WSR 02-21-025

EXPEDITED RULES

DEPARTMENT OF

RETIREMENT SYSTEMS

[ Filed October 10, 2002, 8:44 a.m. ]

Title of Rule: WAC 415-112-230 Failure to make final payment to establish credit and 415-02-380 Survivor options factors.

Purpose: WAC 415-112-230 is a teachers' retirement system rule regarding payments to buy back service credit; and WAC 415-02-380 is an actuarial WAC that explains how the department determines the amount to pay survivors, and provides the tables necessary for the calculations.

Statutory Authority for Adoption: RCW 41.50.050(5).

Statute Being Implemented: For WAC 415-112-230 is RCW 41.32.310; and for WAC 415-02-380 is chapter 41.45 RCW.

Summary: WAC 415-112-230, the last three words are being deleted because sometimes funds are returned directly to members, but other times the funds are returned to an institution. "A member" is being changed to "you" to be consistent with other changes being made to other department WACs. WAC 415-02-380 is being changed to correct a typographical error in the original, in which the captions on Tables 11 and 12 were accidentally reversed.

Reasons Supporting Proposal: The change to WAC 415-112-230 is needed to support current business practices. The change to WAC 415-02-380 is being made to correct a typographical error.

Name of Agency Personnel Responsible for Drafting and Implementation: Merry A. Kogut, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7291; and Enforcement: Lucille Christenson, P.O. Box 48380, Olympia, WA 98504-8380, (360) 664-7069.

Name of Proponent: Department of Retirement Systems, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose, Summary, and Reasons Supporting Proposal above.

Proposal Changes the Following Existing Rules: See Purpose, Summary, and Reasons Supporting Proposal above.

NOTICE

THIS RULE IS BEING PROPOSED UNDER AN EXPEDITED RULE-MAKING PROCESS THAT WILL ELIMINATE THE NEED FOR THE AGENCY TO HOLD PUBLIC HEARINGS, PREPARE A SMALL BUSINESS ECONOMIC IMPACT STATEMENT, OR PROVIDE RESPONSES TO THE CRITERIA FOR A SIGNIFICANT LEGISLATIVE RULE. IF YOU OBJECT TO THE USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Merry A. Kogut, Department of Retirement Systems, P.O. Box 48380, Olympia, WA 98504-8380, merryk@drs.wa.gov , AND RECEIVED BY 5:00 p.m. December 23, 2002.


October 4, 2002

Merry A. Kogut

Rules Coordinator

OTS-5935.1


AMENDATORY SECTION(Amending Order IV, filed 2/15/78)

WAC 415-112-230   Failure to make final payment to establish credit.   When ((a member)) you enter((s)) into an arrangement to establish or reestablish additional credit for previous service and fail((s)) to make the final payment within the time limit established by law, such arrangement is terminated, and any payments made for such service credit shall be returned ((to the member)).

[Statutory Authority: RCW 41.50.050(6) and 41.50.090. 78-03-023 (Order IV), 415-112-230, filed 2/15/78. Formerly WAC 462-20-020.]

OTS-5955.1


AMENDATORY SECTION(Amending WSR 02-18-048, filed 8/28/02, effective 9/1/02)

WAC 415-02-380   Survivor options factors.   (1) What is a "surviving beneficiary"? A surviving beneficiary is a person you designate when you retire who will receive benefit payments for the duration of his or her life, beginning at your death.

(2) Will selecting a surviving beneficiary affect my retirement benefits? Yes. Retirees who select a surviving beneficiary retirement option receive smaller benefit payments upon retirement than those retirees who do not select this option.

(3) Does it matter if I am married? Yes. If you are married, you must provide your spouse's written consent to the option you select. If you are married, and you and your spouse do not give written consent to an option, the department will pay you a joint and fifty percent survivor benefit and record your spouse as the beneficiary. For details, please review:

LEOFF Plan 2: RCW 41.26.460(2) WAC 415-104-211 and 415-104-215
PERS Plan 1: RCW 41.40.188(2) WAC 415-108-324 and 415-108-326
PERS Plan 2: RCW 41.40.660(2) WAC 415-108-324 and 415-108-326
PERS Plan 3: RCW 41.40.845(2) WAC 415-108-324 and 415-108-326
SERS Plans 2/3: RCW 41.35.220(2) WAC 415-110-324 and 415-110-326
TRS Plan 1: RCW 41.32.530(2) WAC 415-112-710 to 415-112-727
TRS Plan 2: RCW 41.32.785(2) WAC 415-112-710 to 415-112-727
TRS Plan 3: RCW 41.32.851(2) WAC 415-112-710 to 415-112-727
WSPRS Plan 2: RCW 43.43.271(2) WAC 415-103-225

(4) Why does the surviving beneficiary's age matter? The surviving beneficiary's age is used in determining the amount of the payments. The younger the surviving beneficiary, the longer he or she is expected to receive payments. The monthly benefit must be reduced accordingly.

