The LEOFF 1 Medical Benefits Study Group met on August 25, 2009.

This meeting was the third meeting in Phase 2 of the study. Phase 1 consisted of developing a “fact book” that could generally be accepted by all committee members as an accurate representation of the LEOFF 1 pension plan. The group spent slightly over a year developing that information and the book was finished and released on July 3rd. For a copy of the study, click here.

The August 25th meeting produced no solution to the problem faced by a few cities, counties and fire districts in meeting their LEOFF 1 medical obligations.

In quick review, the group generally agreed to the following:

• The LEOFF 1 Pension Benefit Trust is not available as a funding source.
• The local governments are not prepared to ask for any special fees or taxing authority to assist them in meeting the obligation. The political realities simply prohibit seeking any new taxes.
• The best available option is the development of some sort of insurance pool in which all interested jurisdictions can participate and thereby develop a better group rate for coverage.
• No consideration is being given to the consolidation of Disability Boards.

The August 25th meeting essentially closed Phase 2 and the study. The group agreed that it would not meet again unless some issue or proposal developed. A tentative meeting was set for March of 2010 to review and possible legislation developed in the upcoming session.

This was an interesting meeting as we had presentations from Matt Smith, the State Actuary and Dennis Martin of the State Healthcare Authority. Matt Smith reviewed the financial status of the pension plan and Dennis Martin discussed insurance plans available under the Public Employee Benefit Board.

The two presentations revealed that the LEOFF 1 pension plan is “healthy” but facing difficult times if the economy and financial markets do not recover within a reasonable period. Also, we determined that while the PEBB insurance plan is less costly than many of the commercially available options, it is not generally available to government agencies for LEOFF 1 medical benefit coverage. Additionally the only long-term care option available is the standard John Hancock plan.

The report from Matt Smith was interesting but it clearly revealed that there is little chance that the Pension Benefit Trust will ever again be an attractive target for the AWC or other groups seeking to utilize pension surpluses for medical benefits.

I have written a separate article reviewing Matt’s presentation. I suggest you read it as it will give you a better understanding of just what a “surplus” is or is not.