Subject of Possible Rule Making: The department originally filed a preproposal statement of inquiry on March 28, 2001 (WSR 01-06-037). We are now filing a new preproposal statement of inquiry because the scope of the rule making was expanded in the preliminary development process.

     Definitions, calculations of actuarial adjustments, pension tables for calculating various annuities and reserves for injured workers, dependents, beneficiaries and crime victims and Social Security offset.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 51.04.010, 51.04.020(1), 51.32.067, 51.32.220(6), 51.32.225, and 51.44.070.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: For many years, the Department of Labor and Industries has established pension reserves and benefit reduction amounts required in RCW 51.44.070(1), and the annual experting required in RCW 51.44.080, by using actuarial assumptions originally established by the Office of the Insurance Commissioner. These assumptions have not changed since responsibility for these decisions was moved from the Office of the Insurance Commissioner to labor and industries. Labor and industries believes the impact of proposed changes in these assumptions requires rule adoption as defined in the Administrative Procedure Act.

     The subject of possible rule making includes the pension tables used to calculate various pension annuities and reserves. If changes in these pension tables are adopted, they would be in the form of rules and would be codified in chapter 296-600 WAC, Industrial insurance. The rules would apply to new pension reserve calculations for totally permanently disabled workers and on-the-job fatality survivors of Washington state fund employers and self-insured employers and to similarly entitled individuals under the crime victims compensation program. These rules would also include calculations and definitions concerning benefit adjustments for injured workers who also receive Social Security disability or retirement benefits (commonly referred to as Social Security offset).

     By establishing these changes as rules, the public will have an opportunity to comment on their potential impact. The changes are necessary to maintain appropriate reserve levels for pension recipients.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: Social Security Administration (SSA). The proposed rules covering simultaneous Social Security and worker's compensation entitlements will be shared with SSA.

     Process for Developing New Rule: Labor and industries will begin the rule development process by drafting proposed changes in the assumptions relative to pension reserves and ensuring these changes conform to accepted actuarial principles. Labor and industries will share the draft proposal with the stakeholders and other interested parties including the Workers' Compensation Advisory Committee. A public hearing to be held in Tumwater after the rule filing.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting Department of Labor and Industries, Valerie Grimm, Administrative Regulations Analyst, P.O. Box 44208, Olympia, WA 98504-4208, (360) 902-5005, fax (360) 902-4960. Interested parties should contact Valerie Grimm and ask to receive copies of the proposed rules and to be notified of the public hearing date. At that time, they will also receive information on how to submit written comments.

June 20, 2001

Gary Moore

Director

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