(5) What are the survivor options? The survivor options are described in detail within each plan. For details, please see the list in subsection (3) of this section.

To summarize:

Option 2 - Joint and 100 percent survivorship

Option 3 - Joint and 50 percent survivorship

Option 4 - Joint and 66.67 percent survivorship

(6) Examples

(a) Example (a):

Kendra, a PERS Plan 2 member, chooses Option 3 (joint and 50 percent survivorship) at retirement. She names her nephew, Steve, as her surviving beneficiary. This means that Steve would receive half of Kendra's benefit amount after Kendra's death. Steve is 30 years younger than Kendra. PERS would use the survivor option factor table ("member older") to calculate the adjustment. With a 30-year age difference (member minus beneficiary), the value corresponding to PERS Plan 2 and Option 3 is 0.753. This value, 0.753, is multiplied against the amount Kendra would have received under Option 1. Kendra's retirement benefits will be reduced to about 75% of her Option 1 level.

(b) Example (b):

Mark, a LEOFF Plan 2 member, chooses Option 2 (joint and 100 percent survivorship) at retirement. He names his wife, Susan, as his surviving beneficiary. This means Susan would receive the same benefit amount Mark had received prior to his death. Mark is five years younger than Susan. LEOFF would use the survivor option factors table ("member younger") to calculate the adjustment for the age difference. With a 5-year age difference (member minus beneficiary), the value corresponding to LEOFF Plan 2 and Option 2 is 0.894. This value, 0.894, will be multiplied against the amount Mark would have received under Option 1. Mark's retirement benefits will be reduced to about 89 percent of his Option 1 level.

(7) Table - Member older (PERS and SERS)

Survivor option factor: Member older than beneficiary

Age difference: Member age minus beneficiary age

Age Difference PERS 1 Opt. 2 100% PERS 1 Opt. 3 50% PERS 1 Opt. 4

66 2/3%

PERS 2/3 Opt. 2 100% PERS 2/3 Opt. 3 50% PERS 2/3 Opt. 4

66 2/3%

SERS 2/3 Opt. 2 100% SERS 2/3 Opt. 3 50% SERS 2/3 Opt. 4

66 2/3%

0 .870 .930 .909 .791 .883 .850 .799 .888 .857
1 .862 .926 .904 .778 .875 .840 .773 .872 .836
2 .857 .923 .900 .767 .868 .832 .760 .864 .826
3 .844 .915 .890 .758 .863 .825 .748 .856 .816
4 .840 .913 .887 .751 .858 .819 .741 .851 .811
5 .836 .910 .884 .743 .853 .813 .734 .846 .805
6 .831 .908 .881 .736 .848 .807 .726 .841 .799
7 .818 .900 .871 .728 .843 .801 .719 .836 .793
8 .814 .897 .867 .721 .838 .795 .712 .832 .787
9 .809 .895 .864 .713 .833 .789 .705 .827 .782
10 .805 .892 .861 .706 .828 .783 .698 .822 .776
11 .802 .890 .858 .699 .823 .777 .692 .818 .771
12 .787 .881 .847 .693 .818 .772 .685 .813 .766
13 .784 .879 .845 .686 .814 .766 .679 .809 .760
14 .780 .876 .842 .680 .809 .761 .673 .805 .755
15 .777 .874 .839 .673 .805 .756 .667 .800 .750
16 .773 .872 .836 .667 .801 .751 .662 .796 .746
17 .770 .870 .834 .662 .796 .746 .656 .792 .741
18 .767 .868 .832 .656 .792 .741 .651 .789 .737
19 .764 .866 .829 .651 .788 .736 .646 .785 .732
20 .762 .865 .827 .645 .785 .732 .641 .781 .728
21 .759 .863 .825 .640 .781 .728 .637 .778 .724
22 .756 .861 .823 .636 .777 .724 .632 .775 .720
23 .754 .860 .821 .631 .774 .720 .628 .771 .717
24 .752 .858 .820 .627 .771 .716 .624 .768 .713
25 .750 .857 .818 .622 .767 .712 .620 .765 .710
26 .748 .856 .817 .618 .764 .709 .616 .762 .707
27 .746 .855 .815 .615 .761 .705 .613 .760 .703
28 .744 .853 .814 .611 .758 .702 .609 .757 .700
29 .743 .852 .812 .607 .756 .699 .606 .755 .697
30 .741 .851 .811 .604 .753 .696 .603 .752 .695
31 .740 .850 .810 .601 .751 .693 .600 .750 .692
32 .738 .849 .809 .598 .748 .690 .597 .748 .690
33 .737 .849 .808 .595 .746 .688 .594 .745 .687
34 .736 .848 .807 .592 .744 .685 .592 .743 .685
35 .735 .847 .806 .589 .742 .683 .589 .741 .683
36 .734 .846 .805 .587 .740 .680 .587 .740 .680
37 .733 .846 .804 .584 .738 .678 .585 .738 .678
38 .732 .845 .804 .582 .736 .676 .582 .736 .677
39 .731 .844 .803 .580 .734 .674 .580 .734 .675
40 .730 .844 .802 .578 .732 .672 .578 .733 .673

