August 2025 Pension Report

“Pension Spiking”: The Story They Didn't Tell

Our LEOFF 2 firefighters deserve our respect.  The recent KUOW and Seattle Times investigation into so-called “pension spiking” by LEOFF 2 firefighters centers around the lawful inclusion of overtime in pension calculations. Under RCW 41.26.030(4)(b), the term “basic salary” for Plan 2 members explicitly includes overtime payments earned during a payroll period for personal services. Similarly, RCW 41.26.030(15)(b) defines “final average salary” as the monthly average of a member’s basic salary over their highest 60 consecutive service credit months. Together, these statutes form the legal and actuarial basis by which pensions are calculated for firefighters in Washington State.

In other words, when a firefighter puts in long, grueling hours of overtime—often responding to critical staff shortages—they are not exploiting a loophole. They are following a pension structure that was enacted by the Legislature to fairly compensate the years in which they carried a heavier burden for their departments and their communities.

The article frames this practice as if it were deceptive or unjustified, suggesting that it is “costing the state millions.” But what it fails to acknowledge is that the City of Seattle actually benefits from this system. Why? Because staffing shifts with overtime is a cost-saving strategy. It reduces the need to hire more full-time firefighters—each of whom would require expensive fringe benefits such as health insurance, deferred compensation, training, and equipment. By depending on overtime from existing staff, the City avoids these recurring costs.

Moreover, by employing fewer total firefighters, the long-term financial impact to the State and the LEOFF 2 pension system is arguably positive. Fewer employees mean fewer future retirees. A firefighter who isn’t hired doesn’t earn a pension at all—avoiding a potential 30+ year lifetime pension that could exceed $90,000 annually. The State saves exponentially more by not paying retirement benefits to people who were never on the payroll to begin with.

This trade-off is critical: The firefighters working these overtime hours are sacrificing their off-duty time, family life, and health to cover these extra shifts—many of them under intense conditions. They are not manipulating the system; they are shouldering the City’s staffing shortages and doing so at the expense of their own work-life balance. To vilify them for it is both unfair and inaccurate.

Finally, let’s be clear: The inclusion of overtime in pension calculations is not a flaw in the system. It is a deliberate legislative policy, enacted by the Washington State Legislature, that recognizes the value of personal service rendered above and beyond the regular workweek. If policymakers wish to revise that policy, they were free to do so. But blaming firefighters who are playing by the rules—while simultaneously saving the City money and filling crucial gaps in coverage—is not responsible journalism. It’s a hit piece.

At the Retired Firefighters of Washington (RFFOW), we believe the public deserves the full picture. And that picture includes not just pension payments, but also the long-term cost avoidance that results from a leaner, more overtime-reliant workforce. We salute our active-duty brothers and sisters who step up—again and again—to keep their communities safe, even when the headlines don’t.