May 21st 2024

LEOFF I Coalition Newsletter: 2/20/03

By Mark Curtis

We thought we would try to create a newsletter of the things that may be of value from a few prior Executive Board meeting minutes, and continue to do so as time permits, and goes by.

We have received word that the Governor announced that his party wants to allow the state pensions to invest pension funds in new State start up companies ,to stimulate the state economy. The concept is unnerving, knowing that 7 of 10 start up companies are thought to tend to fail. We are aware that the State Investment Board has the legislated right to decide our investments. They have a Board that includes pension people for input, but no LEOFF 1 people. That Board is a part of the system affected by the Governor. We already lost a huge amount of the Commingled Trust Fund of all systems. Our system of plan 1 should not take another big hit.

Retiring State Sen. Hochstatter recently spoke on the Carlson radio talk show. He expressed his view that the LEOFF 1 surplus was a well earned thing for the legislature. But, State Treasurer Mike Murphy called to the show and disputed that purpose for those surplus funds. Murphy sees those funds as intended for the pensioners,not to be stolen. Those are important and big powerful words.

The Assoc, of Wash. Cities will be introducing a bill to control the LEOFF 1 surplus, over a buffer of $300 million. The purpose would be to let the Cities and Towns to be relieved of their unfunded liabilities of lawful responsibilities to pay the medical and long term care costs for plan 1 pensioners and actives. This is really what the State tried to raid several years ago. As before, the LEOFF 1 Coalition will oppose this bill. We have not yet seen their Cities bill.

The AWC also supports SB 5099, a governance of pensions, and sees it as advisory only to the legislature. It would weight to employers and known as the “Select Committee On Pension Policy”. The concept seems too similar to what already exists that has not been good for us. A difference is that this Board would have participation of some pensioners and active public service people. Who would serve is unknown among all the systems included. Inclusion of a LEOFF 1 person does not seem likely. The Coalition opposes this bill to include us in this group for defined benefit systems, as the word never appeared in our law at inception. Our view is that we are not a “defined benefit”, and should be a stand alone pension system to protect our system.

Another AWC, Assoc. of County Officials, and also the Wash. State Assoc. of Counties propose a joint legislative change in State Interest Arbitration on law. The changes would mandate arbitrators use the implicit price deflator for cost of living adjustments and amend the binding interest arbitration statutes to require arbitrators to consider a jurisdiction’s ability to pay, and eliminate comparables outside the State for all interest arbitration. If successful, the employers would be gutting our important lawful benefit of a COLA..

Adding up the above comments does tend to lead to the conclusion that the State and employers have some connection to team play and go after the big money to save the next 2 years budget from very tough decisions. The entire Commingled Trust Fund of most Pension systems is potentially at risk from raiding. We are staring at a well planned attack on us.

The State Investment Board announced at a Pension Funding Council meeting that the LEOFF 1 surplus was just barely fully funded. Contributions were put on holiday and our principle diminished, plus the 8% Assumption rate created up from 71/2 %, occurred just before a major economic downturn. We had $1.3 Billion at that juncture. The State uses old figures to report experience and surplus. Few know the actual guestimate of surplus, if any. We do know that the Commingled Trust Fund tumbled from a high of $42 Billion TO $37 Billion . The State Actuary retired and a Mathew M. Smith is the replacement.

Our own Bob Allen cautioned us about an Investment Board consideration to buy out a KKR broker firm and become a broker at quite some risk. We evaluated that and opposed the move via letter concerning KKR firm. The State since declined to do the buy out. That particular Board has authority to invest for us, does so by board, and is not required to respond to us nor take our suggestion. Why they decided on caution is unknown, but appreciated.

We congratulated Whatcom Co. Sheriff Dale Brandlan with his election as State of Wash. Senator to Olympia. He is LEOFF 1 ! Also, we endorsed the LEOFF 2 Initiative that passed into law, a good thing

The Coalition attended a Disability Board meeting in Shelton, WA., TO OBSERVE. It was learned that their new proposed “policies” are a copy of an AWC influenced Olympia City set of policies for a board. An effort to learn how widely this effort to influence all boards did not materialize. We would ask plan 1 people to pay attention to any move afoot to restrict your traditional benefits, resist, and notify the Coalition.

An Annual Report to all known LEOFF 1 people has been readied and likely will be printed and mailed prior to this newsletter printed on our web site.

An effort is in progress in Eastern Wash, seeking interest in forming a new group of those nonaffiliated as yet in a standing group already a member of the LEOFF 1 Coalition. An organizational meeting is being explored to occur in the greater Yakima area. The concept is for an Eastern area to gain larger input into the Coalition. Any help we can get in this long legislative session will be appreciated.

Fundraising is always necessary, given the unknown raid or attacks we may be facing to protect our benefits. Several Everett retired Firefighters offered an unusual addition to their already generous contributions. Rich (and Mrs. Greenshield) , and Dennis Somerville had considerable need to utilize the crude and doorless out house of fellow LEOFF 1 recreational area neighbors of Jim & Mike Perin, and Mark Curtis. The folks installed a “can” can on the wall, and deposited a total of $1.69 in four months. The US coinage was to be used for either a better ply of TP, or to donate to the LEOFF 1 savings account. They accessed the old biffy via a ladder they hauled over to the highrise john. Evidence was found of the ladder in the mud, plus, a little birdie gave a hint our way. The quarters were for $.25 cents per visit, but some pennies were deposited. To end this potty talk, we understand the outhouse will be soon demolished. But, the new contributions are appreciated. Firemen and their ladders, cops and their donuts, legislators and their hands in the money pot, all mix to describe a strange fiction of story. Greenshield and Sommerville went on to build their own $3000 outhouse, where Rich’s wife is more willing to visit and be less chagrined, ( noted by Ron Larsen.) This story screamed to be told, and now, is.

As of 12/12/02 Executive Board meeting, our financial health is;

Checking is $32,525.12
CD #1 is $41,584.83
CD #2 is $41,414.57
CD#3 is $41,123.73
Total Assets are $156,700.33

And now $1.69 more into the savings of $52.02 first started by Liz Day.