Senate adopts overhaul of Lehi 1 pension plan, frees surplus for other uses

The Senate on the floor adopted Engrossed Second Substitute House Bill 2,034, a measure that will terminate and reconstitute the Lehi 1 pension plan and allow limited use of excess plan funding for other state needs after review and amendment.

Senator Robinson, who led floor action, said the bill had been “studied and analyzed” by attorneys, actuaries, the State Investment Board and the Department of Retirement Systems and characterized the plan as “actuarially sound” and likely to secure IRS approval. He asked colleagues to advance the bill to third reading and final passage.

Opponents pressed for stronger protections for members and local governments. Senator Gildan proposed increasing the funding floor from 110% to 120% of actuarial value, arguing the higher target would provide “a little more padding, a little more cushion” for retirees; that amendment failed after Robinson urged a no, saying actuaries and attorneys found 110% sufficient.

Senator Holy proposed a different approach, urging a lump-sum distribution that he described as proportional to members’ contributions and walking the chamber through numeric examples. Holy said “Lehi 1 fund is right about $6,000,000,000” and sketched member-share math to argue members had contributed a meaningful portion of the fund. The chamber rejected that amendment as well.

Other failed proposals included an attempt by Senator King to transfer $1,000,000,000 of surplus to transportation and an amendment from Senator Harris to move $750,000,000 into the Budget Stabilization Account. One amendment the Senate did adopt removed language that would have repaid funds to the Climate Commitment Act.

Lawmakers also debated legal and long-term fiscal risks. Senator Holy read from a 1956 attorney-general opinion (citing Baukenhaus v. Seattle) to underline the view that pension benefits are contractual and cannot be reduced without exposure to lawsuits. Opponents warned that using surplus for one-time spending could create future liabilities if market returns deteriorate.

After extended debate and roll call, the clerk reported vote totals as read on the floor and the presiding officer declared Engrossed Second Substitute House Bill 2,034, as amended, passed. The bill was advanced to final passage and the title will be the title of the act.

The measure’s next procedural steps are to complete any remaining technical processing and be transmitted as required by Senate rules; several senators noted the bill’s disposition may be revisited in conference or future sessions.