Why It Matters
Washington’s decision to redirect billions from a police and firefighter retirement account could set a precedent affecting public pension security across the Pacific Northwest. The legal challenge threatens to derail the state’s budget plan while raising questions about the sanctity of government pension promises.
Former Congressman Dave Reichert leads the lawsuit challenging legislation that would transfer nearly $4 billion from an overfunded first responder pension system into general state coffers to address budget shortfalls.
What Happened
Retired law enforcement officers and firefighters filed a federal lawsuit Thursday seeking to block implementation of a new state law that terminates their pension account in 2029. The measure, signed recently by Governor Bob Ferguson, would close the Law Enforcement Officers’ and Firefighters’ System Plan 1 account and restart it with only 110% of projected obligations.
The account currently holds 160% of needed funds and is projected to reach more than 200% by 2029. State lawmakers plan to use $880 million immediately to replenish the rainy day fund, helping close a $2 billion budget gap.
The legislation passed on narrow margins, with some Democrats joining Republicans in opposition. Approximately 80% of pension contributions came from state government, with local employers and workers splitting the remainder.
By The Numbers
$3.9 billion: Expected surplus to be swept from the pension fund in 2029
Fewer than 6,000: Current members in the LEOFF 1 system, down from peak enrollment
160%: Current funding level of the pension account as of June 2024
110%: Minimum funding level the state would maintain after the transfer
$880 million: Amount lawmakers plan to use immediately for budget backfill
The Legal Challenge
Attorneys representing the retirees argue the transfer violates contract protections in both state and federal constitutions. Seattle-based firm Hagens Berman filed the potential class-action suit in federal court, contending that longstanding legal interpretation restricts the account to beneficiary use only.
Reichert, a former King County sheriff who served in Congress from 2005 to 2019 and ran unsuccessfully for governor in 2024, criticized the move as disrespectful to officers and firefighters who faced physical and emotional trauma during their careers. Other plaintiffs include retired personnel from King County, Seattle, and Lacey departments.
The Attorney General’s office said Thursday it had not yet fully reviewed the complaint. Bill sponsor Representative Timm Ormsby, a Spokane Democrat, defended the legislation after consulting pension law experts, stating that guaranteed benefits remain protected.
Zoom Out
Washington maintains a reputation for sound pension management compared to other states. The LEOFF 1 system serves only police officers and firefighters hired before October 1977, with contributions suspended in 2000 after reaching full funding. A separate system covers workers hired after that date and remains unaffected.
The lawsuit warns that reducing the funding cushion to 110% leaves the account vulnerable during market downturns. State actuaries acknowledged the law increases the likelihood of future state contributions if investments underperform.
What’s Next
The law takes effect June 11, starting a window for pension beneficiaries to file suits in state court through December 2027. A provision requires direct review by the state Supreme Court for any claims. The Department of Retirement Systems must notify all active and retired members about their legal options.
Washington legislators will return to Olympia next year to address remaining budget deficits beyond the current shortfall.
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