What is Retro (Retrospective Rating)

BENEFITS OF GROUP RETRO
ADVANTAGES OF AGC's PROGRAM COMPARED TO OTHER GROUP RETRO PROGRAMS

Retrospective Rating is a financial incentive program offered by the Department of Labor and Industries (LNI) which provides employers an opportunity to receive a substantial refund of their industrial insurance premiums. Currently, 49% of State Fund insured employers participate in a Retro program. Those employers who are committed to safety and to accommodating injured employers with light duty will be the most successful. These efforts not only reduce claims costs and facilitate higher refunds, but reduce the company's experience modification premium rate.

Benefits of Group Retro

Participation in a group program spreads your risk over a larger population. In an individual program if your losses exceeded your premium (after the LNI factors based on the risk you chose to assume are applied), you would be charged a penalty. In the AGC Group Retro program, if your losses exceed your penalty, you are not assessed a penalty. We put companies on notice if they have two negative years and work to help them identify any trends in their losses for purposes of assisting them in targeting their safety efforts. Members also re-qualify each year based on an analysis by an Independent Underwriter of their three-year premium and loss history, as well as their Safety Team^® qualification, participation in AGC Retro claims management, return to work light duty efforts, and thirty day kept on salary policy.

Refund Potential

Your Retro Refund potential is higher in a group Retro program due to the LNI loss conversion factor applied to the refund calculation that is based on the group premium and the premium the group risks in the event of a penalty. As AGC's group premium is approximately $30 million, the LNI loss conversion factor is .818; therefore our group is charged 80% of the developed losses as opposed to 100%. In addition, AGC distributes the refund 75% based on individual performance and 25% based on the company's contribution of premium to the refund. As a result of the distribution formula and the LOW administrative fees (only 6% of the refund), AGC members have received refunds as high as 75% of their LNI premium.

Advantages of AGC's Program compared to other Group Retro Programs.

Group Size

AGC is the largest commercial construction Retro group in WA with 262 members representing approximately $30 million in premium.

Underwriting

ALL AGC Retro members must RE-QUALIFY each year based on achievement of AGC Safety Team® membership, three-year premium and developed loss history trend, light duty & 30-day kept on salary efforts, as well as, their coordination and cooperation with AGC Retro and Safety staff regarding claims and safety issues.

Underwriting is performed by three parties: 1) an Independent Underwriter, H. P. Sargent, Jr., CPCU, ARM, who reviews the trend in the LNI three-year Premium and Loss History Report, 2) AGC Retro Director who conducts in-person interviews for applicants and annually reviews member participation in return to work, kept on salary, and Safety Team®, and 3) the AGC Retro Committee.

Governance

AGC Group Retro is governed by a committee. The committee is composed of eight members representing 8 different companies enrolled in the AGC Group Retro Plan.

The members include 4 Chief Financial Officers and/or Principals and 3 Safety Directors:

• Van Hardy, Vice President and CFO, GLY Construction (CHAIR)
• Gary Bennett, CFO, Ferguson Construction (VICE CHAIRMAN)
• Philo Hall, CFO, Lease Crutcher Lewis
• Stephen Seger, Safety Director, Foushee & Associates, Inc.
• Jay Meyers, Garco Construction (Inland AGC)
• Randy Zutter, Paras General Contracting, Inc. (Inland AGC)
• Valerie Whitman, Max J. Kuney Company
• Len Zarelli, President, Merit Company

The committee meets QUARTERLY. The committee meetings are OPEN to any AGC Group Retro member.

Performance

AGC Retro members have received refunds as high as 75%. Historically, members have received refunds at or over 70% in 3 of the last 6 years, refunds at or over 60% in 7 years, and refunds at or over 50% in the last 10 years. Only one other program can boast a higher Group Refund, but the real question is: "What are you receiving back?" AGC's program was set up as a service for AGC members and not for profit to the association. Administrative fee's are the lowest of any other Group Retro program.

Fees

A one-time $2000 refundable deposit with no quarterly fees! Administrative costs are 6% of the group refund.

Member Shared Commitment

Companies are serious about safety and must qualify into the AGC Safety Team®. Safety Team® qualification involves a job-site and paperwork audit to ensure companies meet or exceed LNI safety standards. Members must also have a return to work light duty policy and agree to keep injured workers on salary for a minimum of 30 days, as well as work with AGC Retro claims consultants for a "team" approach to resolving claims. Members also meet quarterly at Retro Think Tanks to discuss their current claims and exchange best loss control practices.

Refund Distribution

The refund formula is incentive-based and allocated 75% on individual performance & 25% based on premium contributed to the refund. This ensures those members who spend money upfront on safety incentive programs, kept on salary practices, light duty return to work efforts, etc., receive their highest refund potential!

Return to Work Services

AGC has the most advanced temporary transitional return-to-work services in the state through our contract with Safety Educators, Inc. Both Labor and the Department of Labor and Industries (LNI) recognize the program as viable temporary light duty. We have four venues located throughout the state: Seattle, Tacoma, Spokane and Everett. We also contract with FACT Consulting to operate a separate venue in Yakima.

Activities can be designed for the individual to include: First Aid/CPR certification, Flaggers Certification (MUTCD), GED Preparation and no-cost testing, OSHA 10-hour Construction Safety Course, CDL Preparation for written testing, LNI Safety & Loss Control Workshops, review and update of your company safety manual, instruction on the construction codes and WISHA regulations, etc.

For injured employees restricted from travel, or for employers desiring to have the employee at their office, we have the same materials in a portable format available for use at any location. AGC Retro staff send the job analysis & list of duties to the doctor, the job offer letter to the worker via certified mail (including directions to the Resource Center) and also advise the Resource Center Facilitator of the person's upcoming attendance.

Retraining Programs

If workers are not released to return to their job of injury and do not have transferable skills in a sedentary job, they may be entitled to LNI vocational retraining benefits. In order to provide people injured in the trades with an opportunity to remain in the industry they enjoy while enabling them to earn a more comparable salary. Safety Educators, Inc. has three retraining programs approved by LNI: Safety Coordinator, Assistant Project Manager, and Building Inspector. These programs involve classroom and on-the-job training (OJT). The Building Inspector position involves an OJT with the Department of Labor and Industries.

On the Job Retraining Opportunities

If you are interested in providing on-the-job training for a student, please contact Thom Willson @ 253.219.4765 or 253.847.7228. The benefit to you in offering an OJT:
 
• The opportunity to assist someone injured in the trades with an opportunity to remain in the industry.
• On-site labor at a reduced rate. LNI pays the difference in wages in what is called Loss of Earning Power (LEP) benefits.
• Indemnification in the event the person sustains a new injury or aggravates their old injury in the course of their employment with you (via the LNI Preferred Worker Program) for up to three years.
• Low LNI costs for up to three years via the Preferred Worker Program. You only pay the Supplemental Pension Fund for the person's hours and do NOT pay the Accident Fund or the Medical Aid Fund premium.
• The person participating in the OJT doesn't have LNI Medical Aid premium taken from their paycheck for up to three years.
  
  While there is no obligation for you to hire the person once the retraining is complete, you do get to see first hand what a potential new hire can do.