Pension rates

In the January 16 Bulletin, we reported the Governor’s proposal to reduce pension contributions in her 2009-11 Budget by switching from the Aggregate method to the Projected Unit Credit (PUC) funding method for Plans 2/3, suspending projected mortality improvement projections and reducing the general salary increase assumptions.

The proposal included a significant reduction in pension contribution rates, resulting in immediate savings of approximately $316.5 million for local governments (PERS $212.7M, PSERS $1.4M, LEOFF $102.4M) and $515.6M for the state for the 2009-11 biennium.

AWC has received several recent inquiries about reductions in pension contribution rates. We have no new information to share at this time. However, the House and Senate budget proposals are expected to be released next week. Once released, we will inform you of pension rate proposed adjustments.

Unemployment compensation

Several bills were introduced this session affecting unemployment compensation insurance. Following are bills which are still alive, or have been signed into law:

Economic security, improving through unemployment compensation (ESHB 1906) – provides temporary increases in unemployment benefits by adding $45 to the weekly benefit amount and making $155 the minimum amount payable weekly. The bill also expands training programs. The Governor signed the bill and it is effective as of April 5, 2009.
Experience rating accounts of employers with a military service benefit charge exemption (SB 5009) – provides that employers may request non-charging of unemployment benefits paid to former employees who were hired to replace employees called to federal active military duty. The bill is in the House Rules Committee and may be placed on the floor calendar for second reading.
Voluntarily leaving part-time work and qualifying for benefits under certain circumstances (SB 5804) – this bill sets forth the circumstances in which quitting part-time work does not disqualify a person from receiving unemployment benefits. The bill was heard by the House Committee on Commerce & Labor on Friday, March 20.

Concerning retrospective rating plans (ESSB 6035)

A retrospective rating plan is an optional program offered by the Department of Labor and Industries that allows groups of employers to assume a portion of industrial insurance risk. Employers pool their individual premiums and claim losses as a single entity. Premiums for the group are adjusted based on the group’s actual claim losses during a coverage period.

As currently structured this bill would:

Encourage retrospective rating group sponsors to use refunds to create and maintain workplace safety programs;
Encourage sponsors to make refund distributions to members of the group;
Make available to the public the sponsoring group entities administration practices;
Cause group sponsors to make distributions to its members according to a plan which has been disclosed to its members and the Department of Labor and Industries;
Allow sponsoring groups to continue to retain a portion of the retrospective refund, upon written authorization from members, to be used for any legal purpose; and
Mandate Department of Labor & Industries conduct an actuarial review of the retrospective rating program annually for five years beginning January 1, 2010 and report findings to the Legislature. The actuarial review will examine the methods used to calculate retrospective premiums, refunds and assessments and impacts to the L&I Accident Fund.

ESSB 6035 narrowly passed the Senate 25-24 on Thursday, March 12, and is scheduled for public hearing before the House Committee on Commerce & Labor on Tuesday, March 24 at 10 am.

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