Jacob White, staff to the LEOFF Plan 2 board, told the Select Committee on Pension Policy about the board’s interim work and items that may overlap with the committee’s agenda.
The update matters because the LEOFF Plan 2 board’s policy work can intersect with broader pension policy and potential legislation affecting employer contributions, benefit calculations and survivor protections.
White said the board was created by initiative in 2002 and carries fiduciary responsibility for LEOFF Plan 2. He described the board’s duties: adopt actuarial standards, study additional benefit issues, oversee the plan’s funding and set contribution rates. He said the board serves roughly 19,000 active members, more than 8,000 retirees and about 393 employers.
White identified four topics the board is studying that could interest the Select Committee. First is a briefing on pension spiking tied to overtime after a Seattle Times article about overtime and benefit calculations; White said the board will look at the issue from a LEOFF 2 perspective and coordinate with the Department of Retirement Systems and actuaries on data and potential issues.
Second, the board is examining catastrophic disability survivor-benefit options and is working with DRS on potential policy and rule changes to address how offsets (for example, workers’ compensation) affect survivor benefits and required reductions.
Third, the board will study so-called career-choice or return-to-work employer contributions: when a LEOFF 2 retiree returns to public employment in another system (for example, PERS), White said some employers currently need not pay contributions to the new system. The requested study will ask whether employers should instead contribute to a 457 deferred-compensation account on the employee’s behalf.
Fourth, the board will review the 2022 DRS rule change lowering the interest rate credited to member accounts (from a historic 5.5% to 2.5%) and whether that policy goal and legal treatment apply across systems.
White said the board’s current funded ratio is about 104 percent. He told the committee he will provide executive-committee updates to the Select Committee when issues overlap.
No formal committee action was taken; the presentation was informational.