The 2009 Legislative Session is scheduled to adjourn on April 26, 2009. I am very pleased to report that two of our four primary bills have passed.

SB 5238 was signed by Governor Gregoire and will allow the RFFOW and other retiree groups that meet the requirements as defined in the law the opportunity to mail out information to all retired members in a particular pension plan who are receiving a retirement check from the Department of Retirement Systems.

HB 1506 is scheduled to be signed into law by the Governor on April 21, 2009 at 2:20 pm. HB 1506 is a Prior Act bill that will allow a surviving spouse of a member who retired on a disability pension to remarry without forfeiting her pension.

This bill will also allow a surviving spouse of a dual member, one who retired on a disability pension under LEOFF 1, who worked under the Prior Act and is receiving a second check from their former employer, the right to retain the second check if she is remarried. The major benefit in this bill is that it will now allow a member who retired under the Prior Act and who was married within five years of retirement or after retirement the option of providing a survivor benefit for the current spouse upon his death.

The member will be able to choose the type of survivor benefit and will then receive a small deduction in his current retirement check based on the age of the spouse.

The spouse will continue to receive the retirement check for life with the appropriate cost of living adjustment. If the spouse precedes the member in death the member’s retirement check will then be increased to the full value.

This is the first major piece of legislation in many years that has been passed to improve the Prior Act. This benefit is well deserved as many of these retired Prior Act members don’t have any Social Security benefit to pass to the spouse and many of the spouses of that generation didn’t work and earn their own Social Security benefit and if they did they didn’t have the high paying employment of women today.

This bill will also allow the dual members who married within five years of retirement or after retirement the option of a survivor benefit for the second check they are now receiving as a Prior Act benefit. We will notify you of the dates and the sign up process for the new survivor options. Local pension boards should send a letter explaining this benefit and instructions how to sign up.

HB 1212 that would allow a spouse of a LEOFF 2 member or other public employee who was killed in the line of duty and who was awarded an L & I pension the right to retain that pension if remarried, was referred to a study to determine the total cost of this benefit. The bill did pass the House but was referred to a study in the Senate.

HB 1547, a bill to increase the $150,000 death benefit to $175,000 for a LEOFF 2 member or other public employee who is killed on the job or who dies as a result of an occupational injury or illness, failed to pass the Senate. We will try again next year. I will report next month on all the other retirement bills that were passed this session. We were notified by the City of Hoquiam that the city will now pay for the medical bills submitted by now deceased member Ken Mitchell.

The city will forward a check for approximately $5,000.00 to the estate of Brother Mitchell. I would like to extend our thanks to the City of Hoquiam for reconsidering this issue and for authorizing the payment.

We are awaiting information from the city to document the amount of revenue the city has received from the property tax and from the sales tax collected from fire insurance premiums for 2006, 2007 and 2008 as authorized in RCW 41.16.060, the Prior Act Pension Law.

I want to thank Don Hirschman for inviting the RFFOW to a meeting he arranged for the retired firefighters in the Aberdeen area. He even had control of the weather! It was a beautiful sunny day in Aberdeen. There was a good turnout of about 50 members in attendance. This provided a great opportunity to explain a little about the RFFOW, how we are structured, our membership, our meetings, the Newsletter, elections and past and recent accomplishments. Many of those in attendance were surprised to learn that the Retired Firefighters of Washington (RFFOW) began in 1932 as the Retired Firemen’s Association. The name was later changed to the Retired Firefighters of Seattle and in 1970 when the LEOFF 1 Retirement Act was passed the name and membership was expanded to the Retired Firefighters of Washington.

We reported on current legislation and problems firefighters are facing around the state. The group was delighted to hear that the City of Hoquiam had agreed to pay the LEOFF 1 medical bills for a deceased member as approved by the Gray’s harbor Disability Board. We were able to answer questions and enjoy the coffee and donuts that were provided. Again, thanks to Don and the Gray’s Harbor group for their hospitality.

