement. The method remains a good one, but the means to get there has not worked as anticipated. We think 2144 or 5983 is a mutually beneficial resolution, makes significant forward progress toward a BI, and is the proper means to this goal at this time.
We have received some questions about this issue and some of you may be getting information from unreliable sources, so I’ve listed some questions and answers below:
LEOFF 2 Benefit Improvement Account Q & A
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1)What is the current law and how will this proposal affect it?
A: Follow this link to watch an excellent, brief, explanation of the current law and how HB2144 changes it. This link is of David Pringle Non-Partisan House Committee staff:
2)Why was the 2008 Legislation passed to create a BIA?
A: Watch this short video of testimony before the Senate Ways and Means Committee on SB5983. https://www.tvw.org/watch/?clientID=9375922947&eventID=2019031183☆tStreamAt=2891&stopStreamAt=2981&autoStartStream=true
3)Why are LEOFF 2 pensioners different than other pensioners in our state?
4) If we agree to this, aren’t we letting the Legislature “off the hook”?
A: In a way, yes. However, after a decade of considerable lobbying effort by the largest LEOFF stakeholders (WSCFF and WACOPS) the “hook” hasn’t set. Only one payment has ever been made to the account and it was for the 2013-2015 Biennium. The legislature authorized a $16 million transfer from the LEOFF 2 surplus. The state has never made a single contribution from the general fund.
5) Since the law mandates the Legislature authorize the contribution, can’t we sue them?
A: Yes. You, the LEOFF 2 pensioners, could sue the State. If you wish to launch a suit, the statutory deadline for the oldest missed payment will be up in the coming year. Litigation would need to begin very soon.
6) If a lawsuit is filed, will the LEOFF 2 Pension System pay for the suit?
A: No. Such a suit would need to be funded by the pensioners themselves. We do not know how those funds would be collected.
7) What are the risks for suing the State?
A: There are several. Litigation will be complicated and expensive. The case would not move quickly and would likely drag out for years. During that time, the Legislature could easily repeal the current law and stop its future liability and our future BIA funding. The consequences of filing (win or lose) will work against us, probably for years, making our work to protect and improve your pension more difficult.
8) Isn’t this “robbing Peter to pay Paul”?
A: No. In this case the surplus is more like a bank account with a balance beyond what is needed to pay for current liabilities. Consider the transfer similar to an investment decision you might make to move funds from your checking account (where you pay out your liabilities) into a savings account or even more so, into a long-term investment account.
9) Will transferring money from the surplus to the protected BIA put the fund at risk?
A: No. LEOFF 2 is the best funded, open, public pension system in the Country and is currently more than fully funded at 109%. According to the State Actuary, the fund will continue to be more than fully funded after the transfer at approximately 106%.
10) Has there ever been a time that LEOFF 2 has been less than 100% funded?
A: No. Even in the worst of the economic recession, LEOFF 2 remained fully funded.
11) Is there any risk by leaving the money in the regular LEOFF 2 account?
A: Yes. The fund currently has a funded rate of 109%. Contributors to that fund, the state and the employers, may see those funds as a source of revenue or a source of future liability savings/offset. Either scenario could put those dollars at risk to be swept or used as an offset to a contribution holiday.
12) Is there any risk to putting this off another year or longer?
A: Yes. A negotiating position is strengthened when both parties have something to gain by the outcome. We believe the timing is right and we should push for this solution now and resolve this decade-long standoff between the State and the LEOFF 2 pensioners.
As more questions come up, we will answer them and push them out to you. This is a complex issue. Please get your facts from WACOPS. We don’t divide our time or attention among other pension systems. Our members are LEOFF 2 members and we make the LEOFF 2 system our priority.
Your best source for answers to your concerns or questions is with WACOPS. Please contact us directly. You can reach me at 360-352-8224 or any member of the WACOPS Executive Board at: www.wacops.org/executive-board-staff.
Be safe out there.