Seattle Forward

Washington Legislature: Help Workers Start Saving for Retirement

This post, co-written with Stephanie Bowman, first appeared in The Seattle Times on February 11, 2020.

For the third time in recent years, the Washington Legislature is poised to finally do something about the massive retirement crisis looming in our state, where more than 1 million workers — 38% of all workers — have no access to employer-sponsored savings plans.

By adopting the Secure Choice Retirement Savings Act (HB 2516), the Legislature will be following the lead of Oregon, California and Illinois, and soon Maryland and Connecticut. These other states have created government facilitated, privately administered worker-owned retirement saving plans requiring employers who do not already offer a plan to enroll their workers in the state’s plan. These plans are easy for employees to sign up for, and — most important — go with the employee when they leave the company, a critical feature for younger employees who change jobs every few years.

City Pension System Reforms: The Rest of the Story

Daniel Gilbert and the Times did some solid reporting on how city government formerly managed its employee pension funds. However, here’s the rest of the story. It’s a story of reform, transformation really, that has occurred over the past five years—new leadership, restored staff morale, greatly improved client services, beefed up professional investment staff, stronger accountability and transparency, and stronger investment portfolio returns putting Seattle in the top 25% of public pension funds nationally.

A 10-year look-back at portfolio returns shows a pretty bleak picture; 4.5% return on average per year. But with the reforms cited above, performance has dramatically improved: 8.8% in a five-year look-back and 7.9% in the most recent three-year period. The five and three year performance has matched expectations and exceeded the median performance of pubic pension programs.

Sustainable Retirement Plan Saves Taxpayers $200 Million Over 30 Years

The City Council unanimously approved legislation yesterday afternoon that will lead to a new defined benefit retirement plan for City employees. The plan is expected to save the City $200 million over the next 30 years.

This new retirement plan is a win-win-win. We've managed to retain a defined benefit pension system, which will help attract top talent to City agencies. Employees will contribute less from their salary, which means more money in their pockets now. And, over time, the City will save hundreds of millions of taxpayer dollars.

The retirement plan, called Seattle City Employees' Retirement System (SCERS) II, will be available for new employees hired on and after January 1, 2017. The new retirement system benefits better align with other public agencies in the Puget Sound region and were developed collaboratively with City labor unions.

Following the 2008 recession, the City’s retirement system faced financial challenges after experiencing a 26.8% loss. In 2011, a City Council-sponsored report defined the challenges facing the system and offered alternatives to ensure the future sustainability of the system.

The plan approved today is structured similarly to the current retirement plan, SCERS I, and will still provide an adequate retirement benefit to employees. Both employees and the City will contribute less to the program.  Currently the City and its employees contribute 15.8% of payroll to fund the benefits earned during the year.  In the new plan the contribution will drop to 11.9% of payroll.

We’re saving money, ensuring a healthy retirement system going forward, and providing competitive benefits for our employees. I'm grateful for the collaborative effort by the Mayor, Council and the City’s labor unions to reach this outcome.

A New Year at City Hall

Today was a big day at City Hall. Hundreds packed the building for the swearing-in of new Mayor Ed Murray, new Councilmember Kshama Sawant, the three reelected Councilmembers and our reelected City Attorney.

Working together, those of us in the City have a fresh opportunity to build the public’s trust and confidence in local government.

The Council also held our first Full Council meeting of the year, where we finalized City Council committee and regional committee assignments. I will chair the Education and Governance Committee, which will focus on realizing the goal of voluntary, high-quality, affordable preschool available to all Seattle’s children. The Committee also oversees intergovernmental relations, the City’s personnel policies, and any legislative matters relating to ethics and elections.

In addition, my colleagues selected me to serve as the President of the City Council for 2014-2015. This means that I chair the City Council meetings and ensure all members of the legislative department can perform their work efficiently and effectively. Below are the remarks I made in acceptance of this position:

Customer Service in the City Retirement Office

As I wrote last month, the Seattle City Employees’ Retirement System (SCERS) is undergoing a significant period of transformation. SCERS leadership has embarked on a number of improvements to the way the office conducts its business and serves its members.

This morning, the SCERS Board of Administration heard from a consultant about how the office can provide better communication and customer service. The consultant conducted a thorough review, highlighted current strengths and recommended some changes.

The recommendations were very specific. To name a few: begin tracking customer service metrics like contact volume, contact topic, response time and time to case closure; organize content on the website by audience group (member of the public, active employee, retired member, beneficiary, etc.); and simplify the language of written communications.

The actions highlighted in this audit, when implemented by staff, will greatly improve the interaction between SCERS staff and City employees, retirees and beneficiaries.

The study and recommendations also provide a strong example for other City departments to follow. Those of us in public service must always be asking ourselves: who are our direct customers and how can we better serve them?

Update from the City Retirement Board

This post provides an update to current and former City employees who are members of the retirement system on recent changes designed to strengthen the system.

I’m writing this post as Chair of the Seattle City Employees’ Retirement System (SCERS) Board of Administration with an update on Board actions designed to strengthen the System and protect your retirement benefits.

As a Board, our primary responsibility is to make certain the retirement System is managed efficiently and effectively. This means ensuring your benefits are calculated correctly, your personal contributions and those of the City are invested wisely, and a defined benefit will be available for your retirement and that of future generations of City employees.