Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Survivor Benefits topic
No spam. Unsubscribe anytime.
Board asks for final pricing of two options on catastrophic-disability survivor benefits
Summary
After a comprehensive briefing, the LEOFF Plan 2 board asked staff and the actuary to return in December with costs and a final recommendation for two policy options: (1) base survivor benefits on the member's pre-offset benefit at retirement, and (2) consider refunding survivor reductions if an eventual death is later found duty related.
The board on Sept. 24 directed staff to return with a final briefing in December that includes actuarial pricing of two policy options for survivor benefits of catastrophic-disability retirees.
Jacob White presented a comprehensive review of how the Department of Retirement Systems has applied survivor benefits for members who retire with catastrophic disability. He told trustees DRS recently adopted an administrative practice that bases survivors' benefits on the duty-disability amount rather than the 70% minimum catastrophic formula the retiree might be receiving before offsets. White said DRS also currently does not refund survivor reductions a catastrophic disability retiree took if the retiree's later death is found duty related.
Why it matters: Depending on which formula the survivor benefit is based on and whether reductions are refunded, the survivor can receive materially different monthly payments. The board asked staff to analyze two options and present prices and retroactivity scenarios at the December meeting.
The options the board asked priced
Option 1 (status quo): DRS practice remains in place — survivor benefits based on the duty-disability amount and no refund of survivor reductions if a later death is found duty related.
Option 2: Base the catastrophic-disability survivor benefit on the benefit the member qualified for at the time of retirement before offsets (that is, the 70% minimum or the duty-disability benefit, whichever applied at retirement). White told the board this restores to the retiree and survivor the full survivor-option symmetry that non-catastrophic retirees have when they select a 100% survivor at retirement.
Option 3 (add-on): Refund survivor reductions that catastrophic-disability or other disability retirees paid if the retiree's subsequent death is later determined to be duty related. White presented this as a potential add-on to either option 1 or 2 and warned it would have a measurable cost to the plan.
Board direction and next steps
A board member moved that staff prepare a final December briefing that evaluates Option 2 with pricing and also includes the cost of Option 3 (refunds) for the board to consider. The motion was seconded and carried by voice vote. Staff will work with the actuary and DRS to produce price estimates, and the board will consider those amounts at the December meeting.
Scope: White reported there are 67 catastrophic-disability retirees and 23 who currently receive the 70% formula; some retirees receive the duty-disability formula because offsets reduce their 70% formula below the duty-disability amount. The board did not adopt any immediate policy changes on Sept. 24; it requested actuarial pricing and retroactivity scenarios for December.
