WSR 02-12-084

PERMANENT RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed June 4, 2002, 2:14 p.m. ]

Date of Adoption: May 31, 2002.

Purpose: WAC 415-04-017 is being amended to provide more information to the public. WAC 415-08-015 is being amended to correct a statutory reference and to make the title more clear. WAC 415-08-420 is being amended to correct a typographical error. WAC 415-108-040 is being repealed because it duplicates the essence of RCW 41.40.068 and is also covered by the appeals chapter, chapter 415-08 WAC. WAC 415-111-450 and 415-501-495 are being amended to eliminate court order requirements prohibited by a court rule, GR 22 (GR 22 can be found online at http://www.courts.wa.gov/rules, under Rules of General Application).

Citation of Existing Rules Affected by this Order: Repealing WAC 415-108-040; and amending WAC 415-04-017, 415-08-015, 415-08-420, 415-111-450, and 415-501-495.

Statutory Authority for Adoption: RCW 41.50.050(5).

Other Authority: RCW 41.50.060, 41.50.770, 41.50.780, chapter 42, Laws of 2001.

Adopted under notice filed as WSR 02-09-055 on April 15, 2002.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 2, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 3, Repealed 1.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 3, Repealed 1.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.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

May 31, 2002

John Charles

Director

OTS-5396.3


AMENDATORY SECTION(Amending WSR 01-18-018, filed 8/24/01, effective 9/24/01)

WAC 415-04-017   What is not covered by this chapter?   You may not use the petition process to request review of administrative decisions that address the following matters, including, but not limited to:

(1) Overpayments if the procedures in RCW 41.50.135 or 41.50.138 apply.

(2) Deferred compensation plan payments because of an unforeseeable emergency (see WAC 415-08-015).

(3) Law enforcement officers' and fire fighters' (LEOFF) Plan 1 appeals of disability board decisions that the LEOFF administrator reviews. For more information about LEOFF Plan 1 disability board appeals, please refer to RCW 41.26.140 (reexaminations of disability beneficiaries), RCW 41.26.200 (right to appeal); WAC 415-104-035 (jurisdiction), WAC 415-104-045 (who can appeal, and deadline), WAC 415-104-050 (how DRS will handle the appeal), and WAC 415-104-060 (records reviewed on appeals).

[Statutory Authority: RCW 41.50.050(5), 41.50.050, 41.50.060. 01-18-018, 415-04-017, filed 8/24/01, effective 9/24/01.]

OTS-5397.3


AMENDATORY SECTION(Amending WSR 96-16-020, filed 7/29/96, effective 7/29/96)

WAC 415-08-015   ((Appeal of denial for pay out of accumulated deferred compensation deferrals.)) Appealing a denied request for an in-service deferred compensation withdrawal.   WAC ((415-524-010)) 415-501-510 and Section 457 of the Internal Revenue Code authorize ((pay outs)) distributions from the deferred compensation plan due to an unforeseeable emergency. If your application for a pay out is denied, you are entitled to have that decision reviewed.

(1) Filing deadline. You must apply for review in writing within sixty days of the date you receive the denial.

(2) Contents of review application. Your application must contain the items listed in WAC 415-08-023.

(3) Type of proceeding. Within twenty days of receipt of your application, the department will notify you in writing that it will conduct either:

(a) A brief adjudicative proceeding under RCW 34.05.482 through 34.05.494; or

(b) A full adjudicative proceeding under this chapter.

(4) Brief adjudicative proceeding.

(a) The director's designee will serve as presiding officer. The presiding officer will:

(i) Review the agency's view of the matter, as expressed in the documentation denying your request for a withdrawal;

(ii) Review the materials you have previously submitted, as well as any additional material you wish to submit;

(iii) Give each party an opportunity to be informed of the other's view of the matter;

(iv) Make a decision on the request; and

(v) Within ten days, give the parties a brief written statement of the reasons for the decision and information about any internal review available.

(b) If the presiding officer makes an unfavorable determination in your case, you may request an administrative review provided you do so within twenty-one days after you are served with the presiding officer's written determination. If you seek administrative review, the reviewing officer will be a different person than the presiding officer.

(c) If you do not seek administrative review, you may seek judicial review within thirty days after you are served with the written determination (see RCW 34.05.542).

