Date of Adoption: July 11, 2001.

Purpose: In the rule adoption, WSR 01-01-059, effective January 12, 2001, the department made an inadvertent omission in the adoption of WAC 415-111-220 affecting the current contribution rates for its Teachers Retirement System (TRS) Plan 3 retirement plans. DRS adopted an emergency rule on March 27, 2001 (WSR 01-08-026) to correct the error and to add a newly approved provision for the School Employees Personnel System (SERS) Plan 3. The permanent rule also covers the Public Employees' Retirement System Plan 3, which begins on March 1, 2002. The department is also making "plain English" changes.

WERE CHANGES MADE SINCE THE RULE WAS PROPOSED? The text being adopted does not differ from the text of the proposed rule.

SUMMARY OF COMMENTS RECEIVED	THE DEPARTMENT CONSIDERED ALL THE COMMENTS. THE ACTIONS TAKEN IN RESPONSE TO THE COMMENTS, OR THE REASONS NO ACTIONS WERE TAKEN, FOLLOW.
The proposed language refers to completing a "form" but the employer wants to provide a web-based system for the PERS Plan 3 change.	DRS strongly supports a web-based system for Internet administration of the transfer and choice processes. DRS needs to receive the paper form from the member for its records.
The wording appears to require retroactive enrollments.	DRS does not require employers to process retroactive enrollments.
Subsection (5)(b) appears to require a ruling from DRS.	Subsection (5)(b) merely explains the process for correcting reporting errors.

Citation of Existing Rules Affected by this Order: Amending WAC 415-111-220 Defined contribution rate election (now called "How do I choose a defined contribution rate?").

Statutory Authority for Adoption: RCW 41.34.040, 41.50.050(5).

Adopted under notice filed as WSR 01-11-119 on May 22, 2001.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: The earlier effective date is necessary to continue the operation of the defined contribution portions of TRS Plan 3 and SERS Plan 3. DRS adopted an almost identical emergency rule on March 27, 2001 (WSR 01-08-026). The permanent rule must be adopted before the emergency rule expires to prevent a lapse in coverage for numerous plan members.
Effective Date of Rule: July 26, 2001.

July 11, 2001

John Charles

Director

OTS-4749.4

AMENDATORY SECTION(Amending WSR 01-01-059, filed 12/12/00, effective 1/12/01)

WAC 415-111-220   How do I choose a defined contribution rate ((election.))?   ((A Plan 3 member shall)) (1) Contribution rates: If you are a member of the Teachers' Retirement System Plan 3, the School Employees' Retirement System Plan 3, or the Public Employees' Retirement System Plan 3, you are required to contribute from ((his or her)) your compensation according to one of the following rate structures ((described in RCW 41.34.040.

Pursuant to WAC 415-111-110, you bear the responsibility for completing)):

Option A	Contribution Rate
All ages	5.0% fixed
Option B
Up to age 35	5.0%
Age 35 to 44	6.0%
Age 45 and above	7.5%
Option C
Up to age 35	6.0%
Age 35 to 44	7.5%
Age 45 and above	8.5%
Option D
All ages	7.0%
Option E
All ages	10.0%
Option F
All ages	15.0%

(2) How do I make the choice? Under WAC 415-111-110, it is your responsibility to complete the correct form for ((making)) choosing a contribution rate ((election)) and submitting ((it)) the form in a timely manner to your employer as directed on the form.

(((1))) (3) Where do I get the form to make my ((election)) choice? Your employer must provide the appropriate form to ((elect)) choose a contribution rate if you are enrolling ((into)) in Plan 3 or transferring from Plan 2 to Plan 3.

(((2))) (4) When do I have to ((elect a contribution rate)) choose? You must irrevocably ((elect)) choose a contribution rate within ninety calendar days from your date of hire in an eligible position. However, if you are transferring from Plan 2 to Plan 3, you must ((elect)) choose a contribution rate ((when)) at the same time you transfer. The ninety-day period does not apply to a member transferring from Plan 2 to Plan 3.

(5) When do contributions begin?

(a) Once ((a member elects)) you choose a contribution rate, contributions will begin the first day of the pay cycle in which ((the member makes the election)) you make the choice.

(b) If ((it is determined that a member)) the employer advises the department that you should be reported into Plan 3 membership retroactively, the ninety-day period starts from the date it is discovered((, as determined by the department, that the member)) that you should have been reported. The department will decide which date to use.

(((c))) (6) What if I work for more than one employer? If you are a Plan 3 member working in eligible positions for more than one employer, you may select a different contribution rate with each employer.

(((3))) (7) What happens if I do not make a ((contribution rate election)) choice? ((Pursuant to)) Under RCW 41.34.040, you will be irrevocably assigned to Option A if:

(a) You are a new employee or changing your employer, and do not ((make)) choose a contribution rate ((election)) within the ninety-day election period described in subsection (((2))) (4) of this section; or

(b) You are transferring from Plan 2 to Plan 3 and do not ((make)) choose a contribution rate ((election)) at the time of transfer. Contributions required under subsection (a) or (b) ((shall)) will begin ((effective)) the first day of the pay cycle in which you are assigned to Option A.

(((4))) (8) Can I change my contribution rate? Once you elect a contribution rate or are defaulted into Option A, you cannot change your contribution rate unless you change employers. Each time you change employers, you will be allowed the ninety-day period described in subsection (((2))) (4) of this section to ((elect)) choose a new contribution rate. ((For the purposes of this section, employer is defined as each school district and each educational service district.))

[Statutory Authority: Chapters 41.32, 41.34, 41.35, 41.50 RCW. 01-01-059, 415-111-220, filed 12/12/00, effective 1/12/01.]

Washington State Code Reviser's Office