The Senate Ways and Means Committee held a public hearing Wednesday on a bill that would combine a public pension plan for certain law enforcement officers and firefighters with a plan for retired teachers.
Senate Bill 6668 merges the assets and liabilities of a police officers and firefighters closed retirement plan, LEOFF 1, with another teachers’ closed retirement plan, TRS 1.
The projected surplus of LEOFF 1 is about $1.2 billion, while TRS 1 is in a deficit of nearly $3 billion.
The proposed pension merger is part of the Senate Republican majority’s supplemental budget plan. Sen. John Braun, R-Centralia, told reporters in February that merging the two plans is more efficient.
“When you put them together, that reduces the net payments to reduce our pension liability and it saves money,” he said. “It saves about $2 billion over ten years in taxpayer money.”
It also allows the state to pay off the TERS 1 plan’s deficit three years early, Braun said.
Police officers and firefighters came out in strong opposition to the proposal Wednesday. They say they are being repaid for years of service by having their retirement fund raided.
“We protected your families every day. Every night, everyone of you, your wives, your husbands, your children were protected by us,”said Bradd Reynolds, a retired police officer drawing on LEOFF 1. “We’d like you to do the same for us.”
The bill also gives LEOFF 1 members a one-time payout of $5,000. Reynolds dismissed that payout.
“Offering me $5,000 to kind of sit in the corner and be quiet just let this pass – I think that’s embarrassing,” he said “I think the general taxpayers across the state would be upset if they thought that police officers and firefighters are going to get a payoff to be quiet and let a bill pass off into the night.”
Gail Hall, the spouse of a retired firefighter, said that the state is stealing from the fund. She said that teachers have a different job responsibilities, so their retirement plan should be separate.
“If anybody’s pension funding should be raided, it should be the Legislature’s pension funding because they are the ones who have got the teachers in this mess,” she said.
Joyce Williams represents people drawing paychecks from the LEOFF 1 pension fund. She said she has heard from elderly retirees calling her everyday worried that something might happen to their pension.
“These people are depending on their pension and a promise made should be a promise kept,” she said.
Matthew Jackmond was a firefighter for 32 years. He is drawing from a different LEOFF retirement plan, but he said that this is an attempt by the Legislature to “do another end-run at the eleventh hour.”
“We LEOFF members have fought long and hard to keep our pensions systems fully funded and repeal the constant attracts by the Legislature – attacks meant to fix your lack of ability to fund your projects,” Jackmond said.
No one spoke in support of the bill, but Sen. Bruce Dammeier, R- Puyallup, asked the committee staff what would happen to the merged pension plans if there was a financial collapse.
Staff said that retirees “do not bear the risk of loss” and the state is constitutionally obligated to make the payments. The plan’s sponsor, the state of Washington, bears the risk of loss in the investments, according to staff.