School districts and educational service districts may, in lieu of monetary compensation, as provided for in WAC 392-136-020, make payment to an organization for postretirement medical benefits when each of the following conditions have been met:

(1) The organization is authorized under law to engage in the receipt and management of moneys for postretirement medical benefits; and

(2) The organization and the employee have furnished a signed statement holding the school district or educational service district harmless for any loss, liability, or damages that may occur arising from making the payment to the organization for postretirement medical benefits.

Moneys paid under this section for postretirement medical benefits shall not be included for the purpose of computing a retirement allowance under any public retirement system in this state.