(8) Table - Member younger (PERS and SERS)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age

Age Difference PERS 1 Opt. 2 100% PERS 1 Opt. 3 50% PERS 1 Opt. 4

66 2/3%

PERS 2/3 Opt. 2 100% PERS 2/3 Opt. 3 50% PERS 2/3 Opt. 4

66 2/3%

SERS 2/3 Opt. 2 100% SERS 2/3 Opt. 3 50% SERS 2/3 Opt. 4

66 2/3%

-20 .958 .978 .971 .939 .969 .959 .949 .974 .965
-19 .955 .977 .970 .935 .967 .956 .946 .972 .963
-18 .952 .976 .968 .931 .964 .953 .942 .970 .961
-17 .949 .974 .966 .927 .962 .950 .938 .968 .958
-16 .947 .973 .964 .922 .959 .947 .934 .966 .955
-15 .944 .971 .962 .917 .957 .943 .930 .964 .952
-14 .940 .969 .959 .912 .954 .940 .926 .961 .949
-13 .937 .968 .957 .907 .951 .936 .921 .959 .946
-12 .934 .966 .955 .902 .948 .932 .917 .956 .943
-11 .930 .964 .953 .896 .945 .928 .912 .954 .939
-10 .927 .962 .950 .890 .942 .924 .907 .951 .936
-9 .923 .960 .948 .884 .938 .919 .901 .948 .932
-8 .920 .958 .945 .878 .935 .915 .896 .945 .928
-7 .916 .956 .942 .871 .931 .910 .890 .942 .924
-6 .912 .954 .940 .865 .927 .905 .885 .939 .920
-5 .908 .952 .937 .858 .924 .901 .879 .935 .916
-4 .901 .948 .931 .848 .918 .893 .873 .932 .911
-3 .896 .945 .928 .840 .913 .887 .863 .927 .905
-2 .889 .941 .923 .826 .905 .877 .853 .920 .897
-1 .879 .935 .916 .805 .892 .861 .834 .909 .883
0 .870 .930 .909 .791 .883 .850 .799 .888 .857

(9) Table - Member older (LEOFF Plan 2 and WSPRS Plan 2)

