OLYMPIA, WA – The Washington State House has passed a bill that terminates the Law Enforcement Officers’ and Firefighters’ Retirement System Plan 1, creates a new plan, and transfers $4.5 billion out of that plan.

The fiscal policy decision drew strong rebuke from House Republicans, while pension plan advocates warn of future implications for other state pension plans.

House Bill 2034 sponsored by House Appropriations Committee Chair Timm Ormsby, D-Spokane, managed to reach the Rules Committee during the 2025 legislative session, but did not clear the chamber. Reintroduced this year, it was advanced out of Appropriations without a public hearing and passed the House in a 55-39 vote.

LEOFF 1 was created in the late 1960s for law enforcement and firefighters, but then closed to new members in 1977. While the overall system was projected to be fully funded by this year, LEOFF 1 has more than 100% projected funding to meet its obligations to pensioners.

However, pension analysts warned that some policy decisions, such as an overly optimistic assumed rate of growth for investments made by the State Investment Board, could undermine the health of the system if those projections don’t pan out. The assumed rate of return determines how much the state Legislature as well as public employees contribute to their respective plans.

Rep. Joe Fitzgibbon, D-Seattle, told colleagues on the House floor prior to the Feb. 13 vote that the LEOFF 1 is well funded.

“Is in a very healthy financial state,” he said. “We are very fortunate for that.”

He added that retirees will get what was promised.

“Every nickel now of benefits owed to LEOFF 1 members will be paid,” he said. “We guarantee that in this bill and we actually leave an extra buffer to make sure that if something unforeseeable happens, that there is a reserve ready to pay all of the benefits.”

However, Rep. John Ley, R-Vancouver, said “I am wondering if this is another pie crust promise,” in reference to recent remarks made by Sen. Jamie Pedersen, D-Spokane, regarding the state Legislature adoption of a voter initiative banning state and local income tax, only to introduce an income tax on millionaires this year.

“A promise made, but a promise easily broken,” Ley said. “If we do this, how many more times might a future legislature come and raid this fund? If this were a private corporation, we’d be screaming bloody murder.”

When The Center Square reached out to the LEOFF 1 Coalition for comment on HB 2034, Executive Director Joyce Willms said the bill violates both the state and U.S. Constitution, but also will open the door to permit future changes to other state pension plans. Her organization argues that the bill goes against the Internal Revenue Service Code, in which LEOFF 1 operates as a qualified governmental retirement trust and thus can only be used for members or beneficiaries.

Several other House Republicans weighed in against HB 2034 prior to the Feb. 13 vote, including Rep. Matt Marshall, R-Eatonville, who said the money is being diverted despite large tax increases.

“What the public is going to see is not that money is being shifted to balance the budget,” he said. “They’re going see the money’s being used in so many ways on so many unsustainable programs that we’ve forced ourselves into a hole – a year after we have record increases in taxes. We’re immediately coming back and asking our retirees to shoulder a massive, massive shift of their funds to balance the budget.

“This pensioner’s money should not be touched, not for any reason,” he added. “When there’s no more beneficiaries, then we’ll talk about where to put it into other pensions, but it should be off limits.”

With the Washington state pension system considered one of the best funded in the nation, Rep. Jim Walsh, R-Aberdeen, said proposals made in the past similar to HB 2034 may have discussed, but were never seriously considered.

“The conventional wisdom was raiding LEOFF 1 was a third rail proposition,” he said. “Our fiscal rectitude in this state is something that distinguishes us from our neighbors to the south and  other well populated states. We have been careful where they have  been reckless.”