We received notification from Don Hirschman, Aberdeen, of a retired firefighter, who turned out, much to our surprise, to be a retired Seattle LEOFF 2 firefighter. This retiree, who is not currently a member of the RFFOW, was quite frustrated regarding what he felt was the run-around he was getting from DRS and the Social Security Administration. This was regarding his request to have up to $3,000 withheld from his retirement check and forwarded to Medicare as a pre-tax payment for medical insurance premiums.

His request is based on a provision in the Federal Pension Protection Act passed in 2006. This benefit allows Public Safety Officers to use up to $3,000 from their taxable pension to pay pre-tax for their own and their spouse’s medical insurance premiums. The pension system must, however, withhold the money and forward the payment directly to the particular insurance company. The problem was that Medicare would only accept a quarterly payment and DRS was only able to make a monthly deduction. I am pleased to report that it only took one meeting with DRS for the RFFOW to resolve this issue. Thanks to the cooperation of the new Director of DRS, Steve Hill and his Deputy Director Marcie Frost, the problem will soon be resolved.

I have been informed that a new administrative procedure will be developed to allow for the premiums to be deducted from the member’s monthly check and forwarded to Medicare by DRS. (See Robert Krueger’s letter to Congressman Norm Dicks in this Newsletter. Page 4). Many of you have heard of the Bakenhus vs City of Seattle Lawsuit. I will try to explain the particulars. The following is a brief explanation of the lawsuit.

Summary of Bakenhus vs. City of Seattle
48 Wn.2nd 695; 296 P.2nd 536 (1956)
Pension Benefits Are Contractual Rights

The Washington Supreme Court (the Court) ruled that an employee who accepts a job with a pension plan has entered into a contract with the employer. When the employee becomes eligible to receive the pension, the employer must pay the pension according to the contract. The employee’s pension rights may be changed prior to retirement, but only for the purpose of keeping the pension system flexible and maintaining its integrity. The City of Seattle Could Not Reduce Mr. Bakenhus’ Expected Pension

H D Bakenhus was a retired policeman. When he became a member of the Seattle Police Department in 1925, the law set his pension as one-half the salary for the rank he held during the year just before his retirement. The pension fund law was later changed in 1937 to provide a cap on police retirement pensions.

Mr. Bakenhus became a police captain in 1943 and retained that status until he retired in 1950. For the year before his retirement his salary was $350 a month, which would have given him a monthly retirement pension of $185 per month. At retirement, the city authorized a retirement pension of $125 per month based on the cap that passed in 1937. Mr. Bakenhus sued to force the city to pay him $185 instead of $125. Mr. Bakenhus Prevailed in Court

The trial court ordered the city to pay Mr. Bakenhus the higher pension amount plus the difference between the increased pension and the pension he had received since retirement. The City of Seattle appealed but lost. The Court decided that the 1937 amendment to the pension law impaired the obligation of Mr. Bakenhus’ contract with the city. The 1937 amendment was void as to Mr. Bakenhus (and all who became members of the police department prior to the 1937 enactment). What was the Court’s Reasoning?

The Court agreed with the so called “California rule.” Under this rule, pension provisions are part of the expected compensation set out in the employment contract. Further, contractual pension rights become vested at the time the employee enters public service. This means that when the employee joins the pension plan, he or she has a right to continued membership in the plan under the requirements for receiving benefits, he or she is then entitled to receive a pension according to the vested pension rights.

This does not mean that the employee may never change pension rules. But, the Court was clear that a new limit on contractual pension rights must be justified. For example, a change that removes a benefit might be justified by a showing of a corresponding benefit to those affected by the change. In this case, there had been no showing of a corresponding benefit, and no showing that reducing the benefit was necessary to preserve and perfect the system, or that it bore a reasonable relation to the purpose of the pension plan.

We continually try to help all retired firefighters and spouses regardless of their retirement plan, who are in need of assistance.