WSR 14-19-087
[Filed September 16, 2014, 9:16 a.m.]
Subject of Possible Rule Making: Chapter 296-14 WAC, Industrial insurance.
Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 51.04.020, 51.44.070(1), 51.44.080.
Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: The current mortality tables used to determine the funding needs for injured workers who are totally permanently disabled and for survivors of fatally injured workers are over thirty years old. The department conducted a study of pensioned injured workers and their spouses in our system from 2001 to 2012 together with 2000 United States Census data. The study revealed that the pension tables no longer reflect the current experience of pension beneficiaries funded by the pension reserve fund. These tables need to be updated for life expectancy and gender.
The pension discount rate is the interest rate used to account for the time value of money when evaluating the present value of future pension payments. The current pension discount rate of 6.5 percent is too high given market rates of long-term Treasury bonds, which are considered by the actuaries for establishing discount rates. The department has worked with the workers' compensation advisory committee (WCAC) to develop a plan that would reduce the pension discount rate from the current 6.5 percent to 6.4 percent and continue to adjust annually, through 2022, until it reaches 4.5 percent.
The department plans to update the mortality tables and reduce the pension discount rate.
Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.
Process for Developing New Rule: Parties interested in these rules may contact the individual listed below. The public may also participate by commenting after amendments are proposed by providing written comments and/or testimony during the public hearing and comment process. Public hearings will be held after the proposal is filed.
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, Suzy Campbell, P.O. Box 44208, Olympia, WA 98504-4208, phone (360) 902-5003, fax (360) 902-4960,
September 16, 2014
Joel Sacks