LEOFF Plan 2 board hears legislative update; Senate furlough language, Plan 1 proposals stay under watch

Jacob, a staff member, told the Law Enforcement Officers' and Fire Fighters' Plan 2 Retirement Board on March 26, 2025, that "we're at that point in session where there's, not a lot of activity, as a lot of bills have died at this point," but added that the board's "1 endorsed bill, and and its companion bill, are are both, doing well."

The staff update identified several measures of interest to the board. Jacob said the House version of the board-endorsed bill, House Bill 1349, concerns the purchase of pension service credit for authorized leaves of absence and is now in Senate rules after leaving Senate Ways and Means. He said Senate Bill 5306 — a companion Senate measure — had passed out of House Appropriations and both bills were ahead of the April 8 cutoff.

Jacob also described competing proposals for Lehi Plan 1. He said House Bill 2034 would terminate and restate Plan 1, keeping 20% of the plan's funding in place while returning remaining funds to the state general fund, and would include a benefit improvement for remaining active Plan 1 members contingent on retiring in service; the plan would then close in 2029. He said Senate Bill 5085, a merger proposal discussed in prior meetings, would merge Plan 1s and grant a cost-of-living adjustment to PERS 1 and TERS 1; that bill passed the Senate and had received a hearing in House Appropriations but had not been scheduled for executive action. Jacob added that House Bill 1270, a Department of Retirement Systems (DRS) request bill to allow local employers to use the state's deferred compensation auto-enroll, had passed the House and been advanced in the Senate.

Steve, a staff member, summarized the recently released House and Senate budgets and their potential effect on the agency. "Both budgets do fund the contribution rates adopted by the board," he said, and both budgets include a general wage increase for public employees — 3% in 2025 and 2% in 2026 — and funding for exempt staff salary increases the board adopted. He warned that the Senate proposal offsets the total 5% wage increase "in the form of furloughs," while the House budget did not include furloughs.

On a technical point, Steve said neither budget included a small rent increase the board had requested (about $3,000 in the first fiscal year); he said that omission appeared to be a technical oversight and would be addressed in a supplemental request. When board member Jason asked whether planned fiduciary training and travel would be affected, Steve said the NCPERS annual conference in May and the IFEBP public plan trustee institute in July were expected to be covered, and staff's working assumption was that any travel cuts would apply to staff rather than trustees.

Board members pressed staff on how mandatory furloughs in the Senate proposal would be applied. Steve said the Senate language appeared to target employees by classification (classified WMS and exempt staff) rather than by agency budget, which could include employees working for Lehi Plan 2. He said staff and Karen were "tracking this very closely." Board member Wolf described the Senate approach as "twice as complicated for half the money" compared with the House approach and urged continued monitoring as the session progressed.

On board business, Steve reported that five board members have terms up for reappointment and that most intend to seek reappointment; staff said they have held outreach and expect nominations to move forward. The board set its next meeting for April 16, which staff said would be another session-and-administration update.

Dennis, a staff member handling public comment, said the board had received no written public comments in advance of the meeting and no commenters spoke at the meeting.

A motion to adjourn was made and seconded and the chair called for the vote; recorded comments in the transcript show members saying "aye." The meeting was adjourned.

Less-critical details from the meeting included staff noting the board's small rent request, scheduled fiduciary education events (NCPERS in May and IFEBP in July), and that staff will return with any changes to how furloughs or other budget language would be implemented if the Legislature adopts such provisions.