LEOFF Plan 2 board adopts updated economic and demographic assumptions

The Law Enforcement Officers' and Fire Fighters' Plan 2 Retirement Board on Dec. 17 adopted recommended changes to both long‑term economic and demographic assumptions that will be used in the next actuarial valuation.

Jacob White, staff to the board, said the recommended economic changes include raising the inflation assumption from 2.75% to 3.0% and small upward adjustments to salary‑growth and expected investment returns. White told the board the actuaries project the economic assumption change alone would change funded status by about 1.7 percentage points.

Earlier in the meeting, a Milliman reviewer who audited the Office of the State Actuary's demographic experience study said the demographic assumptions — chief among them a move to PUB‑2016 mortality tables with adjustments for public‑safety populations and updates to retirement‑rate assumptions — were “reasonable and appropriate for use in the valuation.” Milliman noted that pandemic‑period experience and the post‑SHB retirement pattern required professional judgment and ongoing monitoring.

The board moved to adopt the economic assumptions and then the demographic assumptions; both motions were seconded and approved by voice vote. Staff will use the adopted assumptions in the upcoming actuarial valuation and continue to monitor retirement and mortality experience for signs that assumptions should be revisited between scheduled study periods.

The State Auditor's Office also presented a separate FY2025 schedule audit earlier in the meeting and reported an unmodified (clean) opinion on the board's schedule, a result the auditor said provides assurance that the schedule is stated fairly and materially correct.

Next steps include final actuarial valuations using the newly adopted assumptions and routine monitoring by staff and the Office of the State Actuary to determine whether off‑cycle changes are warranted if experience departs persistently from assumptions.