(5) Full adjudicative proceeding. If the department conducts a full adjudicative proceeding, that proceeding will be governed by the Administrative Procedure Act((,)) (chapter 34.05 RCW), and rules adopted thereunder; and chapters 10-08 and 415-08 WAC. The department will be represented in the proceeding by an assistant attorney general.

[Statutory Authority: RCW 41.50.050 and 41.50.780(11). 96-16-020, 415-08-015, filed 7/29/96, effective 7/29/96.]

OTS-5544.1


AMENDATORY SECTION(Amending WSR 96-11-036, filed 5/7/96, effective 6/7/96)

WAC 415-08-420   Presentation of evidence -- Burden of proof.   (1) The presiding officer shall determine the proper order of presentation of evidence.

(2) The person appealing or requesting a hearing((s)) shall have the burden of proof in the matter.

[Statutory Authority: RCW 41.50.050, 41.50.060 and 34.05.425. 96-11-036, 415-08-420, filed 5/7/96, effective 6/7/96. Statutory Authority: RCW 41.50.050(5) and 34.05.250. 93-11-079, 415-08-420, filed 5/18/93, effective 6/18/93; Order 4, 415-08-420, filed 7/27/77.]

OTS-5556.2


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 415-108-040 Appeals -- Disability cases.

OTS-5486.2


AMENDATORY SECTION(Amending WSR 02-03-120, filed 1/23/02, effective 3/1/02)

WAC 415-111-450   How does a court-ordered division of property affect my Plan 3 account?   (1) The department will honor orders that provide for a property division of your retirement benefit only if the order:

(a) Is entered by a court of competent jurisdiction;

(b) Is filed with the department within ninety days of the order's entry by the court;

(c) Establishes the right of a separated or former spouse to a portion of your retirement benefit;

(d) Provides the name((, address,)) and date of birth((, and Social Security number)) of the separated or former spouse; and

(e) Incorporates the following statutory language in RCW 41.50.670(2) in which the first paragraph pertains to your defined benefit account and the second paragraph pertains to your defined contribution account (emphasis added):

If . . . . . . (the obligor) receives periodic retirement payments as defined in RCW 41.50.500, the department of retirement systems shall pay to . . . . . . (the obligee) . . . . . . dollars from such payments or . . . . . . percent of such payments. If the obligor's debt is expressed as a percentage of his or her periodic retirement payment and the obligee does not have a survivorship interest in the obligor's benefit, the amount received by the obligee shall be the percentage of the periodic retirement payment that the obligor would have received had he or she selected a standard allowance.

If . . . . . . . . (the obligor) requests or has requested a withdrawal of accumulated contributions as defined in RCW 41.50.500, or becomes eligible for a lump sum death benefit, the department of retirement systems shall pay to . . . . . . . . (the obligee) . . . . . . . . dollars plus interest at the rate paid by the department of retirement systems on member contributions. Such interest to accrue from the date of this order's entry with the court of record.

(2) You must provide the address and Social Security number of both you and your separated or former spouse to the department before the department will honor a domestic relations order (DRO). This information can be submitted in a cover letter, in another document, or by other means arranged with the department.

(3) Periodic retirement payments under RCW 41.50.670(2) (paragraph 1). If the property division order requires the department to pay a portion of your "periodic retirement payments" to your separated or former spouse, the department will pay the required portion (((if any))) out of your periodic defined benefit payments.

(a) If you die before periodic retirement payments begin, the department's obligation to pay a portion of your periodic payments to your separated or former spouse ceases.

(b) If your separated or former spouse dies before your periodic retirement payments begin, the department will pay you the full amount of your periodic retirement allowance.

(((3))) (4) Distribution (withdrawal) of accumulated contributions or lump sum death benefit under RCW 41.50.670(2) (paragraph 2). If the property division order requires the department to pay a portion of a distribution of "accumulated contributions" or a portion of a "lump sum death benefit" to your spouse or former spouse, the department will pay the required portion (if any) out of your defined contribution member account, subject to the provisions in this rule.

(((4))) (5) Provisions for management of accounts:

(a) When the property division order is filed with the department, the department will create a separate account and transfer the amount specified in the order from your defined contribution member account into the new account.

(b) Your separated or former spouse assumes the responsibility to manage the separate account, consistent with the requirements in subsection (((6))) (7) of this section, but may not contribute to the account.

