Washington LEOFF Plan 2
This page documents how FinZot models the Washington LEOFF Plan 2 defined benefit pension plan.
Who this plan covers: Public safety members of Washington Law Enforcement Officers’ and Fire Fighters’ Retirement System, on or after October 1, 1977: first became a member of LEOFF.
Employee Contributions
Section titled “Employee Contributions”Employee contributions are the portion of salary that the employee pays into the pension fund.
| Field | Value |
|---|---|
| Contribution Rate | 8.53% of salary |
| Tax Treatment | Pre-tax (reduces taxable income) |
Vesting & Retirement Eligibility
Section titled “Vesting & Retirement Eligibility”Vesting
Section titled “Vesting”Vesting determines when an employee has earned the right to receive pension benefits. The following formula must evaluate to TRUE for the employee to be vested:
service_credits >= 5Retirement Eligibility
Section titled “Retirement Eligibility”Retirement eligibility determines when an employee can begin receiving pension payouts. The following formula must evaluate to TRUE:
(commencement_age >= 53 AND service_credits >= 5) OR(commencement_age >= 50 AND service_credits >= 20)Formula Variables:
service_credits: Years of credited servicecommencement_age: Age when pension payments commence
Benefit Calculation
Section titled “Benefit Calculation”The annual pension benefit is calculated as:
Annual Benefit = Final Compensation × Benefit Factor × Service CreditsFinal Compensation
Section titled “Final Compensation”Final compensation is the salary figure used in the benefit calculation, typically an average of the employee’s highest-earning years.
| Field | Value |
|---|---|
| Method | Highest Consecutive Years |
| Years Averaged | 5 |
Benefit Factor
Section titled “Benefit Factor”The benefit factor is a percentage multiplier that typically varies based on retirement age. Higher ages generally yield higher factors.
IF(service_credits <= 0, 0,(0.02 * service_credits + 0.005 * MIN(10, MAX(0, service_credits - 15))) / service_credits) * IF(commencement_age >= 53, 1, 1 - 0.0025 * MIN(636 - 12 * commencement_age, 637 - commencement_age_months)) * IF(service_credits >= 20, 1.0025 ^ MAX(0, MIN(commencement_age_months, 637) - 12 * separation_age - 12), 1)Formula Variables:
commencement_age: Age when pension payments commenceservice_credits: Years of credited service
Cost-of-Living Adjustment (COLA)
Section titled “Cost-of-Living Adjustment (COLA)”The COLA formula determines how pension benefits grow over time after retirement to keep pace with inflation.
IF(years_since_retirement >= IF(commencement_month >= 8, 2, 1), current_pension_benefit *(1 + MIN(0.03, MAX(0.0, inflation_rate))), current_pension_benefit)Formula Variables:
initial_pension_benefit: The annual benefit amount at retirementyears_since_retirement: Number of years since retirement began
Tax Treatment
Section titled “Tax Treatment”Pension payouts from this plan are taxable as ordinary income.
Social Security Coverage
Section titled “Social Security Coverage”Whether a Washington LEOFF Plan 2 employer participates in Social Security varies from employer to employer, so FinZot does not assume either way. Check a pay stub for a Social Security (OASDI) deduction and set it on the income stream.
Note: FinZot’s pension estimates are for planning purposes only and may not reflect all plan provisions. For official benefit estimates, contact your plan administrator.