Approving Washington Ballot Measure 8201 is a financial no-brainer | Opinion

With 70 years of combined experience in making decisions about how to best invest funds for beneficiaries, we can say with confidence that a diversified portfolio is far more advantageous than relying on low-return government bonds and treasury bills — from both a risk and return perspective.

Sure, there are dips in the market year to year, even dives like what happened in 2008 and during COVID. With these ups and downs as given, managing public funds for wise sustainable growth, whether for retirement and pensions, college savings or other purposes, the record of better long-term returns from a well-diversified portfolio speaks for itself.

A well-managed public fund can return annual investment rates of 6%, 7% or even more than 8%, depending on the asset allocation, thereby increasing payouts for beneficiaries and saving taxpayers billions every year. In fact, 75% of payouts from Washington’s defined benefit plans come from investment returns over the life of the employee. Public benefit plans would not be sustainable or would require very high contribution rates if the fund reserves were restricted to government bonds and treasury bills.

But that’s the situation with Washington State’s new Long-term Care Trust Fund, which is currently hampered by a century-old constitutional prohibition on investing state funds in modern-day diversified portfolios.

To fix this problem, a bipartisan supermajority of lawmakers voted 128 to 16 in favor of what is now known as ballot measure 8201 before Washington voters. Measure 8201 would allow the state’s long-term care benefit fund to be invested for balanced growth by the Washington State Investment Board (WSIB), Washington’s independent and nonpartisan investment board in the same manner as they manage dozens of other state funds.

This measure includes a protective layer of accountability and transparency, requiring 100% of investment returns to go right back to long-term care for aging people and people with disabilities, with no raiding or diversions to other programs.

The WSIB manages more than $200 billion of assets, including the investments of 17 retirement plans and several other large public funds like Washington’s Industrial Insurance Program, colleges and universities funds, and developmental disability programs. The board has one of the strongest track records in the country of fiduciary responsibility securing high returns for funds that provide benefits for Washingtonians and delivering an annual average investment return of 8% for pensions over the last 25 years

The Long-Term Care Supports and Services Trust Fund (also known as the WA Cares Fund) is valued at more than $2 billion as of March 2025. Independent actuarial analysis projects a 4.4% short-term return and a 4% return over the next 30 years under current restrictions. Limiting the investment of fund reserves to lower-yield bonds and certificates of deposit puts the fund’s long-term sustainability at risk. Low returns also raise a risk that premiums paid by working Washingtonians would need to be increased or benefits reduced to meet demands on the fund as our population ages and the costs of care rise. Allowing diversified investment is the best way to ensure premiums stay low.

According to an independent actuary’s analysis, even a conservative 1% additional return rate is projected to add more than $67 billion over the next 50 years. Based on our experience, it is far more likely we would see at least a 2% increase in returns from a diversified portfolio, resulting in an average 6% rate of return — a $113 billion increase. The significant additional growth of the fund under this change in investment strategy not only protects taxpayers by lowering the risk of increased premiums, it also creates an opportunity for lawmakers to increase the benefit.

Voters in Washington often face convoluted ballot initiatives. Measure 8201 is not one of them. This is a common-sense change supported by a bipartisan supermajority of Democrats and Republicans, and many nonpartisan fiduciaries like State and County Treasurers, as well as public pension and other plan beneficiaries like law enforcement officers, firefighters, nurses, and teachers.

We support Measure 8201 because it’s about responsible stewardship of a public benefit fund. Measure 8201 strengthens the Long-term Care Trust Fund utilizing proven tools that safeguard pensions and disability funds without increasing taxes. Approving Measure 8201 will grow the fund that provides long-term care benefits for more than 4 million Washingtonians, ensuring their contributions are working effectively and efficiently.

Gary Bruebaker served as chief investment officer at the Washington State Investment Board for 19 years and previously served as deputy state treasurer for the state of Oregon. Steven Hill is a former senior vice president at Weyerhaeuser, a former secretary of the Department of Retirement Services and a member of the Investment Advisory Committee of the city of Seattle Employees’ Retirement Plan.

This story was originally published September 30, 2025 at 5:00 AM with the headline "Approving Washington Ballot Measure 8201 is a financial no-brainer | Opinion."