(c) You retain the responsibility to manage the funds remaining in your defined contribution account, and may continue to contribute to the account.

(d) If your separated or former spouse dies before you request a distribution, the money in the separate account will be transferred back into your defined contribution account.

(((5))) (6) Distribution provisions.

(a) When you request a distribution from your defined contribution account:

(i) The money in your defined contribution account will be disbursed to you pursuant to your distribution choice.

(ii) Your separated or former spouse (if living) must begin distribution(s) from the separate account pursuant to the distribution options in WAC 415-111-310. (However, if your separated or former spouse has died prior to your request for distribution, the money in the separate account will have been transferred back into your defined contribution account under subsection (((4))) (5)(d).)

(iii) If you die before the money in your defined contribution account is fully disbursed, the balance of the account will be paid to your designated beneficiary(ies).

(iv) If your separated or former spouse dies before the money in the separate account is fully disbursed, the balance of the separate account will be paid to the beneficiary(ies) designated by your separated or former spouse for the separate account.

(b) If you die before receiving a distribution from your defined contribution account:

(i) Your beneficiary(ies) must apply for the lump sum death benefit from your defined contribution account; and

(ii) The money in your defined contribution account must be paid to at least one of your designated beneficiary(ies); then

(iii) Your separated or former spouse (if living) must begin distribution(s) from the separate account pursuant to the distribution options in WAC 415-111-310. (However, if your separated or former spouse has predeceased you, the money in the separate account will have been transferred back into your defined contribution account under subsection (((4))) (5)(d).)

(((6))) (7) In managing the separate account pursuant to subsection (4)(b) of this section, your separated or former spouse may:

(a) Transfer money between investment programs (state-managed or self-directed); and

(b) Transfer money among the investment options in the self-directed program (SELF).

(((7))) (8) If you and your former spouse filed a property division order with the department while you were a member of Plan 2 and you later transfer to Plan 3, at the time of your transfer, the department will create a separate account. The department will comply with the property division order as provided in this rule.

[Statutory Authority: RCW 41.50.050(5), 41.50.670 through 41.50.720. 02-03-120, 415-111-450, filed 1/23/02, effective 3/1/02.]

OTS-5487.3


AMENDATORY SECTION(Amending WSR 02-01-121, filed 12/19/01, effective 1/1/02)

WAC 415-501-495   Domestic relations orders.   (1) The department will honor certain domestic relations orders (DRO) entered by a court of competent jurisdiction.

(2) The department will honor a DRO only if it:

(a) Establishes a right of a spouse or former spouse to a portion of a participant's deferred compensation account pursuant to a division of property;

(b) Clearly states either the dollar amount or a percentage of the account ((on a specific date)) to be transferred to the account of the spouse or former spouse from the participant's account; and

(c) Provides the name((, address,)) and date of birth((, and Social Security number)) of the participant and the spouse or former spouse.

(3) You must provide the address and Social Security number of both you and your separated or former spouse to the department before the department will honor a DRO. This information can be submitted in a cover letter, in another document, or by other means arranged with the department.

(4) To implement a DRO, the department will establish a separate account for the spouse or former spouse in the amount specified in subsection (2)(b) of this section. The amount will initially be invested in the savings pool. Thereafter, the spouse or former spouse may provide investment instructions under WAC 415-501-450.

(((4))) (5) The participant's spouse or former spouse may choose a method of distribution, including a direct rollover.

(((5))) (6) If a DRO filed with the department prior to January 1, 2002, provides that distribution to the former spouse is not available until the participant separates from service, the department will comply with the express terms of the order unless it is subsequently amended.

[Statutory Authority: RCW 41.50.050(5), 41.50.030(2), 41.50.088(2), 41.50.770, and 41.50.780, 26 U.S.C. (Internal Revenue Code) and related tax regulations. 02-01-121, 415-501-495, filed 12/19/01, effective 1/1/02. Statutory Authority: RCW 41.50.770, [41.50.]780 and 41.50.050. 00-11-104, amended and recodified as 415-501-495, filed 5/18/00, effective 6/18/00. Statutory Authority: RCW 41.50.050. 98-20-047, 415-512-095, filed 9/30/98, effective 10/31/98.]

Washington State Code Reviser's Office