Published on 04/13/2010

This is a general article about pension funding that was produced by Boston College. It really does not apply to LEOFF 1, at least not specifically but the article does provide a good deal of in-depth pension funding information for those who are interested in following the issue.

Key findings on public pension funding are included in a new report entitled "The Funding of State and Local Pensions: 2009-2013":

State and local plans, which were headed toward full funding, were knocked off track by the financial crisis.
Their overall funding ratio dropped from 84 percent in 2008 to an estimated 79 percent in 2009.
Funding will likely continue to decline to 72 percent by 2013.
Reversing this decline will be difficult, as plans face constraints in increasing revenues from either employee contributions or taxes

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The report was released April 8, 2010, by the Boston College's Center for Retirement Research (CRR).

Washington's plans are mentioned in the appendix to the report. Washington's opens plans (Plans 2/3 and WSPRS) were reported to have a funded status of 100 percent, which is consistent with the "aggregate" funding method used for these plans. The aggregate method is unique in that it does not allow the plans to accrue an unfunded accrued liability.

GASB (Governmental Accounting Standards Board) Standard 50 requires Washington to report the funded status of these plans using another funding method such as "entry age normal." Using the latter method, Washington's open plans (Plans 2/3 and WSPRS) have a combined funded status of 107 percent.

Finally, the report projects the funded status of Washington's closed plans (Plans 1) for 2009. CRR's results were reasonably close to the latest projections from Washington's Office of the State Actuary (OSA). OSA estimated a 6/30/2009 funded status of 70 percent for PERS 1, 75 percent for TRS 1 and 129 percent for LEOFF 1.

View the entire report.