Survivor option factors: Member older than beneficiary

Age difference: Member age minus beneficiary age

Age Difference LEOFF 2 Option 2

100%

LEOFF 2 Option 3

50%

LEOFF 2 Option 4

66 2/3%

WSP 2

Option 2

100%

WSP 2

Option 3

50%

WSP 2

Option 4

66 2/3%

0 0.870 0.930 0.909 0.870 0.930 0.909
1 0.865 0.927 0.905 0.865 0.927 0.905
2 0.860 0.924 0.902 0.860 0.924 0.902
3 0.855 0.922 0.898 0.855 0.922 0.898
4 0.850 0.919 0.894 0.850 0.919 0.894
5 0.845 0.916 0.891 0.845 0.916 0.891
6 0.840 0.913 0.887 0.840 0.913 0.887
7 0.835 0.910 0.883 0.835 0.910 0.883
8 0.830 0.907 0.880 0.830 0.907 0.880
9 0.825 0.904 0.876 0.825 0.904 0.876
10 0.821 0.902 0.873 0.821 0.902 0.873
11 0.816 0.899 0.870 0.816 0.899 0.870
12 0.812 0.896 0.866 0.812 0.896 0.866
13 0.808 0.894 0.863 0.808 0.894 0.863
14 0.803 0.891 0.860 0.803 0.891 0.860
15 0.799 0.888 0.857 0.799 0.888 0.857
16 0.795 0.886 0.854 0.795 0.886 0.854
17 0.792 0.884 0.851 0.792 0.884 0.851
18 0.788 0.881 0.848 0.788 0.881 0.848
19 0.784 0.879 0.845 0.784 0.879 0.845
20 0.781 0.877 0.842 0.781 0.877 0.842
21 0.777 0.875 0.840 0.777 0.875 0.840
22 0.774 0.873 0.837 0.774 0.873 0.837
23 0.771 0.871 0.835 0.771 0.871 0.835
24 0.768 0.869 0.832 0.768 0.869 0.832
25 0.765 0.867 0.830 0.765 0.867 0.830
26 0.763 0.865 0.828 0.763 0.865 0.828
27 0.760 0.864 0.826 0.760 0.864 0.826
28 0.757 0.862 0.824 0.757 0.862 0.824
29 0.755 0.860 0.822 0.755 0.860 0.822
30 0.753 0.859 0.820 0.753 0.859 0.820
31 0.750 0.857 0.818 0.750 0.857 0.818
32 0.748 0.856 0.817 0.748 0.856 0.817
33 0.746 0.855 0.815 0.746 0.855 0.815
34 0.744 0.853 0.814 0.744 0.853 0.814
35 0.742 0.852 0.812 0.742 0.852 0.812
36 0.741 0.851 0.811 0.741 0.851 0.811
37 0.739 0.850 0.809 0.739 0.850 0.809
38 0.737 0.849 0.808 0.737 0.849 0.808
39 0.736 0.848 0.807 0.736 0.848 0.807
40 0.734 0.847 0.806 0.734 0.847 0.806

(10) Table - Member younger (LEOFF Plan 2 and WSPRS Plan 2)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age

Age Difference LEOFF 2 Option 2

100%

LEOFF 2 Option 3

50%

LEOFF 2 Option 4

66 2/3%

WSP 2

Option 2

100%

WSP 2

Option 3

50%

WSP 2

Option 4

66 2/3%

-20 0.953 0.976 0.968 0.953 0.976 0.968
-19 0.950 0.974 0.966 0.950 0.974 0.966
-18 0.947 0.973 0.964 0.947 0.973 0.964
-17 0.944 0.971 0.962 0.944 0.971 0.962
-16 0.940 0.969 0.959 0.940 0.969 0.959
-15 0.937 0.967 0.957 0.937 0.967 0.957
-14 0.933 0.965 0.954 0.933 0.965 0.954
-13 0.929 0.963 0.952 0.929 0.963 0.952
-12 0.925 0.961 0.949 0.925 0.961 0.949
-11 0.921 0.959 0.946 0.921 0.959 0.946
-10 0.917 0.957 0.943 0.917 0.957 0.943
-9 0.913 0.954 0.940 0.913 0.954 0.940
-8 0.908 0.952 0.937 0.908 0.952 0.937
-7 0.904 0.949 0.934 0.904 0.949 0.934
-6 0.899 0.947 0.930 0.899 0.947 0.930
-5 0.894 0.944 0.927 0.894 0.944 0.927
-4 0.890 0.942 0.924 0.890 0.942 0.924
-3 0.885 0.939 0.920 0.885 0.939 0.920
-2 0.880 0.936 0.916 0.880 0.936 0.916
-1 0.875 0.933 0.913 0.875 0.933 0.913
0 0.870 0.930 0.909 0.870 0.930 0.909

(11) Table - Member ((older)) younger (TRS)

