A review of some of the recent happenings at state agencies and advisory committees that may impact local government HR and labor relations.

Dept. of Retirement Services

Select Committee on Pension Policy
The Select Committee on Pension Policy is considering proposals for addressing the additional need for COLAs for PERS Plan 1 recipients. As readers know, the Legislature has occasionally issued one time cost-of-living adjustments for plan 1 retirement recipients since there is no automatic COLA built into the plan 1 systems. Public employers pay for these additional COLAs for current retirees the unfunded actuarial liability surcharge added to current plan contribution rates.

One proposal the Select Committee is looking at would be based off of SB 5698 (2022), which would have provided an annual COLA for plan 1 up to 3% per year and would be funded through an additional employer supplemental rates. The committee is looking at that previous unpassed bill because an actuarial analysis was done for the bill and gives the committee a picture of what an automatic COLA would cost. In this case of a SB 5698-like proposal, it would likely cost local governments around $1.6 billion over the next 10 years.

The Committee also heard about other COLA options including continuing with ad hoc COLAs granted by the Legislature or reducing the cost of an automatic COLA by lowering the percentage or modifying eligibility for retirees.

The Select Committee is meeting again on October 18 at 10:00am, and they plan hear more about the potential options for plan 1 COLAs in that meeting. If you wish to participate, you can find the link to the meeting and the agenda here.

LEOFF 2 Board
The LEOFF 2 board held a meeting on September 28 where they discussed DRS’s benchmarking, a report on survivor option re-elections, some new public records requests at DRS requesting data on retirees from the Seattle Times, Freedom Foundation, and American Transparency/Open the Books. The Board also discussed DRS’s process for informing public employees and retirees that a request has been made and what information is subject to the request. You can see the rest of the materials and listen to an audio recording of the meeting here.

The next LEOFF 2 Board meeting is October 19 at 9:30 am.

Employment Security Dept.

PFML Advisory Committee
The Paid Family & Medical Leave Advisory Committee met on September 15. You can find the meeting materials here. The Committee discussed the ongoing issues the PFML program is having regarding cash flow, and the PFML fund was in a negative balance for 15 days in July before the new round of employer collected premiums were delivered to the fund. Staff expects another period of negative balance in mid-October. The cash flow issue is partially caused by the way the program is structured and how premiums are collected – namely, premium rates legally can’t include funding a reserve and premiums are only delivered to the program once per quarter so the program has to draw down the previous quarter’s balance to pay current active benefits.

The Committee discussed ESD’s efforts to bring down the lag time between when someone submits an application for PFML benefits and when their first payment is sent. There is currently an average 4 week wait between application submission and first payment, down from and average 4.6 weeks a year ago. ESD Staff also reviewed also reviewed ESD’s decision packages submitted to the Governor, including a request for PFML staff increases, a new outreach program for the Leave & Care division, and request for funding to complete the second phase of the WA Cares Fund rollout.

The next PFML Advisory Committee meeting will be on October 20 from 9:00-11:00am. You will be able to find the meeting information here if you wish to participate.

PFML Premiums Task Force
The Legislative Task Force on Paid Family & Medical Leave Insurance Premiums was created by legislation last year and is aimed at exploring options at addressing the program’s cash flow issues. The Task Force met on September 22 and the members where the members got a briefing on the PFML program as a whole and the issues and trends driving the recent shortfalls.

On October 7, task force members heard the presentation of the state’s actuarial report on the state of the PFML program. The actuaries found that the PFML fund balance has greatly decreased since the program began, and they expect the program to be in deficit at the end of 2022. The actuary found that the current 0.6% premium (which is the statutory cap) is not adequate to fund the program and that a rate of 0.79% would be needed for the program to overcome cash flow problems. ESD thinks an even higher rate may be needed. The actuary also recommends establishing a target fund balance for the PFML fund, which is not currently required. The Associated Press has a good overview of the meeting.

You can find meeting materials and the recordings of the September 22 and October 7 meetings here. The next meeting is scheduled for November 22 from 2:30-5:00pm where individual task force members will bring forward their ideas to include in the task force’s recommendations to the Legislature.

LTSS Trust (WA Cares Fund) Commission
The Long-term Services and Supports Trust Commission (LTSS) met on September 13. The Commission heard internal workgroup reports on different options for benefits portability out-of-state, improving benefits eligibility and recommendations for doing so, and proposals for requiring exempted employees to recertify that they maintain alternative long term care coverage to maintain their exemption. The report also included a recommendation to allow previously exempted individuals a one-time opportunity to reenter the WA Cares Fund program, to expire in 2028.

The Commission also got a primer on an actuarial study of the WA Cares Fund that is set to be completed in the end of October. The actuaries will present their findings at the next Commission meeting. WA Cares Fund staff also reported on the changes made to WA Cares Fund during the last legislative session the implementation of those changes.

The next Commission meeting is scheduled for November 10 from 8:30-11:30am. You can find the meeting information here when its available.

UI Advisory Committee
The Unemployment Insurance Advisory Committee (UI) met on September 27. You can find the meeting materials here. The committee heard agency staff’s report on ESD’s agency request legislation for the 2023 session. ESD’s request legislation include bills to remove the required review of availability issues during UI appeals and to extend flexibility of job search monitoring requirements to allow UI applicants alternative ways for them to comply with the requirement that they be actively seeking work.

The next Committee meeting is scheduled for October 19 at 10:00am. You can participate in the meeting here.

Dept. of Labor & Industries

Workers’ Comp Advisory Committee
The Workers' Comp Advisory Committee met on September 28. The Committee heard reports on Small Business Outreach Contracts, general updates, and agency legislation and decision packages. Agency request legislation includes bills to allow psychologists to be considered attending providers for workers’ comp mental health only claims, creating a self insurance reserve fund, updating references for plumbers in state labor laws, removing in state work requirements for L&I electrical inspectors, and changes to the Factory Assembled Structures program at L&I. L&I is also requesting additional budget provisos for enhanced workers’ comp training and provider support, system modernization costs, and additional funds for various equity programs at L&I. Committee members also heard a report on L&I’s proposed 2023 rate changes.

The next meeting will be held on December 8.

Heat & wildfire smoke rulemakings
As we noted in June, work is continuing on permanent wildfire smoke and outdoor heat exposure rules at L&I.

You can find L&I’s proposed permanent Wildfire Smoke rule here. The agency is held a number of in-person meetings around the state in early October to discuss the proposed rule with stakeholders. They are also holding a catch-all Zoom meeting on October 13 from 1:00-4:00pm. You can find the meeting information and the link here if you want to participate.

The proposed outdoor heat exposure rule can be found here. The most recent stakeholder meeting was on August 31, meeting materials can be found here. There currently are no new stakeholder meetings scheduled.