I want to thank you for the complementary phone calls, cards and e-mails in relation to the passage of HB 1506.

The bill amends RCW 41.18 the Prior Act.

The amendments will:

• Allow a survivor of a member who retired on a disability pension to remarry without forfeiting their pension. Allow a survivor of a dual member (a member who worked under RCW 41.18 the Prior Act and RCW 41.26 the LEOFF Retirement Law) who retired on a disability pension under LEOFF 1 and is now receiving a second check to remarry and retain the second check, a Prior Act Benefit.

• Allow a member who retired under RCW 41.18 only and a dual member who retired under LEOFF 1 and is receiving a second check, who was not married for five years before retirement or who married after retirement to now select a survivor option for the current spouse.

These amendments only affect the Prior Act. There is no retroactivity. You as a member or as a survivor must be receiving the benefits on the effective date of the law July 2009, to qualify for the amended benefits. The member who wants to select the survivor option will have three choices:

• A whole 100% allowance option
• A 50% allowance option
• A 66.67% allowance option

The member who selects one of the above options will then receive a reduction in their current pension. The reduction will be based on the current pension and the age of the member and the age of the spouse.

Upon the death of the member, the spouse will continue to receive the current pension the member is receiving at the time of death and will receive an annual COLA each year.

If the spouse precedes the member in death, the member¡¦s pension will pop up to its full value. I believe the reduction factors will be the same as used in LEOFF 1, but that has not been decided at this time.

Remember, each calculation will be different for each member as it is computed on the value of the current pension and the age of the member and the spouse. Using the LEOFF 1 reduction factors, here are two examples:

Example 1: A member who is 4 years older than the spouse and is receiving a pension of $1,000 per month would receive a reduction of $257.00 per month for a 100% survivor pension benefit.

If the member lives for 5 years after selecting the 100% survivor benefit, the member would receive a $257.00 per month reduction in his/her current pension for the 5 years equaling $15,420.00. Upon the member¡¦s death the spouse would receive the current reduced pension of $743.00 per month. In 22 months the spouse would receive $15,603.00 not including any COLA increases, the total amount that was reduced from the member’s $1,000 pension for the past 5 years. If the spouse lives 5 years after the member’s death, she would receive $44,580 not including the annual cost of living increases which would be in addition.

Example 2: If a member is receiving an $1,800.00 per month pension, is 4 years older than the spouse and selects the 100% benefit survivor option, he/she would receive a $463.00 per month reduction in his/her current pension. If the member lives for 5 years they would have a total reduction of $27,780. The survivor would continue to receive the current reduced pension of $1,337.00 plus any cost of living increases. In 21 months the survivor would receive $28,077, plus any cost of living increases, which would equal the amount that that was reduced from the member¡¦s original $1,800 pension. If the spouse lives fro the next 5 years, she will receive $80,220, plus any cost of living increases.

These examples would of course be different if the member selected the fifty percent or the two-thirds benefit option.
Watch for a letter from your pension board explaining how you can apply for the survivor options and the dates that the application must be submitted and approved.

Just as we were afraid of when we opposed the LEOFF 1 contribution holiday, the State Actuary is now projecting an unfunded liability in 2014. The Pessimistic Investment Outlook indicates that the funded ratio will decrease to 93% funding in 2014, and continue to decrease to 65% funding in 2019, and become fully funded in 2024. The Expected Investment Outlook indicates a 98% funded ratio in 2016 continuing to 2023. These projections are based on the State resuming the contributions under the previous State funding policy when the plan is no longer fully funded. At that point there will be few, if any, active members so there will be no employee or employer contributions if the contributions were reinstated, leaving the State responsible for any unfunded liability.

LEOFF 1 Coalition Information:

We have been notified that the Retired Seattle Police Officer Representative to the LEOFF 1 Coalition has been voted off the board by a 7 to 1 vote of the Directors. (I¡¦ll bet you can guess who cast the one vote for the Retired Seattle Police Representative to remain on the board.) One would have to wonder why there would be a 7 to 1 vote on such an important issue. Is the board really up to speed and exercising due diligence in their administration of the organization? There is now a legal question if this was within the board authority, to remove the Retired Seattle Police Officer Representative. The Coalition when originally formed, was made up of LEOFF 1 organizations. The Retired Seattle Police Officer Association is about the last major organization remaining in the Coalition.

If they decide to drop out it will leave the majority of the board being appointed by the board from at large candidates with the only criteria, being that the appointee be a LEOFF 1 member.

I believe the Coalition had to advertize for a president, and appointed an individual who was not even a career retiree. The individual appointed president had vested after ten or more years of service and was not involved in the LEOFF 1 system for several years. He merely raised his hand and said I'll be the president.

Some of the organizations that were originally members of the Coalition, including the RFFOW, have had some concerns as to how the Coalition is being managed.

• There is really no membership, only a list of people who have made a donation.
• No business meetings where motions can be made directing action.
• A board of directors appointed by the board, with the only eligibility for appointment, is that the appointee be a LEOFF 1 member.

Other concerns are that the Coalition is continuing to seek donations by using a scare tactic that the legislature is trying to take our pension money which is not true.

Actually, there is no money to take. Ironically, when the LEOFF 1 Fund lost over sixty million dollars due to the contribution holiday, the Coalition never said a word.

Some believe that funds are being wasted on printing and other administrative expenses.

The Coalition takes credit for the accomplishments of others.

The information in the annual report is incorrect and untrue and there is no need to request additional donations as they have sufficient funds.

Because of these concerns, the Washington State Council of Police and the Seattle Police Retirees Association have sent a letter to their members advising them not to make any donations to the LEOFF 1 Coalition. I want to suggest to our members that they do not make any contributions to the Coalition and if you have, forward a letter requesting that your contribution be refunded.

Your membership and your dues paid to the RFFOW and the donations to our Political Action Fund are sufficient at this time.

In closing, I want to remind you that we have had at least 8 bills passed since 2000, that amended the LEOFF 1 statute and I have yet to see anyone from the LEOFF 1 Coalition testify for or against a single bill. I hope to schedule a meeting with the concerned groups and the Coalition in an attempt to resolve these issues.