Olympia City Council member raises concerns over potential sweeping of LEOFF pension funds 

At the Tuesday, Jan. 14, Olympia City Council meeting, Council member Jim Cooper voiced concerns over a proposal to sweep surplus funds from the Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) to help balance the state's budget. 

Cooper reported that the proposed 2025-27 state budget includes a plan to transfer $1 billion from the LEOFF 1 pension fund to the state's general fund. He pointed out that cities and counties are mandated to provide lifetime health care coverage for LEOFF 1 retirees.  

Olympia is home to about 75 LEOFF 1 retirees. Cooper said the city must take care of those retirees for the rest of their lives.

"Sweeping these pension funds could have a major impact on our ability to fulfill that mandate," Cooper said.

The councilman also noted that a separate bill, Senate Bill 5085, proposes using LEOFF and other pension fund surpluses to address shortfalls in the state's teacher and public employee retirement systems.

However, he expressed skepticism that this would be legally permissible. 

"Firefighters and other public sector workers will never let that happen," Cooper said. "These funds have been invested and set aside for specific purposes." 

The city council plans to draft a letter urging state lawmakers to consider the implications for local governments before tapping into LEOFF pension reserves.

"If you consider any sweeping of these LEOFF 1 pension funds, you need to consider the cities, counties and fire districts, who don't have a unified lobbying group to come and ask you to help fund the medical mandate they have for those members," Cooper said.

The LEOFF system provides retirement benefits to first responders who risk their lives protecting communities.  

The state budget proposal from former Gov. Jay Inslee calls for sweeping surplus funds from the state's LEOFF pension system to help balance the state's budget.  

According to the Washington State Office of Financial Management, LEOFF Plan 1 has an estimated $2 billion surplus, while LEOFF Plan 2 is fully funded.  

Under the governor's proposal, the funding for LEOFF Plan 1 and LEOFF Plan 2 would be combined into a single pool dedicated to paying member benefits.

While the plans would remain separate, the proposal leaves a $1 billion buffer in the LEOFF system, while also allowing for $1 billion previously contributed by the state to the LEOFF Plan 1 system to be returned for general state purposes. 

"This approach ensures fairness for all retirees, maintains safeguards that prevent sudden cost spikes, and responsibly manages these plans," stated the OFM.