Friday, April 19, 2013
OLYMPIA — Groups that represent current and former government workers in Washington state expressed concern Thursday about a plan in the Senate that seeks to prevent sudden increases in pension values.
Matt Zuvich, a lobbyist with the Washington Federation of State Employees, testified before a legislative committee that the union opposes pension spiking because it undermines stability of the systems along with public trust. However, Zuvich and other employee representatives feared that the Senate’s current plan would cut into the legitimate overtime needs of public safety workers or lead employers to dangerously curtail overtime in times of need.
“We don’t want them to be penalized in their salaries and in their pension calculations because of what they need to do to keep communities safe,” said Jamie Daniels, executive director of the Washington Council of Police and Sheriffs.
The bill seeks to prevent large increases in overtime or other special pay close to retirement. Since that kind of compensation can boost the value of pensions for some workers, the bill would require employers — such as local governments — to cover the extra pension costs of pay that jumps beyond a certain threshold.
Lawmakers have pursued the bill at the end of the legislative session, responding to an Associated Press investigation that recently reported on workers who were able to boost pension values with late pay raises in the old LEOFF-1 retirement system designed for law enforcement and firefighters. However, the bill would not affect LEOFF-1 workers, instead focusing on the prospect of pension spiking in other systems.
The LEOFF-1 retirement system has a unique set of rules, and lawmakers are waiting to hear the results of a state review, in which retirement system leaders are examining raises identified by AP to see if local officials complied with already established regulations designed to prevent pension spiking.
The bill was considered in a Senate committee Thursday but did not get a vote.
Groups generally expressed support for a separate section of the bill that would create an insurance risk pool for some LEOFF-1 medical expenses. Local governments would be able to buy into the plan to help contain sudden increases in costs that come from long-term care.
The AP investigation documented how some local governments were burdened by large medical bills for LEOFF-1 retirees, particularly threatening budgets when retirees need to enter expensive care facilities. Candice Bock, a lobbyist with the Association of Washington Cities, said it’s an issue that local governments have been struggling with.
“We cannot buy long-term care insurance for these folks,” Bock said. “We are having to fund it as we go.”