(The Center Square) A pension advocacy group is threatening a lawsuit if the state Legislature passes a bill to take money from a pension plan, which is projected to be overfunded and closed to new members, to fill in budget gaps.
Meanwhile, the bill sponsors point to analysis done by legal experts that concluded the bill provisions doesn’t undermine obligation to the pensioners.
House Bill 2034 sponsored by House Appropriations Committee Chair Timm Ormsby, D-Spokane, would dissolve the Law Enforcement Officer and Fire Fighter 1 Plan, then reinstate it while funneling surplus funds elsewhere, which includes $569 million to the CCA Account. The bill cleared the House and is now scheduled for a Feb. 26 public hearing in the Senate Committee on Ways & Means.
The LEOFF 1 Coalition has previously told The Center Square it will pursue legal action if HB 2034 is enacted.
“If this bill passes it will give lawmakers gain broader authority to redirect or manage pension assets, it could set a precedent that future legislatures might use in ways that were never envisioned when the plan was created,” LEOFF 1 Coalition Executive Director Joyce Wilms wrote in a statement to The Center Square.
In a phone interview with The Center Square, Wilms questioned what retirement plan the state might pursue next.
“Their duty is to oversee the pension, and the pension funds can only be used for LEOFF members and beneficiaries,” she said. “They made a promise. Do you see them cutting spending? I don’t. They’re not cutting the spending. They keep on spending, and they saw this coming.”
The proposed legislative operating budgets would add $2 billion to overall operating budget spending for 2025-27, representing an 11% increase from the 2023-25 biennium.
Under both budget proposals in the House and Senate, that same amount of money would be spent from the CCA account to fund the Working Families Tax Credit, which provides refundable tax credits between $325 to $1,290 to low- to moderate-income families.
Under a state law, CCA revenue can be spent on the WFTC. Since 2022, over 592,000 refunds of $434 million have been issued.
LEOFF 1 was created in 1969 to consolidate several local pension plans, and then closed to new members in 1977. According to pension advocates, there are only a handful of individuals in that plan that have not yet retired. In total, HB 2034 would take more than $4 billion from the plan, which is projected to be overfunded by that same amount at the end of the biennium.
The Center Square reached out to Ormsby’s office for comment as to the legality of HB 2034 and whether it consulted with the Washington State Attorney General’s Office before introducing the bill. His communications specialist emailed a statement from HB 2034’s cosponsor Rep. Joe Fitzgibbon, D-Seattle stating that they consulted with both Washington Attorney General Nick Brown along with Ice Miller, a Indianapolis-based pension law firm.
The Center Square was also provided copies of the analysis by both the AGO and Ice Miller to the Select Committee on Pension Policy and the Office of the State Actuary, respectively.
The AGO’s analysis concluded that pensioners’ rights is “likely not violated by the termination of the termination and reinstatement proposal” because it “provides the resources necessary to meet present and future pension needs.”
Ice Miller’s analysis stated that HB 2034 “reflects an acceptable restatement of LEOFF Plan 1 into a new plan with a subsequent termination of the existing LEOFF 1 Plan.”
“The guidance we received was that the plan beneficiaries must receive their vested contractual right to a monthly retirement allowance and have the vested contractual right to systematic funding of the pension plan,” Fitzgibbon said in his statement. “HB 2034 respects those rights.”
HB 2034 represents the most recent legislation regarding LEOFF 1, which has been projected to be significantly overfunded. In 2025, Senate Bill 5085 would have merged several closed plans, including LEOFF 1. In 2022, the state Legislature enacted SB 5791, which gave LEOFF 1 pensioners a one-time lump sum benefit equal to $100 per service credit month.
