Personnel and Labor Relations

LEOFF 1 Medical and Long-Term Care Costs

This session, we secured the allocation of $40,000 for the Department of Retirement Systems to form an advisory group of local government employers, LEOFF 1 retirees and others to study the funding of retiree medical benefits for LEOFF 1 members. The first meeting has been set for Thursday, May 22 to determine advisory group participants and begin discussions aimed at developing specific recommendations for funding assistance and other legislative solutions.

A study completed by the Office of the State Actuary in December 2007 estimates the statewide liability for LEOFF 1 medical and long-term care costs for all local governments at $1.745 billion. In general terms, this equals nearly $235,000 for each of the 7,447 active and retired LEOFF 1 members.

For a copy of the study, go to the State Actuary’s website at http://osa.leg.wa.gov and click on LEOFF 1 Medical Study.

As a reminder, smaller and medium sized jurisdictions (those with fewer than 100 LEOFF 1 actives and retirees) will be able to utilize an online tool developed by the State Actuary to estimate their individual liability. You can find the tool at http://osa.leg.wa.gov – click on OPEB under Actuarial Services.

Larger jurisdictions will need to contract with a private firm for a complete actuarial analysis of their liability.

Pension Contribution Rate Update

Employer and employee pension contribution rates are scheduled to increase for most state pension plans effective July 1, 2008.

The following chart shows current employer and employee rates for the PERS, PSERS, and LEOFF systems and the new rates that go into effect on July 1.

For future planning purposes, the chart also includes projected rates for the 2009-11 and 2011-13 biennia. The State Actuary’s Office provides these projected rates as their best estimate of future rates based on 2006 data, current plan provisions, and projected assets and liabilities. They are subject to change due to changes in plan provisions, assumptions, the actuarial experience of the systems, interpretations of the law, and legislative action.

For a more detailed chart showing the components of the various rates and information about the pension rate-setting process, go to the State Actuary’s website at http://osa.leg.wa.gov and click on Contribution Rates.

What are Pensions and how are they Funded?

If you’re interested in taking some of the mystery out of pensions, the Select Committee on Pension Policy has updated its orientation manual and it’s available on their website at www1.leg.wa.gov/SCPP/Publications, along with a brief Pensions 101 power point presentation.

Transfer of Fire District Employees to Annexing Cities (ESHB 2938 failed)

This bill, if it had passed, would have removed any discretion the annexing (or incorporating) city would have had regarding hiring fire district employees who would lose their district jobs because of an annexation and who want to transfer to city employment, regardless of the need for the employees.

Although this bill failed, we know it will be back in 2009. Legislative staff, at the direction of legislators, called a meeting this past week to review the issue. We expect significant pressure to pass this bill next year and are working to find acceptable solutions to all of the parties involved.

Employment of Minors

Currently, public employers are excluded from state statute requiring work permits and other state regulations regarding employment of minors. AWC staff recently met with Department of Labor & Industries (L&I) staff to review this practice. Our discussions included the possibility of updating Minor Work Rules to expand coverage to include public employers.

After careful consideration, it was determined that the public agency exemption will not be modified at this time. L&I will continue to monitor for minors working in prohibited duties, both public and private, through the worker’s compensation reporting system. Local governments however, continue to be subject to federal Fair Labor Standards Act regulations governing child labor.

For questions regarding minor work rules, please contact WA Department of Labor and Industries at (360)902-5315; toll free at 866-219-7321 or Email: conw235@lni.wa.gov.

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