Sunday, April 21, 2013

Don's editorial in this morning's Spokesman-Review

There has long been confusion about the Law Enforcement Officers’ and Fire Fighters’ Plan 1, especially how it directly relates to Spokane. I would like to take this opportunity to share some facts that are important to know.
First, the LEOFF-1 system was closed Oct. 1, 1977. It was replaced with the current Law Enforcement Officers’ and Fire Fighters’ Plan 2, (LEOFF-2) system. LEOFF-1 has a trust fund that each worker and employer, and the State of Washington paid into. The workers and employers – state and local government – contributed equally, and it was fully funded about 10 years ago. Everyone, including all governments, stopped paying in because the actuaries determined there was enough money to pay for every worker’s retirement until he or she passes away, and still have some left over. There is no tax money going into it now, and there is no expectation any taxpayer money will ever be needed.
When LEOFF-1 was set up to provide for medical coverage, local governments were given a funding source. They had a choice to either use the revenue in their general fund (most of the time, revenue far exceeded expenditures), and promise to pay all current and future bills from that general fund. However, Spokane chose a second option: to put the revenue into a trust fund and separate it from the general fund. Spokane’s medical fund is in the black, and is expected to be fully funded. The city will be able to pay all the expected bills with the funds collected. It is evident that most local governments took in more money than they needed; they just chose to spend it unwisely. LEOFF-1 members do not cost the City of Spokane anything for pension, Social Security or medical. They are the only workers that do not. Once retired, the city will have no obligations for the pensions.
The current LEOFF-2 system differs from the previous system. This fund is also adequately funded, and the actuaries believe no additional tax money will be necessary except the current contribution schedule. It does not have any medical provision and firefighters are responsible for all medical insurance and medical care or negotiates those benefits as part of their compensation. The city does not pay Social Security for firefighters and firefighters do not get Social Security credit. Firefighters pay half of the cost of the pension and the city’s portion is less than if it were paying for Social Security. In 2011, the average retirement benefit for all retired LEOFF-2 was $29,851 per year. The newest retirees – those who have retired within the last one or two years – get a benefit of $39,456 per year.
The other issue brought up in the article was pension-spiking. We are not aware that any has occurred here in Spokane and, importantly, we are adamantly opposed to the practice. It is unethical and abuses the trust of Spokane’s citizens.
I hope these facts reassure you we are ethical and prudent stewards of taxpayer-supported funds.
Don Waller is the president of Spokane Fire Fighter, International Association of Fire Fighters, Local 29

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