E2SHB 2034
SignedHouse
LEOFF 1 restatement
Concerning termination and restatement of plan 1 of the law enforcement officers' and firefighters' retirement system.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill terminates Washington's LEOFF Plan 1, which has been closed to new members for 25 years and has a $3.3 billion surplus, and establishes a restated version to continue existing benefits. The state will retain surplus assets after ensuring full funding of obligations, and active members who retire early receive a $25,000 bonus and extra service credit.
- Terminates LEOFF Plan 1 effective June 30, 2029, and establishes a new restated LEOFF Plan 1 to continue existing benefits without interruption.
- Transfers 120% of the actuarial present value of LEOFF Plan 1 benefits to a new restated fund; remaining assets go to the pension funding stabilization account.
- Provides a one-time $25,000 lump sum and five additional years of service credit to active members who elect to retire by January 1, 2026.
- Maintains all existing benefit structures—including service retirement, disability, and survivor benefits—with no changes to benefit amounts for members and beneficiaries.
- Requires the state to ensure federal tax compliance during the transition and allows for legislative amendments to meet federal requirements without diminishing member benefits.
Who is affected
- LEOFF Plan 1 active members — Active members who elect to enter annuitant status by January 1, 2026, receive five additional years of service credit and a $25,000 lump sum benefit to facilitate transition.
- LEOFF Plan 1 retirees and survivor beneficiaries — Retirees and survivor beneficiaries continue to receive their existing benefits without interruption during the transition period, with no change to benefit amounts.
- Local governments and employers — Local governments and other employers continue to be responsible for medical benefits for active and retired members under section 327, and may continue to levy property taxes for this purpose.
- State of Washington — The state retains surplus assets from the terminated plan after ensuring full funding of promised benefits, and transfers the required amount to the new restated plan fund.
- Surviving spouses and children of deceased members — Surviving spouses and children of members who die in the line of duty continue to receive death benefits under the same terms as before the restatement.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (3)
Active members who elect to retire by January 1, 2026, receive a $25,000 lump sum and five additional years of service credit, significantly improving their retirement security and financial stability in retirement.
FinancialPeopleRef: Sec. 108The restated plan explicitly preserves all existing benefit structures—including service retirement, disability, and survivor benefits—with no changes to benefit amounts, ensuring constitutional contractual rights to retirement benefits are maintained without diminishment.
Rights & LibertiesPeopleRef: Sec. 103The bill transfers 120% of the actuarial present value of LEOFF Plan 1 benefits to the new restated fund, providing strong actuarial certainty and reducing long-term funding risk for retirees and beneficiaries.
FinancialPeopleRef: Sec. 104(1)
Potential Concerns (3)
The state will retain over $3.3 billion in surplus assets after ensuring full funding of LEOFF Plan 1 obligations. While this improves the state's fiscal position, it reduces future public investment capacity and could lead to service reductions or tax increases to compensate.
FinancialRef: Sec. 104(2)Local governments must continue to fund medical benefits for active and retired members under section 327, potentially straining municipal budgets, especially in smaller jurisdictions with limited tax capacity.
Local GovernmentRef: Sec. 104(2)The bill terminates LEOFF Plan 1, which has been closed to new members for 25 years and now has only four active members. This creates administrative complexity during the transition and risks confusion or errors in benefit administration during the multi-year transition period.
Public SafetyRef: Sec. 108
Who Is Most Affected
Active members who elect to retire by January 1, 2026, receive a $25,000 lump sum and five additional years of service credit, significantly improving their retirement security and financial stability in retirement.
Retirees and survivor beneficiaries continue to receive their existing benefits without interruption during the transition period, with no change to benefit amounts, preserving their constitutional contractual rights.
Local governments and employers continue to be responsible for medical benefits for active and retired members and may continue to levy property taxes for this purpose, maintaining current funding mechanisms but without new financial relief.
The state retains surplus assets from the terminated plan after ensuring full funding of promised benefits, improving the state's fiscal position but potentially reducing future public investment capacity.
Surviving spouses and children of deceased members continue to receive death benefits under the same terms as before the restatement, preserving their financial security.