September 1, 2013 -- It has been a real delight to have the legislature out of session. That has provided a bit of extra time to enjoy this great summer. We have had our ears to the ground, and so far, the have been no indications of any planned legislation that might impact LEOFF 2.
However, that does not mean it is not on some people’s minds. While SB 5916 did die in the last session, the bill is primarily focused on so called “pension spiking” or “excess compensation”. This has been a problem in some of the pension systems because of a provision that allows the conversion of unused vacation and sick leave to increase the final average salary. Likewise a tendency to cram a lot of overtime into the last year of work also increases the final average salary.
What is curious is that this problem rests with non LEOFF systems. LEOFF 1 does not provide for the inclusion of overtime or unpaid leave in the final salary. LEOFF 1 is based solely on the salary at the time of retirement. Conversely, LEOFF 2 does allow the inclusion of overtime in the final average salary, but the calculation is based on the last five year’s salary. So a lot of overtime in the last year or two will not have much impact on the number. Since LEOFF 2 does not have medical coverage in retirement, the ability to include overtime is an important asset as it allows for building a little more into the pension to help meet those medical costs. Even then, not many LEOFF 2 folks are in a position to build any significant overtime and particularly not in the last five years of their career.
So, this bill is really focused on the other systems but somehow had LEOFF thrown into the mix. I suspect this was because of series of inaccurate and inflammatory articles about pension abuse published near the end of the last session. In fact, this bill did not come forward until after the articles appeared. An earlier try to pass a spiking bill died in committee. That bill did not have any of the LEOFF stuff in it so it is pretty clear that the articles emboldened the legislators supporting the spiking bill to try again but with the added twist in response to the articles.
SB 5916 was a really bad bill that was not well thought out. It would have had serious unintended consequences and would have generated law suits to block its implementation. Thankfully, the bill died in committee.
We are expecting the bill to raise its ugly head in the next session but have not yet been able to confirm our suspicions or identify how such a bill might be constructed next time around. We are trying to work with the legislators so that we will have an opportunity for input before anything if brought forward. Done properly, the issue can be dealt with without LEOFF issues and without harming the majority of workers coming up for retirement.
I would urge each of you to try to contact your legislator. Do it on a personal basis. The legislature is out of session and your legislator is home. Buy them a cup of coffee. Most of them love to meet with their constituents for a face to face talk in an informal setting. It will sever us all in good stead if you have to contact them again during session.
Of course, we will continue to keep you posted of any news.