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Published on Friday, April 19, 2013

New bill addresses pension spiking and LEOFF 1 medical costs

SB 5916, introduced just this week, had a public hearing in the Senate Ways & Means Committee on Thursday. The bill is in response to the pension spiking and medical benefits issues raised in a series of AP articles that ran last week. The bill does three things:

  • Requires employers to pay the actuarial value of compensation that exceeds 125% of the person's reportable compensation from the prior salary averaging period, where the increase is the result of payments for overtime, bonuses, cash-outs of any form of leave, or lump-sum payments.
  • Allows an employer or employee to appeal the decision of a local disability board to the Director of the Department of Retirement Services.
  • Directs the local government self-insurance program of the Department of Enterprise Services to assist city, county, and fire district representatives to develop a voluntary local government risk pool for LEOFF Plan 1 retiree medical services. (Again, LEOFF stands for Law Enforcement Officers’ and Fire Fighters’ plan.)

AWC generally supports these measures and testified in favor of the bill. We do have concerns about the technical aspects of the bill on how to count excess compensation for the purposes of pension calculations.

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