State panel moves to block retire-rehire deals

SEATTLE (AP) — Washington lawmakers should change state law to prevent retire-rehire arrangements among retired firefighters and law enforcement officers, a panel determined Wednesday.

The LEOFF Plan 2 Retirement Board voted unanimously to tighten the rules in order to prevent retirees from drawing both pension and salary after returning to similar jobs. Officials with the board are now drafting language for lawmakers to consider early next year.

An Associated Press story last month showed that special rules in both the LEOFF-1 and LEOFF-2 pension systems allow for retire-rehire arrangements. Steve Nelsen, executive director of the LEOFF Plan 2 Retirement Board, said there was a feeling among board members that some retirees and their employers were exploiting a loophole.

"There was some frustration," Nelsen.

Lawmakers had created the special rules for firefighters and law enforcement officers in order to allow them to make late career changes to less-demanding government jobs. By comparison, many retired teachers are unable to work more than 867 hours a year in a government job without having their benefits disrupted.

Nelsen said the original LEOFF rules weren't meant to allow firefighters and law enforcement officers to return to similar jobs.

The rules are based on eligibility. Workers are eligible for the LEOFF system if they are fully compensated in full-time positions as a law enforcement officer, firefighter or supervisor. LEOFF retirees who return to another LEOFF-eligible position would have pension benefits suspended.

Some have managed to work around those limits by getting jobs that are less than full-time or not fully compensate, meaning they are not technically LEOFF-eligible.

After reviewing the rules earlier this year with state officials, the City of DuPont hired its police chief at 35 hours a week instead of 40, allowing him to draw pension and salary. The police chief in Soap Lake has been able to draw both salary and pension because the mayor told state officials that he was only working 32 hours a week. For three years, a Maple Valley fire chief drew $100,000 a year in salary and a similar amount in pension payments because the position was considered part time.

The revised rules would end pension payments if a LEOFF-2 retiree returns to work in a similar job, no matter how many hours they work, what pay they receive or if it's a contractor relationship.

Nelsen said it's unclear how many workers would be impacted by revising the rules. More than 250 LEOFF-2 workers have returned to government jobs as employees, but the state would need to determine whether those positions are LEOFF-eligible. AP also identified dozens of LEOFF retirees who returned to work as contractors, and those contractor relationships are more difficult for state officials to track.