Washington State Sued Over Plan to Sweep $4 Billion from Police and Firefighter Pension Fund
Why It Matters
Retired police officers and firefighters in Washington state are fighting back against what they describe as an unconstitutional raid on their pension fund — a move that legal experts say may be unprecedented in American history. The lawsuit has direct implications for how states across the country manage public employee pension surpluses, and raises serious questions about the security of retirement benefits promised to first responders who risked their lives in service.
For the roughly 5,500 remaining members of the affected pension system — including retired officers and firefighters from Seattle, King County, Lacey, and communities across Washington — the stakes could not be higher.
What Happened
Retired first responders, including former Republican Congressman and King County Sheriff Dave Reichert, filed a federal lawsuit Thursday in Seattle to block a new Washington state law that would sweep nearly $4 billion from the Law Enforcement Officers’ and Firefighters’ System Plan 1, known as LEOFF 1.
The law, signed this month by Democratic Gov. Bob Ferguson, terminates the overfunded pension account at the end of June 2029 and reinstates it at 110% of projected obligations — a significant reduction from the fund’s current funding level. The redirected surplus would flow into a separate account available for general state expenses.
The Democrat-backed measure passed the Legislature on narrow margins, with some Democrats joining Republicans in opposition. It marks what appears to be the first time any state has ever terminated a public employee pension plan. The state will also need approval from the Internal Revenue Service before proceeding.
The potential class-action lawsuit argues the law violates the contract clauses of both the state and U.S. constitutions, contending that the money in the LEOFF 1 account can only legally be used for the benefit of its members.
By the Numbers
- $3.9 billion — the amount state actuaries expect to be swept from the LEOFF 1 fund in 2029 under current assumptions
- 160% — the fund’s funded status as of June 2024; projected to exceed 200% by 2029
- 110% — the funding level the account would be reset to under the new law
- $880 million — the portion lawmakers plan to use immediately to backfill the state’s rainy day savings account
- Fewer than 6,000 — the number of LEOFF 1 members remaining, covering officers and firefighters hired before October 1, 1977
What They’re Saying
Reichert, one of the lead plaintiffs, was blunt in his criticism. “It almost seems like elder abuse in a way,” he said, adding that the state has “disregarded the emotional, physical trauma that these 5,500 remaining cops and firefighters have experienced throughout their career.”
Seattle-based attorney Steve Berman, representing the plaintiffs, called using the surplus for non-pension purposes a “gross miscarriage of justice” and warned that resetting the fund to just 110% leaves retirees exposed if markets decline. State actuaries have acknowledged the law “increases the potential of future state contributions if adverse experience occurs.”
The bill’s sponsor, Rep. Timm Ormsby, D-Spokane, defended the measure, saying pension benefits remain “guaranteed” and that the redirected surplus will benefit all Washingtonians. A spokesperson for the state attorney general’s office said Thursday that the office had not yet fully reviewed the suit.
Zoom Out
Washington has long maintained a reputation for disciplined pension management compared to other states. This move comes as the state grapples with an estimated $2 billion budget gap in the current cycle — and faces an even larger deficit when lawmakers return to Olympia next year. Washington lawmakers have already cut funding to the Department of Natural Resources, forcing the closure of four campgrounds, illustrating the breadth of belt-tightening rippling through state government.
The case is being watched nationally. Legal analysts note that if the federal court allows the state to terminate and reconstitute a pension fund to extract a surplus, it could open the door for other financially strained states to pursue similar maneuvers — setting a troubling precedent for public employee retirement security across the country.
What’s Next
The federal lawsuit has not yet been scheduled for a hearing. On a separate legal track, once the law takes effect June 11, pension participants will have until December 31, 2027 to file suit in state court, with claims subject to direct review by the Washington State Supreme Court. The state’s Department of Retirement Systems is also required to notify every active member, retiree, and spousal survivor of the process. Washington will additionally need IRS approval before it can proceed with terminating the pension account in 2029.
About the Author
