Washington State Seeks Pension Changes

Trying to manage rising health care costs, stop pension spiking

Washington state senators proposed changes Wednesday in how government handles retiree medical benefits and pension costs, responding to an Associated Press investigation that documented problems with pre-retirement pay spikes and post-retirement health costs.

Under a bill sponsored by six senators, lawmakers would develop a voluntary risk pool for local governments to help manage the medical costs of the retirees in an old pension system called LEOFF-1. Local jurisdictions are required pay for all the medical expenses of their LEOFF-1 retirees, and the AP reported on how some government budgets were being overwhelmed by the unpredictable and dramatic costs of long-term care.

In one case identified by AP earlier this month, the small city of McCleary was paying $90,000 a year for a single retiree who had in-home care. That is $129 for every household in the city.

(Hat tip to John K. Ross)