UPDATE: Governor Vetoes Task Force on LEOFF 1 Medical Costs

The following article was included in the printed version of the March issue of Personnel News. However, on March 30, Governor Gregoire vetoed section 2 of SHB 2688, which would have established a joint executive task force to study the issue of funding postretirement medical benefits for LEOFF 1 members. In her veto letter, the Governor stated that while it made sense for the state to assist local governments in their search for ways to address their significant financial obligations to provide health care benefits to LEOFF 1 retirees, she felt a thorough review of the options would take longer than provided in the bill, and would need to include a broader range of possibilities.

In the waning minutes of the 2006 Legislative Session, the Legislature passed SHB 2688, which could help local government employers with their fiscal liability for medical benefits for retirees from Plan 1 of the Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF 1).

Under the LEOFF 1 pension statute, cities and other local governments are responsible for the cost of lifetime medical and long-term care benefits for their LEOFF 1 retirees.

The legislation directs the Governor to establish a joint executive task force to study the funding of post-retirement medical benefits for LEOFF 1 members. The task force will consist of the director of the Department of Retirement Systems, the administrator of the State Health Care Authority, the State Actuary, a representative of Washington cities, a representative of Washington counties, an active member of LEOFF 1, and a retired member of LEOFF 1.

After evaluating options, the task force will select private or public funding vehicles through which voluntary employer contributions and transfers of excess pension funds may be used for funding LEOFF 1 medical benefits. If legislative authorization is required to implement the chosen funding mechanism, the task force will report to the legislative fiscal committees on its recommendation by September 1, 2006, with the final report due by December 1, 2006.

It has long been a goal of AWC to secure financial assistance for local governments’ LEOFF 1 retiree medical and long-term care costs. We look forward to actively participating in the work of the task force.

The legislation also removes the 60 percent LEOFF 1 benefit cap. This change will benefit members of LEOFF 1 who joined the plan after February 18, 1974; members who joined the plan earlier were not subject to the cap. It will not result in reinstatement of pension rates for LEOFF 1 employees or employers.

 
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