Personnel & Labor Relations

LEOFF 1 Advisory Group Update

Local governments face significant challenges in determining how to address the cost of medical and long term care obligations for their Law Enforcement Officers’ and Firefighters (LEOFF) Plan 1 retirees. For quite some time, it has been a goal of AWC to seek financial solutions for cities with this tremendous liability.

The recent LEOFF 1 Medical Benefits Report, prepared by the Office of the State Actuary, estimates the statewide liability for LEOFF 1 medical costs for all local governments at $1.745 billion. Roughly, this equals about $250,000 per LEOFF 1 member.

The LEOFF 1 Advisory Group, established in cooperation with the Department of Retirement Systems and comprised of local government employers, LEOFF 1 retirees and others continues to meet on a regular basis to gather information on this very important matter. The goal of the group is to have all the data collected into a fact sheet by fall of this year and then begin working on recommendations to assist employers in addressing these liabilities.

Pension Contribution Rates Set For 2009-2011 Biennium

The Pension Funding Council adopted 2009-2011 contribution rates recommended by the Select Committee on Pension Policy and the WA State Actuary. The new rates assume a 4.25% general salary increase (down from 4.50%) and mortality improvements which assume members life spans are longer in duration.

The Select Committee on Pension Policy will recommend legislation for 2009 that reduces the salary growth assumption in RCW 41.45.035(b) from 4.50% to 4.25%.

*Excludes DRS administrative expense rate of 0.16%

The Law Enforcement Officers and Fire Fighters’ Plan 2 Retirement Board (LEOFF 2) adopted future pension contribution rates based on a four-year schedule. The LEOFF 2 Board has the discretion to adopt rates periodically based on the Office of the State Actuary’s (ASO) actuarial valuation or they could adopt a fixed rate based on the plan’s expected long-term cost. The following fixed rate plan based on the OSA’s June 30, 2007 Actuarial Valuation Report and projected improvements in mortality (longer life span), result in slightly lower contribution rates.

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