April 25th 2024
Heard on the Hill
LEOFF
1 Surplus?
Fact or Fiction?
Technically speaking the LEOFF 1 pension system valuation is $ 5 billion dollars. What has NOT been said is, this is an actuarial valuation which has nothing to do with the reality of the day.
- First of all, this "surplus" figure of over a billion dollars comes from the 2001 Combined Actuarial Valuation of Dec.2002. This means that the figure being tossed around is 16 months old!
-
This "surplus" is
based on actuarial assumptions that are in statute . .
.
Remember those-saying that the rate of return will be 8% etc. The LEOFF 1 system has suffered losses for the past few years and that is why the state went to four year averaging instead of three.
Assuming that the future experience of the plan meets ballpark assumptions, (and ignoring the difference between market and actuarial value of assets). In our humble opinion - we made a pie in the sky assumption about rate of return and if it ever happens again there will be a surplus. Right now the MARKET VALUE OF THE LEOFF 1 FUND IS JUST OVER FOUR BILLION AND THERE IS A DEFECT - The assets in the LEOFF 1 portion of the CTF fund is no where near the value stated in a recent letter published by the LEOFF 1.net web site.
The claim that there is over a "billion dollar surplus" in the current LEOFF 1 Retirement system is just not so!