November 21st 2024
LEOFF I Coalition Newsletter: 7/7/05
By President Robert Monize
We share some detail regarding subjects of the annual cost of living pension increases,(COLA), and pension plan health as it is affected by recent changes in spousal benefits and a proposed change in the 2006 legislative session.The Cola subject is something of a concern lately. We see fuel prices rise sharply and may assume our local economy has “recovered”. The State Actuary’s Office has conflicting information from the US Dept. of Labor, the latter who have the policy power to decide the annual COLA designation for any given area. We had the COLA, a key benefit, tied to the “Seattle” CPI. We are now informed that in 1998, the US Dept of Labor added also the areas of Bremerton, Snohomish County, Tacoma and Thurston County to the CPI. The Actuary is obliged to follow the Labor Dept decisions. No alternative are known to exist.We are said to still be in recession time, of a 1.8% CPI. Housing values affect the CPI designation. The 1992-93 experience is said to be what brought this all up. In contrast, Western Montana is at 2. 6%. San Diego is at .28% , a slow economy. We were once at a negative .03% when consumer prices were down. The WSP apparently wanted and got the Seattle expanded CPI for their pension benefit in the 2001 legislative session.The Actuary’s Office views our pension fund still in surplus, and that costs for any other LEOFF 1 are guaranteed by pension law, now, and later. It is the “later” that many of us find concerning. We need to watch dog that later time frame and hold the state accountable. HB1319 did pass in the last legislature session. It allows all ex-spouses of LEOFF 1 members who have been provided benefits under any court approved property settlement agreement incident to the divorce of the member and ex-spouse, to continue receiving those ex-spouses benifits whose benefit was suspended upon a member’s death to resume their benefit. The Actuary saw a cost to the pension fund of $9 million over time, no cost to state government.HB1329 has another LEOFF 1 survivor benefit. It amended the plan provision relating to survivor benefits under 41.26.164, which provides an optional reduced retirement allowance with survivor benefits to spouses that are ineligible for survivor benefits under other her plan provisions. The bill changed one of the criteria for allowing a member to chose their retirement option. Under this legislation, the member may select the option as long as there is some portion of his or her retirement benefit is subject to a property division pursuant to a domestic relations order. Currently, any division would defeat the member’s ability to select this option. Again, the state sees an impact on the state, but believing that this benefit will bring the fund out of surplus position.
Not passing this last year but scheduled to be scheduled for Select Joint Committee On Pension Policy work plan discussion is a LEOFF 1 benefit 60% cap proposal. The proposal meant to be studied is HB1873/SB5901, presented by Simpson and Delvin. The bills would remove the provision that limits the retirement allowance for those who became LEOFF 1 members on or after Feb. 19, 1974 to 60% of their final average salary. There is a $23 million cost, but the impact is charged to the LEOFF 1 fund, that is said up $1 million better now.
Active duty 1974-77 LEOFF 1 should keep an eye on these bills in the next session.