COUNCIL 2 has never been a strong supporter of the concept of gain sharing. But the program carries some benefits with it. When the state pension investments gain more than 10 percent for four consecutive years, Plan 1 and Plan 3 participants get to share in those gains.

Now, in her budget for this year, Governor Christine Gregoire is proposing to remove gain sharing permanently after a one-time payment this year. But the really bad news is that she fails to propose any replacement for gain sharing.

Council 2 was hoping that the governor would propose an improved means of distributing pension gains to members.
“We would rather see a tradeoff that addresses the age 65 minimum, like the ‘Rule of 90’,” says Council 2 Deputy Director
Pat Thompson.

The problem with gain sharing, Thompson adds, is that it is cyclical, moving in line with the markets and therefore providing gains in good times, but nothing most of the time.

“We would rather see modest guaranteed improvements in our system than a system that provides benefits in one year but not in the next,” he says.

“In short, we are not opposed to it going away, but it must be replaced with something that provides a guaranteed benefit for everyone.”