Proposed Rule Would Drop Pension Discount Rate to 6.1%

The Washington state Department of Labor and Industries will hold a public hearing Jan. 23 on a proposal to drop the rate used to discount reserves for permanent disability pensions, to 6.1%. The discount rate is used to account for annual increases in the value of annuities.  Currently, the department uses a rate of 6.2%, but its actuaries believe the assumed investment return is too high and should be lowered to 4.5%. However, the Workers’ Compensation Advisory Committee developed a plan to gradually reduce the discount rate to avoid a major financial blow that would follow if t...