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Published on Friday, January 6, 2017

Studies conclude pension mergers possible

During the 2016 session, the Senate considered a bill to merge the LEOFF 1 (Law Enforcement Officers’ and Fire Fighters’) and TRS 1 (Teachers’ Retirement System) pensions systems. While the bill did not advance, the final budget directed the Select Committee on Pension Policy (SCPP) to study a possible LEOFF 1 and TRS 1 merger and to update a 2011 study on a potential LEOFF 1 and LEOFF 2 systems merger.

Both studies were released last month. The reports make no recommendations, but both conclude that it would be possible to merge the LEOFF 1 system with either the TRS 1 or LEOFF 2 systems in a way that should withstand legal challenge and be approved by the Internal Revenue Service. LEOFF 1 retiree groups have said they will challenge any proposed merger in court. Any merger would also be subject to IRS approval, which would take a minimum of six months.

AWC has not taken a position on merging pensions systems. However, AWC has developed a list of policy issues cities would need addressed should a merger be proposed. One of those policy positions is that should a merger occur that would withdraw any of the surplus funds out of LEOFF 1, then cities should get a proportionate share of those surplus funds to help offset our medical benefit cost obligations for LEOFF 1 retirees.

At this time no formal merger proposals have been released. AWC will continue to monitor this process closely.

The LEOFF Plan 1 and TRS Plan 1 Merger Study is available here.

The updated LEOFF 1/LEOFF 2 Merger Study is available here.

Categories: Personnel