WSR 18-21-177
PROPOSED RULES
DEPARTMENT OF
LABOR AND INDUSTRIES
[Filed October 23, 2018, 1:07 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 18-13-107.
Title of Rule and Other Identifying Information: Chapter 296-14 WAC, Industrial insurance—Pension tables, pension discount rate and mortality tables, amending WAC 296-14-8810.
Hearing Location(s): On November 28, 2018, at 1:30 p.m., at the Department of Labor and Industries (L&I), 7273 Linderson Way S.W., Auditorium, Tumwater, WA 98501.
Date of Intended Adoption: December 18, 2018.
Submit Written Comments to: Suzy Campbell, P.O. Box 44250, Olympia, WA 98504-4250, email suzanne.campbell@lni.wa.gov, fax 360-902-9101, by 5:00 p.m. on November 29, 2018.
Assistance for Persons with Disabilities: Contact Tara Osuna, phone 360-902-4252, fax 360-902-6509, TTY 360-902-4252, email Tara.Osuna@lni.wa.gov, by November 19, 2018.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The pension discount rate (PDR) is the interest rate used to account for the time value of money when evaluating the present value of future pension payments. The purpose of this rule making is to lower the PDR using different assumptions for annual investment returns for the reserve funds for self-insured and state fund pension claims, and to align with recent department requested legislation passed in the 2018 session, chapter 282, Laws of 2018, allowing for the department to use different methods of calculating state fund and self-insured liabilities when determining the annuity values of a pension based on the rates of mortality, disability, remarriage, and interest.
This rule making will consider reducing the pension discount rate to 4.5 percent for the state fund and to 6.0 percent for self-insurance.
Reasons Supporting Proposal: See above.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: L&I, governmental.
Name of Agency Personnel Responsible for Drafting: Suzy Campbell, Tumwater, Washington, 360-902-5003; Implementation: Debra Hatzialexiou, Tumwater, Washington, 360-902-6695; and Enforcement: Vickie Kennedy, Tumwater, Washington, 360-902-4997.
A school district fiscal impact statement is not required under RCW
28A.305.135.
A cost-benefit analysis is not required under RCW
34.05.328. L&I is exempt from preparing a cost-benefit analysis under RCW
34.05.328 (5)(b)(vi) since the purpose of this rule making is to set or adjust fees pursuant to legislative standards.
This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:
Is exempt under RCW
19.85.025(3) as the rules set or adjust fees under the authority of RCW
19.02.075 or that set or adjust fees or rates pursuant to legislative standards, including fees set or adjusted under the authority of RCW
19.80.045.
October 23, 2018
Joel Sacks
Director
AMENDATORY SECTION(Amending WSR 18-05-081, filed 2/20/18, effective 4/1/18)
WAC 296-14-8810Pension tables, pension discount rate and mortality tables.
(1) The department uses actuarially determined pension tables for calculating pension annuity values, required pension reserves, and actuarial adjustments to monthly benefit amounts.
(a) The department's actuaries calculate the pension tables based on:
(i) Mortality tables from nationally recognized sources;
(ii) The department's experience with rates of mortality, disability, and remarriage for annuity recipients; ((and))
(iii) A pension discount rate of ((6.1))4.5 percent for state fund pensions;
(iv) A pension discount rate of 6.0 percent for self-insured pensions, including the United States Department of Energy pensions; and
(v) The higher of the two pension discount rates so that pension benefits for both state fund and self-insured recipients use the same reduction factors for the calculation of death benefit options under RCW 51.32.067.
(b) The department's actuaries periodically investigate whether updates to the mortality tables relied on or the department's experience with rates of mortality, disability, and remarriage by its annuity recipients warrant updating the department's pension tables.
(2) To obtain a copy of any of the department's pension tables, contact the department of labor and industries actuarial services.