Survivor option factors: Member younger than beneficiary

Age difference: Member age minus beneficiary age

Age Difference TRS 1

Option 2

100%

TRS 1

Option 3

50%

TRS 1 Option 4

66 2/3%

TRS 2/3

Option 2

100%

TRS 2/3

Option 3

50%

TRS 2/3

Option 4

66 2/3%

-20 0.968 0.984 0.979 0.952 0.975 0.967
-19 0.966 0.983 0.977 0.949 0.974 0.965
-18 0.964 0.982 0.976 0.945 0.972 0.963
-17 0.962 0.981 0.974 0.942 0.970 0.960
-16 0.960 0.979 0.973 0.938 0.968 0.958
-15 0.957 0.978 0.971 0.934 0.966 0.955
-14 0.955 0.977 0.969 0.929 0.963 0.952
-13 0.952 0.976 0.968 0.925 0.961 0.949
-12 0.950 0.974 0.966 0.921 0.959 0.946
-11 0.947 0.973 0.964 0.916 0.956 0.942
-10 0.944 0.971 0.962 0.911 0.953 0.939
-9 0.942 0.970 0.960 0.906 0.951 0.935
-8 0.939 0.968 0.958 0.900 0.948 0.931
-7 0.936 0.967 0.956 0.895 0.945 0.927
-6 0.933 0.965 0.954 0.889 0.941 0.923
-5 0.927 0.962 0.950 0.884 0.938 0.919
-4 0.923 0.960 0.947 0.877 0.934 0.914
-3 0.918 0.957 0.944 0.865 0.928 0.906
-2 0.913 0.955 0.941 0.855 0.922 0.899
-1 0.907 0.951 0.936 0.839 0.912 0.887
0 0.898 0.946 0.930 0.815 0.898 0.869

(12) Table - Member ((younger)) older (TRS)

Survivor option factors: Member older than beneficiary

Age difference: Member age minus beneficiary age

Age Difference TRS 1

Option 2

100%

TRS 1

Option 3

50%

TRS 1 Option 4

66 2/3%

TRS 2/3

Option 2

100%

TRS 2/3

Option 3

50%

TRS 2/3

Option 4

66 2/3%

0 0.898 0.946 0.930 0.815 0.898 0.869
1 0.892 0.943 0.925 0.801 0.889 0.858
2 0.888 0.941 0.922 0.790 0.883 0.849
3 0.877 0.935 0.915 0.781 0.877 0.842
4 0.873 0.932 0.912 0.772 0.871 0.835
5 0.869 0.930 0.909 0.765 0.867 0.830
6 0.858 0.924 0.901 0.758 0.862 0.824
7 0.855 0.922 0.898 0.751 0.858 0.819
8 0.851 0.920 0.896 0.744 0.853 0.813
9 0.848 0.918 0.893 0.737 0.849 0.808
10 0.845 0.916 0.891 0.730 0.844 0.802
11 0.842 0.914 0.889 0.724 0.840 0.797
12 0.839 0.912 0.887 0.717 0.835 0.792
13 0.836 0.911 0.884 0.711 0.831 0.787
14 0.824 0.904 0.875 0.705 0.827 0.782
15 0.821 0.902 0.873 0.699 0.823 0.777
16 0.819 0.900 0.871 0.694 0.819 0.773
17 0.816 0.899 0.869 0.688 0.815 0.768
18 0.814 0.897 0.868 0.683 0.812 0.764
19 0.812 0.896 0.866 0.678 0.808 0.760
20 0.809 0.895 0.864 0.673 0.805 0.755
21 0.807 0.893 0.863 0.668 0.801 0.751
22 0.805 0.892 0.861 0.664 0.798 0.748
23 0.803 0.891 0.860 0.660 0.795 0.744
24 0.802 0.890 0.858 0.655 0.792 0.740
25 0.800 0.889 0.857 0.651 0.789 0.737
26 0.798 0.888 0.856 0.648 0.786 0.734
27 0.797 0.887 0.855 0.644 0.783 0.731
28 0.796 0.886 0.854 0.640 0.781 0.728
29 0.794 0.885 0.853 0.637 0.778 0.725
30 0.793 0.885 0.852 0.634 0.776 0.722
31 0.792 0.884 0.851 0.631 0.774 0.719
32 0.791 0.883 0.850 0.628 0.771 0.717
33 0.790 0.882 0.849 0.625 0.769 0.714
34 0.789 0.882 0.848 0.622 0.767 0.712
35 0.788 0.881 0.848 0.620 0.765 0.710
36 0.787 0.881 0.847 0.617 0.763 0.708
37 0.786 0.880 0.846 0.615 0.762 0.706
38 0.785 0.880 0.846 0.613 0.760 0.704
39 0.785 0.879 0.845 0.611 0.758 0.702
40 0.784 0.879 0.845 0.609 0.757 0.700

[Statutory Authority: RCW 41.50.050(5) and chapter 41.45 RCW. 02-18-048, 415-02-380, filed 8/28/02, effective 9/1/02.]

Washington State Code Reviser's Office