WSR 02-01-120

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed December 19, 2001, 8:34 a.m. ]

Date of Adoption: December 13, 2001.

Purpose: The Department of Retirement Systems (DRS) is making enhancements to its definition section in WAC 415-02-030. Words and phrases commonly used in the retirement systems (such as "pop-up") are being added to the definition section, and the definition section itself in some cases will now serve as a small "director" for finding applicable RCWs/WACs. Existing definitions are being revised into language that is easier to understand.

Citation of Existing Rules Affected by this Order: Amending WAC 415-02-030.

Statutory Authority for Adoption: RCW 41.50.050(5).

Adopted under notice filed as WSR 01-22-102 on November 7, 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Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Effective Date of Rule: Thirty-one days after filing.

December 13, 2001

John Charles

Director

OTS-4656.6


AMENDATORY SECTION(Amending WSR 00-10-016, filed 4/21/00, effective 5/22/00)

WAC 415-02-030   Definitions.   ((Unless the context requires otherwise, the following terms shall have the meanings established below:)) This section contains a central location for definitions of words and phrases used in the department of retirement system's rules. It also serves as a directory for finding definitions within the RCWs and WACs.

(1) Accumulated contributions means the sum of all contributions paid into a member's defined benefit account, including interest.

(2) (("))Appeal((")) means the ((process)) proceeding through which a party obtains review of a department action in an adjudicative proceeding ((before the department's presiding officer or hearings examiner under chapter 415-08 WAC)) conducted under chapter 34.05 RCW (the Administrative Procedure Act) and chapter 415-08 WAC (the department's appeal rules).

(((2))) (3) Average final compensation - is defined in RCW 41.32.010(30) (TRS); RCW 41.35.010(14) (SERS); RCW 41.40.010(17) (PERS); and RCW 43.42.120(15) (WSP).

(4) Cafeteria plan means a "qualified" employee benefit program under section 125 of the Internal Revenue Code, such as certain health and welfare plans.

(5) Compensation earnable or earnable compensation definitions can be found in RCW 41.32.010(10) and 41.32.345 (TRS); RCW 41.35.010(6) (SERS); and RCW 41.40.010(8) (PERS).

(6) Contribution rate is:

(a) For employees: The fraction (percent) of compensation a member contributes to a retirement system each month.

(b) For employers: The fraction (percent) of payroll a member's employer contributes to a retirement system each month. Contribution rates vary for the different systems and plans.

(7) Deferred compensation refers to the amount of the participant's compensation which the participant voluntarily defers from earnings before taxes.

(8) Defined benefit plan is a pension plan in which a lifetime retirement benefit is available, based on the member's service credit and compensation.

(9) Defined contribution plan is a plan in which part of members' or participants' earnings are deferred into an investment account in which tax is deferred until funds are withdrawn. The benefit is based on the contribution rate and the amount of return from the investment of the contributions. Members or participants receive the full market rate of return minus expenses. There is no guaranteed rate of return and the value of an account will increase or decrease based upon market fluctuations.

(10) (("))Department((")) means the department of retirement systems.

(((3))) (11) Dependent care assistance salary reduction plan (DCAP) is a plan that allows an eligible employee of the state of Washington to set aside a "before tax" portion of his or her gross salary before federal income and Social Security taxes to be used for the reimbursement of dependent care expenses.

(12) (("))Director((")) means the director of the department of retirement systems.

(((4))) (13) (("))Employee((" under this chapter,)) means a worker who performs labor or services for a retirement systems employer under the control and direction of the employer as determined under WAC 415-02-110(2). An employee may be eligible to participate as a member of one of the state-administered retirement systems according to eligibility requirements specified under the applicable retirement system.

(((5))) (14) Employer is defined in RCW 41.26.030(2) (LEOFF), 41.32.010(11) (TRS), 41.34.010(5) (Plan 3), 41.35.010(4) (SERS), and 41.40.010(4) (PERS).

(15) Final average salary is defined in RCW 41.26.030(12) (LEOFF).

(16) Gainsharing is the process through which members of certain plans share in the extraordinary investment gains on earnings on retirement assets under chapters 41.31 and 41.31A RCW.

(17) (("))Independent contractor((" under this chapter,)) means a contract worker ((providing services under contract to a retirement system employer for remuneration)) who is not under the direction or control of the employer as determined under WAC 415-02-110 (2) and (3).

(((6))) (18) (("))Member((")) means a person who is ((entitled to)) included in the membership ((in)) of one of the retirement systems created by chapters 2.10, 2.12, 41.26, 41.32, 41.34, 41.35, 41.40, or 43.43 RCW.

(((7))) (19) Participant means an eligible employee who participates in a deferred compensation or dependent care assistance plan.

(20) Participation agreement means an agreement that an eligible employee signs to become a participant in a deferred compensation or dependent care assistance plan.

(21) Pension plan is a plan that provides a lifelong post retirement payment of benefits to employees.

(22) (("))Petition((")) means the method by which a party ((secures)) requests a review of an administrative determination prior to an appeal to the director. The department's petitions examiner performs the review under chapter ((415.04)) 415-04 WAC.

(((8))) (23) (("))Plan 1((")) means the retirement plans in existence prior to the enactment of chapters 293, 294 and 295, Laws of 1977 ex. sess.

(((9))) (24) (("))Plan 2((")) means the retirement plans established by chapters 293, 294 and 295, Laws of 1977 ex. sess., and chapter 341, Laws of 1998.

(((10))) (25) (("))Plan 3((")) means the retirement plans established by chapter 239, Laws of 1995 ((and)), chapter 341 Laws of 1998, and chapter 247 Laws of 2000.

(((11))) (26) Pop-up is a term that the department uses to refer to the benefit available to a retiree where the survivor of a retiree receiving a benefit reduced by a survivor option predeceases the retiree. Example: Linda is receiving a retirement benefit reduced by a survivor option for her husband, Joe. Joe dies before Linda. Linda's monthly retirement allowance increases. The department refers to the increase as a "pop-up."

(27) Portability is the ability to use membership in more than one Washington state retirement system in order to qualify for retirement benefits. See chapters 41.54 RCW and 415-113 WAC.

(28) Public record is defined in RCW 42.17.020(36).

(29) Restoration is the process of restoring a member's service credit for prior periods.

(30) (("))Retirement system employer((" means "employer" as defined in RCW 41.26.030(2), 41.32.010(11), 41.34.010(5), 41.35.010(4), or 41.40.010(4), and a "city" or "cities" as defined in RCW 41.44.030(2).)) - see "employer."

(31) Rollover means a distribution that is paid to or from an eligible retirement plan within the statutory time limit allowed.

(32) Separation date is the date a member ends employment in a position eligible for retirement or disability benefit coverage.

(((12) "Worker" means a person who performs services for a retirement system employer either as an employee or as an independent contractor.)) (33) Survivor means a person designated by the member to receive a monthly benefit allowance after the member dies.

(34) The Uniform Services Employment and Reemployment Rights Act of 1994 is the federal law that requires employers to reemploy and preserve job security, pension and welfare benefits for qualified employees who engage in military service.

[Statutory Authority: RCW 41.50.050. 00-10-016, 415-02-030, filed 4/21/00, effective 5/22/00; 94-09-039, 415-02-030, filed 4/19/94, effective 5/20/94; Order 4, 415-02-030, filed 7/27/77.]

Washington State Code Reviser's Office